By Alan Jacobson, Systems Architect & Analyst Let’s start at the very beginning. A very good place to start: There are only a handful of companies that actually provide AI at scale — the firms that own or control the data centers, power, chips and routing that make large models
By Alan Jacobson, Systems Architect & Analyst Generative AI materially alters our cost structure in ways that are not yet reflected in reported unit economics. Unlike traditional search, which benefits from near-zero marginal cost per query, large-scale AI inference incurs materially higher variable compute costs that scale with
By Alan Jacobson, Systems Architect & Analyst On Tuesday, The Information reported that individual investors now have a way to invest directly in privately held, pure-play large language model companies such as OpenAI and Anthropic. Until now, public market exposure to LLMs came only through diversified companies with profitable
By Alan Jacobson, Systems Architect & Analyst Google is feeding the future. Apple is harvesting the past. Warren Buffett is no dummy. In 1984, Apple sold a simple idea: the computer as a “bicycle for the mind.” Steve Jobs meant something very specific by that. Humans are not especially efficient
By Alan Jacobson, Systems Architect & Analyst When you don’t have the numbers, you change the subject. If a platform has real adoption, it never shuts up about it. It leads with numbers, not narratives. Even The New Yorker is asking why AI failed to show up in everyday
By Alan Jacobson, Systems Architect & Analyst NASDAQ up, Chipmakers up, LLM-tied names mixed or down. The explainer: This is not a selloff. It’s a separation. Why chipmakers are up * They sell capacity, not outcomes * Revenue tied to approved capex * Near-term visibility * Paid before value is proven
By Alan Jacobson, Systems Architect & Analyst There are two ways to make money online: subscriptions and advertising. ChatGPT is failing at both: * According to Menlo Ventures, 95% of ChatGPT’s users pay nothing. * According to TheInformation, 90% of ChatGPT’s users are outside the US and Canada, according to
By Alan Jacobson, Systems Architect & Analyst The Mag 7 tech stocks—Nvidia, Apple, Microsoft, Google, Amazon, Broadcom and Meta—account for 36% of the S&P’s market capitalization and a larger share of its profit growth. By sheer scale, almost all investors are already exposed to their
By Alan Jacobson, Systems Architect & Analyst The tape is clear LLMs extended a five-day selloff, even as the NASDAQ was propped up by chipmakers. But flat adoption rates and pre-execute provisioning efficiencies point to falling demand for AI infrastructure. The past is clear From the 1873 railroad
By Alan Jacobson, Systems Architect & Analyst A recent note from Jim Cramer framed the AI debate in familiar terms: power, electricity, and physical limits. One line stands out because it quietly carries the entire thesis: “If someone were to come up with a less energy-intensive way to produce
By Alan Jacobson, Systems Architect & Analyst Jim Cramer doesn’t usually signal retreats. He signals rotations. So when he says “the year of magical investing is over,” he’s not forecasting a crash. He’s granting permission. * Permission to stop pretending. * Permission to stop chasing. * Permission to look at
By Alan Jacobson, Systems Architect & Analyst LLMs are not SaaS like… * Oracle databases * Microsoft’s Word+Excel+Powerpoint * Adobe’s Photoshop+InDesign+Illustrator+Acrobat Those products follow software economics. LLMs do not. For two decades, investors have believed in one rule: * Build once * Sell forever * Marginal costs fall toward