While the media spent most of the year talking about how bullish they are about AI from a consumer standpoint, the reality is that we’re not there yet!

The AI-related products currently out are not showing the kind of growth most analysts were hoping for.

Just because it hasn’t happened with consumers though, doesn’t mean that there’s no demand…

According to Jensen Huang, cloud service providers (CSPs) are in the process of restructuring their entire technology stack from CPU to GPU-based.

Why would they bother?

As the amount of data and processing power required by CSPs keeps increasing, the cost also follows suit…

The best way to lower these costs is to change the entire infrastructure of these big data centers to be AI-driven via mostly GPUs.

We’re not just talking about a little bit of savings here…

This makes the switch pretty much a no-brainer for any large cloud service provider!

The thing is, this is a massive industry…

According to Jensen, there are about a trillion dollars worth of data centers, with roughly $250 million worth of capital being spent each year!

Which company is benefiting from this?

Nvidia…

While enterprise customers are not spending much on AI yet, this is likely to change in the coming years…

As more and more businesses show proof of AI benefiting both operations and services, other companies will likely ramp up their spending.

Some of these results are already starting to show.

Meta reported solid earnings recently, with Zuckerberg citing AI advancements as an integral part of their increased growth!

While I believe growth for this side of AI will continue to be slow for the rest of 2023 and most of 2024, I expect this to start changing come 2025 and beyond…

That’s all for now.

Until Next Time,

Damian