Chamath Palihapitiya

Social Capital
8090

God is in the details.

[Chamath Palihapitiya @chamath]

Here is my AI investing guide.

Sitting here August 2026, my current best thoughts are as follows:

1. LPS (Land Power Shell) is still the most obvious and fastest path to cash on cash returns. Lots of value can be assembled and traded quickly at this layer. And as data centers get more pushback, energized land can explode in value. Very bullish here.

I’ve stepped into this layer very aggressively. My partner @anitavlallian and I have acquired almost 6GW coming online in a ramp from today thru 2029 of grid power and behind the meter.

2. Silicon - I helped get @GroqInc off the ground in 2015 and we licensed it to @nvidia for $20B Dec2025. I won’t invest or incubate anything in this layer now. The perf demands of the chips are too high, manufacturing precision is too complex and supply chain influence to get adjacent components like memory isn’t possible for a startup anymore. Lots of capital will be wasted here chasing Groq and Cerebras’ success. Note that both startups made sense a decade ago when these constraints were much more modest.

3. Clouds - Clouds are very very lucrative but very hard to build and very expensive and technically complicated to maintain. And as alignment becomes a more important issue, I expect the clouds will be asked to build robust KYC and attest to it. This makes the risk:reward ratio skewed. I don’t want to be responsible when the USG says a cloud allowed a bad actor to do something bad because of poor KYC.

4. Models are complicated. The big open question is how much of the revenue being generated by them today is because of tokenmaxxing and poor model behavior. If it’s a lot, then the annualized revenues will diminish meaningfully even as token consumption inflects upwards. This is the big economic question at this layer.

5. Harnesses are where the action is and why I started @8090solutions two years ago. In a nutshell, the harness helps enterprises owns their proprietary context (what Alex Karp calls their ‘alpha’). This is an enterprise’s data, workflows, evals, and business rules. A harness that gives this to an enterprise is what creates very low model-agnostic switching costs, which further reinforces my views of #4 above.

6. Applications will be another long term winner along with harnesses. This is where the differentiation between “off the shelf” and “custom time and materials” melts away. Every company, with the right harness, can now imbue their alpha into the software that runs their company. I expect this to mean that “off the shelf” is largely replaced with custom software creating a huge opportunity to write these solutions for companies. Build once and sell repeatedly is a laggard GTM motion for a SaaS world that isn’t needed here. Think custom by design, alpha embedded, proprietary by nature.

Fin.

Good luck to all the players!

[Chamath Palihapitiya @chamath]

Pod!!!

[The All-In Podcast @theallinpod]

🚨 POD UP! The Core Four are back!

-- Dario Amodei Breaks His Silence: Regulatory Capture or Real Concern?

-- The Anti-Data Center Revolt: Abbott, Shapiro, and the GOP Panic Memo

-- A "DMV for AI"? Sacks Says the Open Source Ban Is Coming

-- Friedberg's RSI Thesis: Why Regulating AI May Be a Fool's Errand

-- a16z Under DOJ Investigation Over a 1914 Law

-- Midterms Toss-Up: 53% of Young Conservatives Want Government Grocery Stores

(00:00) Besties are back!

(00:13) Dario's two-part essay: regulatory capture, doomerism, and the data center backlash

(10:25) FINRA for AI vs. MPAA for AI: SROs, thinking tokens, and the "DMV for AI"

(30:12) Is an open source ban coming? Harnesses, FDI, jobs, and recursive self-improvement

(56:33) a16z under DOJ investigation over "interlocking directorates"

(1:01:15) Midterms: broken polls, the socialism surge, and CATO's DSA price tag

Come hang with the Besties at the All-In Summit | September 13-15:
https://t.co/ctguerI0TE #AllInSummit

[Chamath Palihapitiya @chamath]

Wow

[Build American AI @BuildAmericanAI]

Quincy, Washington shows what a good data center deal looks like.

About 30 facilities shoulder an estimated 57% of local property taxes, funding a $120M high school, library, hospital, and police and fire stations.
https://t.co/I4kB0ieXbX

[Chamath Palihapitiya @chamath]

Bissell is a 150 year old American family owned business based in Grand Rapids, Michigan.

It’s a multi billion dollar manufacturing business who has revenue streams around the world and has to compete against tough competition from China everywhere so productivity, speed, and eliminating waste are critical to their competitiveness.

8090 worked with Bissell to identify a roadmap of potential projects to improve productivity and revenues or reduce costs.

Our first program with them has added a lot of learning to our playbook in manufacturing while delivering measurable time and cost savings for them.

Hear more from Bissell’s CFO, @matthew_kruer here:

[Chamath Palihapitiya @chamath]

@AutismCapital @Polymarket In this case because it could be misinterpreted as a 2-3% reduction of run rate GDP

[Theo Jaffee @theojaffee]

The anti-datacenter psychosis sweeping through both sides of our national politics might be the worst mass movement I've seen in my lifetime. The magnitude of lies underpinning it, the threat it poses to our economy and civilization, and the sheer scale of its popularity are totally unprecedented. It should be an enduring national shame that the country that invented the airplane, landed on the Moon, and created the Internet is descending into superstitious panic at the very moment growth matters most

[Chamath Palihapitiya @chamath]

Yay

[8090 @8090_Factory]

1,000+ MCP connections live in Software Factory.

[Chamath Palihapitiya @chamath]

@edleonklinger Superb.

[Chamath Palihapitiya @chamath]

@JTLonsdale Not saying there aren’t exceptions but I’m talking about the existing, largest companies. Those that comprise the Global 2000. They are the source of most of these tokens and revenues to the labs. Their earnings growth has literally zero to do with AI or anything remotely close…

[Chamath Palihapitiya @chamath]

Yet, high value tasks don’t seem to be increasing…so where are all these tokens going??

[Lisan al Gaib @scaling01]

New Moore's Law

token volume is doubling every ~11 weeks

[Chamath Palihapitiya @chamath]

Texas, Pennsylvania and now Ohio.

This is a powder keg and has the potential to unwind 200-300 basis points of annual GDP if it metastasizes.

How did it get this bad?

The collective leadership of frontier AI has failed miserably in doing the basics:

1. Paint a positive picture of what is possible with AI. Instead of spilling the ink on the glass half full, stories abound of pearl clutching, catastrophizing or arcane technical jargon that, together, breed mistrust, fear and skepticism.

2. Visibly and disproportionately enrich the local communities AI data centers operate in. Tell these stories with a megaphone and have local leaders lead with the financial proof so it’s irrefutable.

3. Stop infighting and stop trying to influence the government or trick them because of the asymmetric knowledge the industry has relative to outsiders and observers. This further makes it seem like a shady money grab to many bystanders.

Data centers have unfortunately become THE symbolic representation of the asymmetric upside for a very narrow tech elite and a class that are untrustworthy.

Inasmuch, the safer bet may be that the pushback and resistance grows…

[Andrew Curran @AndrewCurran_]

The National Republican Senatorial Committee sent a private memo yesterday to US AI companies warning them that the GOP is on the verge of losing Ohio over data centers, and unless something is done to improve public perception, political support will collapse nationwide.

[Chamath Palihapitiya @chamath]

Old news: The media lies.

New news: Polls now lie too.

[Noah Goldberg @Noah__Goldberg]

NEW: I reached out repeatedly last week to Median Strategies, asking to speak with their head of polling.

After reaching out repeatedly, they told me they were discontinuing their polling operation, then they admitted their poll was fake.

https://t.co/yE8GNuzG6Q

[Chamath Palihapitiya @chamath]

Step 1. Everyone experiments.

Step 2. The leaders start commoditizing features and make them much better for themselves.

Step 3. Turn the crank on costs and make each capability high margin.

As goes Databricks, others will follow. As a result, token consumption will explode but cost per token will crater because these companies won’t tolerate rent seeking behavior from models on performing generalized tasks that can be done by many providers.

[Ali Ghodsi @alighodsi]

An extremely important functionality for agents is to simply extract fields out of PDFs. This turns out to be harder than people think because LLMs are primarily trained on predicting the next tokens. This leads them to "autocorrect" things that they shouldn't autocorrect. We launched an AI Extract capability that just excels at doing just this task with very high accuracy (95% vs 87% for others) and extremely low cost. Check out this blog on how we did it. The function can of course be called directly from SQL and be used throughout the platform.

https://t.co/60XC2mIZ2E

[Chamath Palihapitiya @chamath]

@WhereHodler

[Chamath Palihapitiya @chamath]

If an alien visited earth and asked you: “Show me one chart that sits upstream of everything your species has accomplished or will ever accomplish.”

What would you show them?

I would show them the chart below.

From my perspective, as long as we keep this chart going, we will figure it all out…

[Chamath Palihapitiya @chamath]

@gsm739 This was going to be my second one…

[Chamath Palihapitiya @chamath]

@RachaelRad This is now how electricity prices work.

By building very expensive nuclear reactors and taking other users of electricity off the grid, their prices will go up even more.

[Chamath Palihapitiya @chamath]

Lol

But what will the nuclear plants power then?!

[Christopher F. Rufo ⚔️ @christopherrufo]

Americans would rather have a nuclear power plant built in their community than a data center, this may be the worst corporate public-relations fumble of all time

[Chamath Palihapitiya @chamath]

@asrrrrrr217 No. That’s the reason he never mentions it.

[Chamath Palihapitiya @chamath]

Zuck never mentions it because he knows the great engineers want to work at a space/search/ai company…

Not an advertising company.

[darrennn @genzzztrade]

Ben Thompson says the real money in AI is being made by Meta, not OpenAI or Anthropic

"The biggest impact of the models, the biggest monetization right now is probably not in Anthropic or OpenAI. It's the incremental gain that is happening for Google and Meta."

"They can actually validate their image creation and their text creation in a way no one else can. Their validation is the ad marketplace, like running a gazillion A/B tests to see what works. Most ads don't convert.”

"What do LLMs do? LLMs predict. We're going to move to this world where Meta is going to look at people and say, this person probably wants to see this next. And they're going to go find that thing and show it to them."

"The potential upside in terms of just showing people better ads that are more relevant to them, they only need to increase like a few percentage points for the returns to be billions and billions of dollars. This alone is worth them investing in being on the leading edge."

"This is why advertising is great. And Meta's advertising in particular is awesome. I get frustrated that Meta doesn't talk about that. Mark Zuckerberg has never really talked about the societal benefits of advertising except in passing in 20 years."