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Good Morning,
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With the EU and the Middle East following in the footsteps of BigTech Capex (the above image does not include Stargate’s massive investment) in AI Infrastructure in the U.S, the great data center boom of the 2020s is an unprecedented moment in infrastructure rollouts.
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It’s as if the world is preparing for the coming age of AI. The capabilities of our models of today do not represent what AI can become tomorrow, as the decades ahead will show.
of the Newsletter Generative Value is becoming one of my favorite reads related to guides to the AI space.
Last time with him we went over the AI Semiconductor Landscape. Today we will be looking into AI Data Centers. The Current State of AI Markets is getting pretty crazy.
In 2025 we’ll see in the area of $400 Billion in capex from BigTech mostly related to AI Infrastructure and datacenters alone, it’s hard to grasp such big numbers. If you add OpenAI, xAI plus the Big Four (header image), the number certainly approaches $400 billion in actuality.
Luckily for us, Eric’s writing walks us through the enormity of the infrastructure understanding seamlessly:
Start Here
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A Primer on Data Centers
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Data Industry Primer
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An Overview of the Semiconductor Industry
In just a few minutes you can grasp major concepts underlying how AI works.
There are few other publications where I feel as much synergy with my own Newsletter as Generative Value. 🌌 The rabbit hole we are about to enter is a tunnel into AI’s value creation itself.
⚗️ Generative Value 🌍
Let’s get to today’s deep dive:
By , early 2025.
“As one financier observed at the time, the amount of money required by the burgeoning US electrical system was “bewildering” and “sounded more like astronomical mathematics than totals of round, hard-earned dollars.”” – [A description of the electric grid buildout around 1900] Power Loss, Richard Hirsh 1999, via Construction Physics
We’re currently in the midst of one of the largest computing infrastructure build outs in history.
100+ years ago, we saw a similar buildout of the electric grid (which ironically is a bottleneck for today’s buildout). Throughout the birth of the electric grid, we saw the scaling of power plants (building power plants as large as possible to capture performance improvements), “Astronomical” CapEx investments, and the plummeting cost of electricity.
Today, we’re seeing the scaling of data centers, “Astronomical” CapEx from the hyperscalers, and the plummeting cost of AI compute:
This will be an introductory piece breaking down the AI data center: what exactly it means, who supplies the components into the data center, and where opportunities may lie.
This piece will be specifically focused on the infrastructure required to build AI-specific data centers; for an introductory piece on data centers, I recommend reading this piece I published a few months back.
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For less than $2 a week, consider getting all-access to this Newsletter.
1. An Overview of the AI Data Center
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