The Capex Desk

The AI economy, in numbers. I take one company, product or model each week and work out what it actually costs to run. Charts are my own.

[The Capex Desk @TheCapexDesk]

Nobody can tell you what a ChatGPT answer costs.

Not the price. The cost.

Trillions of dollars are being committed on the assumption
that this number falls fast enough, and almost nobody has
done the arithmetic in public.

So I'm going to. Every week. Until someone shows me I'm wrong.

Teardowns Tuesday and Friday.
My own charts. My work shown every time.

[The Capex Desk @TheCapexDesk]

Why I'm going to start making dated predictions.

Analysis without a prediction is unfalsifiable, and unfalsifiable analysis is entertainment.

If I think capacity will outrun demand, I should say by when. If I think inference costs will keep falling, I should say how fast and check in a year.

The point isn't to be right. The point is that being wrong in public, on a schedule, is the only mechanism that improves judgement.

Everyone in this sector has opinions. Almost nobody has a scoreboard.

[The Capex Desk @TheCapexDesk]

Finish the sentence:

Clouds will stop being the default for AI when...

[The Capex Desk @TheCapexDesk]

A rule of thumb worth having:

In most AI products, a small minority of requests consume the majority of the compute.

Long documents. Complex agent runs. The user who pasted their entire database in.

If you haven't looked at the distribution of cost per request, you don't know your economics. You know your average, and the average is hiding the shape.

Find your top 1% of requests by cost. That's where your margin went.

[The Capex Desk @TheCapexDesk]

What payback period would you accept for an AI project?

1) under a year
2) one to two years
3) three to five years
4) strategic, payback doesn't matter

[The Capex Desk @TheCapexDesk]

Agree or disagree: "AI-first" is the new "mobile-first", and it will sound just as dated.

[The Capex Desk @TheCapexDesk]

More valuable for a small business?

1) AI that saves time
2) AI that brings customers

[The Capex Desk @TheCapexDesk]

Agree or disagree: the browser is about to become the most valuable piece of software in AI.

[The Capex Desk @TheCapexDesk]

@kimmonismus Wtf is happening? Where's logics?

[The Capex Desk @TheCapexDesk]

Monday question: what's one AI tool your team adopted this month?

[The Capex Desk @TheCapexDesk]

True or false: most companies don't apply the same discipline to AI spending as to any other investment.

[The Capex Desk @TheCapexDesk]

Quick one: which AI startup category looks most overfunded to you?

[The Capex Desk @TheCapexDesk]

https://t.co/FhoAFPWqfY

[The Capex Desk @TheCapexDesk]

Hot take: AI will make a one-person business look like a company of ten. Fair?

[The Capex Desk @TheCapexDesk]

What's the most realistic AI business case you've seen, and what made it believable?

[The Capex Desk @TheCapexDesk]

True or false: AI will widen pay gaps inside the same job.

[The Capex Desk @TheCapexDesk]

Better compute strategy for a startup?

1) reserved capacity, committed
2) spot capacity, flexible

[The Capex Desk @TheCapexDesk]

What's the single change that would speed up AI adoption most at your company?

[The Capex Desk @TheCapexDesk]

Agree or disagree: the best AI startups now look more like services firms than software firms.

[The Capex Desk @TheCapexDesk]

Quick one: has AI replaced a paid app or service in your life yet?

[The Capex Desk @TheCapexDesk]

Hot take: small AI startups pay the highest price for compute scarcity, because they can't commit big. Fair?