This is literally true for any revenue. Treat the buyer and seller as a single company and their transaction is internal.
This is literally true for any revenue. Treat the buyer and seller as a single company and their transaction is internal.
There is a lot of revenue dumping into this sector. If there weren’t, you’d have a point about manufactured numbers. But I don’t think anyone seriously doubts Anthropic and Google are hauling in serious dough.
The question, as you point out, is how much they are keeping. But xAI selling compute doesn’t really hide any of that. If anything, given the prices Musk is getting, it adds to the cost line. (And xAI isn’t masking compute revenue as Grok’s.)
In 10 years, we probably will have $700B/yr in productivity gains and revenue from LLMs, but we're not going to be able to sustain $700B/yr in capital spending until we get there. And the problem is much worse than the fiber buildout of the late 90s. Fiber built out in 1998 was still usable 10 years later. The GPUs that are being built out today are going to be obsolete trash in 3 years.