# The AI Race

By [hangytong](https://paragraph.com/@hangytonggmail.com) · 2024-06-14

---

I think it has become very clear that with the race of accelerating AI, the downstream of enabling AI is getting more and more important - GPUs, Datacenter, etc. Why? Because AI cannot magically appear without strong hardware. You can write the most amazing code but without a good piece of hardware, your code wont be able to function at its best.

As big companies race towards AI, their investment needs for compute also increases. Below shows the investment amount needed to train the AI clusters over the next few years  

![](https://storage.googleapis.com/papyrus_images/3cc062c73d98c6d4175096327a3482fc.png)

To train big clusters you would need a lot of GPUs and not only that, GPUs are running on electricity. what we are talking about here is the lifeblood of any datacenters.

![](https://storage.googleapis.com/papyrus_images/e267410cfcb7b7868b9d7d74bf271601.png)

This chart shows the moment AI reached escape velocity, so does the Datacenter's revenue because of the need for compute.

Question is, why are all the big tech comapnies spending so much on AI? Because AI drives revenue, enough of revenue so much so that they will invest as much as they can so that the winner takes all. AI is indeed a winner takes all market - the best response, the best interface, the best experience. And as long as revenue > investment cost, the amount of capital plowing in will just keep increasing.

It is important to note that the factors needed to enable AGI is can mostly be summed up to these few things - Power and Chips. These 2 make up the datacenter itself. To build a datacenter one must have enough power to apply to the entire datacenter and also have enough chips to build the hardware. As datacenters are the lifeblood of AI, countries need to build the infra for it. Imagine if a country is heavily reliant on another country for computing power and one day things go south, the country will 100% lose the AI race and all it has built. Which is also why countries are piling in $ to build inhouse chips and datacenters.  
  
AI now is not just a buzz word, it is a word that could threaten the entire company or even the entire sovereignty of a country.

---

*Originally published on [hangytong](https://paragraph.com/@hangytonggmail.com/the-ai-race)*