🔮 Will genAI cause a compute crunch? No.

A new paper by Exponential View and BCG Henderson Institute

Last year, Google reached a milestone where its spending on compute exceeded its spending on people. This is a watershed moment.

For millennia, until the 1600s, human and animal sweat was the dominant form of work. It was human muscle power that was, in Vaclav Smil’s terms, the “prime mover” in our economies. Today machines have largely taken over this role.

Of course, Google’s cross-over point doesn’t mean human mental efforts have been supplanted by machines. But it does signify the shape the future could take: increasingly high spends on software that relies on computing power. The sweat is now on the computers’ brow.

This is a fundamental shift. And some companies understand it far better than others. If you ask Sam Altman or Satya Nadella or Sundar Pichai what they would do with a thousand or a million more times compute, they will know the answer. That scale is a strategic resource for them. But to what extent is that true for the bosses of the large firms that comprise the bulk …