Power Cut
We recorded 14 claims from this post. 14 can’t be checked. 9 more are held. Read the post at its source.
Claims from this post (14)
In the order they appear in the post. Each quotation is the speaker’s words in this post. A label such as “Supported” or “Can’t be checked” is the claim’s current assessment; its page has the evidence and the reasons.
Assessment: Can’t be checkedSaid
Observation
“These numbers heavily suggest that Microsoft — the biggest purchaser of NVIDIA's GPUs and, according to TD Cowen, "the most active [data center] lessee of capacity in 2023 and 1H24" — does not believe there is future growth in generative AI, nor does it have faith in (nor does it want responsibility for) the future of OpenAI.”
Our reading: Microsoft's data center cuts strongly suggest it does not believe in future generative AI growth or have faith in OpenAI's future.
No horizon
Assessment: Can’t be checkedSaid
Causal claim
“I believe the reason Microsoft is cutting back is that it does not have the appetite to provide further data center expansion for OpenAI, and it’s having doubts about the future of generative AI as a whole.”
Our reading: The author believes Microsoft is cutting back because it does not have the appetite to provide further data center expansion for OpenAI and is having doubts about the future of generative AI as a whole.
No horizon
Qualifier: I believe
Assessment: Can’t be checkedSaid
Observation
“And, again, the total figure is likely far higher than a gigawatt.”
Our reading: The total data center capacity Microsoft walked away from is likely far higher than a gigawatt.
No horizon
Assessment: Can’t be checkedSaid
Causal claim
“In the event that Microsoft believed there was meaningful growth in generative AI, it wouldn't be canceling anything, or at the very least wouldn't be canceling so much.”
Our reading: If Microsoft believed in meaningful generative AI growth, it would not be canceling data center capacity, or not so much.
No horizon
Qualifier: if Microsoft believed in meaningful generative AI growth
Assessment: Can’t be checkedSaid
Rhetoric
“Canceling cities-worth of capacity at a time when artificial intelligence is supposedly revolutionizing everything suggests that artificial intelligence isn't really revolutionizing anything.”
Our reading: Microsoft's capacity cancellations suggest AI is not really revolutionizing anything.
No horizon
Assessment: Can’t be checkedSaid
Observation
“Given that $3bn is equivalent to OpenAI’s entire revenue from selling premium access to ChatGPT in 2024 — which included some major deals with the likes of PriceWaterhouseCoopers — I’m inclined to believe the latter.”
Our reading: SoftBank's $3 billion-a-year purchase of OpenAI technology is likely a backdoor subsidy rather than a reflection of value.
No horizon
Assessment: Can’t be checkedSaid
Observation
“At worst, this situation could suggest that Microsoft is actively dumping OpenAI, and is having questions about the fundamentals of the generative AI industry.”
Our reading: At worst, Microsoft could be actively dumping OpenAI and questioning generative AI's fundamentals.
No horizon
Qualifier: at worst
Assessment: Can’t be checkedSaid
Observation
“Nevertheless, I have real concerns about whether OpenAI is even capable of expanding further, starting with a fairly obvious one: its only source of money, SoftBank.”
Our reading: OpenAI may not be capable of expanding further, given its only money source is SoftBank.
No horizon
Assessment: Can’t be checkedSaid
Forecast
“OpenAI burned $5 billion in 2024, a number it’ll likely double in 2025 (remember, the Information reported that OpenAI was projected to spend $13 billion on compute alone with Microsoft in 2025), and it has no path to profitability.”
Our reading: OpenAI will likely double its $5 billion 2024 cash burn in 2025.
No horizon
Assessment: Can’t be checkedSaid
Observation
“Microsoft walking away from over a Gigawatt of data center plans — equivalent to as much as 14% of its current data center capacity — is a direct sign that it does not believe the growth is there in generative AI”
Our reading: Microsoft's walking away from over a gigawatt of plans directly signals it doesn't believe in generative AI growth and may have overbuilt.
No horizon
Assessment: Can’t be checkedSaid
Observation
“Microsoft making such a material pullback on data center expansion suggests that the growth in generative AI products, both those run on Microsoft’s servers and those sold as part of Microsoft’s products, do not have the revolutionary growth-trajectory that both CFO Amy Hood and CEO Satya Nadella have been claiming”
Our reading: Microsoft's material pullback on data center expansion suggests that generative AI products, both those run on Microsoft's servers and those sold in Microsoft's products, lack the revolutionary growth trajectory Amy Hood and Satya Nadella claim, and it calls into question generative AI's viability as a growth vehicle for any hyperscaler.
No horizon
Qualifier: suggests
Assessment: Can’t be checkedSaid
Recommendation or value judgment
“It is time for investors and the general public to begin demanding tangible and direct numbers on the revenue and profits related to generative AI, as it is becoming increasingly obvious that the revenues are small and the profits are non-existent.”
Our reading: Investors and the public should demand direct generative AI revenue and profit figures.
No horizon
Assessment: Can’t be checkedSaid
Forecast
“OpenAI burned $5 billion in 2024, will likely burn $11 billion in 2025, and will continue burning money in perpetuity”
Our reading: OpenAI will likely burn $11 billion in 2025.
No horizon
Assessment: Can’t be checkedSaid
Rhetoric
“If I’m right, tech’s only growth story is dead.”
Our reading: If the author's analysis is right, generative AI, tech's only growth story, is dead.
No horizon
Qualifier: if I'm right
Held from this post (9)
These records did not pass every check, so nothing about them is published. Held is not a finding.
- The two reviews reached different assessments. Our reading, not assessed: Hardware upgrades could account for some of Microsoft's stated $80 billion 2025 AI capital expenditure but would be nowhere near that figure.
- The two reviews read the claim differently
- The two reviews read the claim differently
- The two reviews read the claim differently
- The two reviews read the claim differently
- The two reviews read the claim differently
- The two reviews reached different assessments. Our reading, not assessed: The author does not see how OpenAI survives, and SoftBank's involvement adds to his concern.
- The two reviews read the claim differently
- The two reviews reached different assessments. Our reading, not assessed: Generative AI does not have meaningful mass-market use cases, and there does not appear to be meaningful consumer adoption outside ChatGPT, mostly because almost all AI coverage ends up marketing OpenAI.