5/19/25-Data Center Growth, Thinking Game🤖, Platform 🚄vs Aggregator
“Another search engine or another site is only a click away.🖱️”
Welcome back. In a busy world we can be distracted with the trivial many things or we can focus on The Vital Few.
Something that I am thinking about
Anecdotal Evidence FOR Hyperscaler Data Center Growth
While listening to a recent All-In podcast the topic of AI token usage growth over time was discussed. The trend was talked about in such a clear way that it stuck with me weeks later. I wanted to share it with you below.
CP- it's like I get a bill from AWS and it's like oh wait hold on a second I just you know pay $100,000 this month.. What's going on? ..
DS- That by the way is another major trend line which is that the new applications that we talked about are all much more token intensive.
→ So we went from basic LLMs totally you know which don't require that many tokens to give you an answer
→ → To the reasoning model where you can spend a thousand times more tokens just getting one answer to a question
→ → → And now the agents are going to be even more token intensive than that.
So the amount of compute required to serve all these new applications is going to be massive. Which is why I think the capex buildout actually makes sense.🏭🏭
JC- When you do a deep research to your point David you're firing off maybe 200 queries and the AI is saying “hey what query should I ask on behalf of the user?” and then you go down that rabbit hole. It's basically like doing 200 of them at once.
While I don’t think there is any new information here, I did like how these 4 experts were talking about it at the micro level, including a bill for $100K per month. What was not discussed but is implied is that the value that is being derived or generated exceeds the cost. So, despite the AI token usage growth, in this conversation BENEFITS are greater than cost.
You can watch the whole exchange here at the 1.29 hr mark.
[In my 12/2024 post I highlighted some additional comments from Chamath Palihapitiya on LLM themes, link here.]
Investing, Companies, Market Past/Future
(I invest in Companies, not in stocks.)
Interesting companies that hosted earnings results or information sessions since my last edition that I reviewed-
Technology- NET 0.00%↑ , CSCO 0.00%↑ , AMAT 0.00%↑ , AMD 0.00%↑
Others- UBER 0.00%↑ , WMT 0.00%↑ , DIS 0.00%↑ , MTCH 0.00%↑ , BRK
(With data and charts it is not what you look at, it is what you see that matters.) Click on any of the images below to see a larger view.
Podcast
“On The Tape” with Danny Moses, Porter Collins and Vincent Daniel
Danny Moses welcomes back former partners Porter Collins and Vincent Daniel from Seawolf Capital. [These are 3 of the 4 person team highlighted in the movie The Big Short.] 45 Min, you can also find the show on your favorite podcast platform.
They discuss perspectives on the current volatile market environment, managing personal investments versus others' money, stock picking strategies, and the importance of upgrading portfolios during market downturns. The trio also delves into the impacts of tariffs, the importance of liquidity, and the role of gold and Bitcoin as safe-haven assets. They share their investment strategies in sectors like energy, financial services, and discuss specific stocks such as Sable Offshore SOC 0.00%↑ and Uranium.
Video
Movie Recommendation- The Thinking Game (Demis Hassabis CEO of DeepMind) GOOG 0.00%↑
Now FREE on Amazon Prime Video.
The Thinking Game🤔 takes you on a journey into the heart of DeepMind, one of the world's leading AI labs, as it strives to unravel the mysteries of artificial general intelligence (AGI). Inside the London headquarters, founder Demis Hassabis and his team are relentlessly pursuing the creation of AI that matches or surpasses human abilities on a wide range of tasks. Filmed over five years, this film puts viewers in the room for the pivotal moments of this quest, including the groundbreaking achievement of AlphaFold.
Books and Articles since my last edition
(Reading Great books is like a conversation with the finest minds of the past.- Descartes. If I get bored of a book I quit and move on.)
Play Nice: The Rise, Fall, and Future of Blizzard Entertainment by Jason Schreier Nonfiction, Business
Zeroes by Chuck Wendig Science Fiction, Computer Hacking. 👍🏾
Here is a link to many of the books I have read and my 1-5 star rating- Goodreads Books Read
Wild Card🃏
Platform vs Aggregator
I have heard these words used to describe businesses so frequently in the last 5 years that I no longer differentiated between them. If I had a dollar for each time a management team talks about their platform. 😝 BUT, the words describe 2 totally different concepts and philosophies.
When I was listening to a recent episode of Ben Thompson on Sharp Tech his description of the difference woke me up😴😯 . Platforms and Aggregators are quite different.
TLDR- Platforms think operating systems + app stores from Apple and Microsoft. Aggregators think Google. AAPL 0.00%↑ , MSFT 0.00%↑ , GOOG 0.00%↑
(The below has been lightly edited by me for clarity.)
Ben Thompson- Everyone is all about “you need developers to build platforms.” No, you need a good product that collects billions of users and then you get a platform by default.
Andrew Sharp- Can you define what distinguishes a Platform from an Aggregator?
BT- A platform, in the specific case I am using it here, its like an operating system. It is something that has APIs where 3rd party developers can build on top of it. So if you are a Photoshop, you depend on MacOS existing, on Windows existing, on iPadOS existing. It is a foundation upon which things can be built.
Platforms are one of the largest value generating things ever. All of the value in technology, by and large, is built on top of platforms…
Aggregators on the other hand, there is no lock-in. You don’t have to use Google. Google always says “Another search engine or another site is only a click away.” That is totally true.
That is the fundamental difference of why Aggregators are different than Platforms. Aggregators depend on users choosing to go there, but that is a choice users make that is not forced on them. Platforms are much more like railroads. 🚂🛤️ Someone built it and it is there. It is infrastructure. And that is why I have always been so critical of the anti-monopolist focusing on Aggregators, I’m like “Solve the Platform problem.” They (Platforms) are making choices that are restricting innovation, restricting competition and is addressable and can be fixed. With Aggregators you are trying to change the preferences of billions of people, which is impossible.
The entire episode can be found here, and the discussion above occurs in the first 15 minutes.
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Disclaimer: All of my posts are for informational purposes only. I might own some of the companies discussed in these posts. This is NOT a recommendation to buy or sell securities discussed. Please do your own work before investing your money.