š® AI's expensive gap; superintelligent bureaucracy; Copernican trauma; supershoes & BYD's sexy mishap ++ #481
An insiderās guide to AI and exponential technologies
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The $500 billion question. The AI gold rush has created a $500 billion annual revenue gap between infrastructure investment and earnings, according to Sequoia Capital. The shortage of GPUs has turned into a glut, and there is a substantial shortfall in future earnings to return that capex. Paradoxically, AI companies are underperforming earnings growth expectations on average, yet AI stock valuations continue to rise (as research analyst
argues). Since 2023, companies with significant AI exposure that are on the S&P 500 have underperformed growth expectations by 26 percentage points, while non-AI peers have missed by 32 percentage points. AI stocks have seen their growth expectations and valuations rise more than their non-AI counterparts. Economic sentiment is currently tied to AI. As Klement notes, āUS tech dominance is narrowing to fewer and fewer stocks, namely those involved in building generative AI and the infrastructure needed to run it.ā LLMs are proving to ā¦