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After a busy day at the Goldman Sachs tech conference earlier this week, I sat down with the firm’s internet analyst Eric Sheridan to take stock. His main takeaway: “No one’s slowing down.”
Despite spending massively on AI infrastructure, almost every tech exec told him AI demand is outstripping their ability to supply intelligence, he said.
This was summed up by executives at CoreWeave, which builds and runs AI data centers. “Unrelenting,” they said, while noting there’s been yet another upward inflection in AI demand in the past four to six weeks.
During the dot-com boom of the late ’90s, internet infrastructure was built out massively based on eyeballs — just the fact that people were looking at websites. This time, there’s actual revenue from consumers and companies paying for AI services, Sheridan noted.
The conference headliner was OpenAI CFO Sarah Friar. The room was packed for her talk. Even the overflow room was full, with many analysts and investors sitting on the floor. I’ve never seen so many loafers and crossed legs at the same time.
Mike Segar/REUTERS
OpenAI is on course to generate $13 billion in revenue this year, but the company is “still massively compute constrained,” she said. That leads to tough decisions such as holding back new products, running some services intentionally slower, and having to choose which research projects get resources and which ones must wait.
This situation is also creating “strange bedfellows,” Sheridan told me. At the Goldman conference, Meta CFO Susan Li said the tech giant is working with Google, an arch rival. Friar mentioned OpenAI is also tapping Google’s cloud for capacity. Those two are going to the mat over the AI search market.
One dark cloud
The only dark cloud at the Goldman conference: Software could be disrupted by AI and that’s weighing on shares of SaaS providers. Friar was asked about this and she didn’t hold back.
In the new world of autonomous software development, it’s now easier to create bespoke software in-house. “Why wouldn’t I code the kind of software that is exactly what OpenAI needs,” the CFO said. “That is going to change the whole face of how software is developed.”
I felt a shudder ripple across the room as attendees considered how much of the world AI might consume in the coming years.
“Short everything,” someone muttered beside me as the audience got up to leave. Analysts laughed nervously as we filed out in a long, slow line.
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