Gerstner notes OpenAI has not built data centers while Microsoft, Oracle, CoreWeave, and SoftBank are building them.
“I haven't heard them break ground on any data center. I hear Microsoft building data centers, Oracle building data centers, CoreWeb building data centers, SoftBank building data centers.”
Gerstner states Microsoft has invested $13-14 billion in OpenAI for 27% ownership on a fully diluted basis.
“Microsoft started investing in 2019, has invested in the ballpark of $1,314,000,000,000 dollars into OpenAI. And for that, you get 27% of the business ownership in the business on a fully diluted basis.”
Gerstner calculates Microsoft could reach $7 trillion market cap in ten years growing at just 7% annually.
“the largest company, Microsoft, today is like 3 and onetwo trillion. Let's say that Microsoft, I don't know, doubles in ten years. It would only be growing at 7% per year.”
Gerstner says Invest America could pass by July 4, 2026, giving 40 million children ownership in Apple, Berkshire, and Microsoft.
“If the president signs this into law as part of reconciliation on July 4 of this year, that means on our two hundred and fiftieth anniversary, 07/04/2026, we can have 40,000,000 children, 40,000,000 families.”
Gerstner argues GPU capex sustainability depends on hyperscalers generating commensurate inference revenues, citing Satya's disciplined approach.
“It all comes down ultimately to the revenues that are generated by the people who are making the purchases of the GPUs. Right?”
Gerstner identifies AWS disadvantage risk if Microsoft's OpenAI access proves decisive and Amazon lacks equivalent.
“I think there is a lot of worry about, you know, if Microsoft has access to OpenAI and Amazon doesn't, is that going to put them at a disadvantage if open AI is a runaway winner?”
Gerstner says Microsoft and NVIDIA remain relatively safe investments for AI exposure amid uncertainty.
“I think that if you're an investor, owning some of the companies that you think you're really confident are going to continue to compound and benefit from AI, the Microsofts of the world, the Nvidias of the world, seems to me like a relatively safe place.”
Gerstner says he was concerned a year ago that Microsoft's OpenAI partnership would cause Amazon customers to switch to Azure.
“A year ago, I was concerned and some others were whether or not Microsoft's early lead because of their partnership with OpenAI would cause a bunch of customers to leave Amazon and go to Azure in order to take advantage of the benefits of OpenAI.”
Gerstner cites Microsoft, Amazon, and Meta all confirming massive AI inference and future infrastructure investments in NVIDIA.
“It's up because Susan Lee from Meta just told us yesterday that they're going to make huge future investments in infrastructure, read NVIDIA, in order to support all of these initiatives.”
Gerstner says Altimeter's best AI bets over the past two years were NVIDIA, Microsoft, and Snowflake.
“the best bets on AI over the course of the last eighteen months or two years, we were fortunate to be in, were NVIDIA and Microsoft, Snowflake.”
Gerstner recounts that Satya Nadella bought his company Faircast for Microsoft in 2008 when running Bing.
“The person who bought Ferricast in 2008 for Microsoft was Satya Nadella. Oh, He was running Bing at the time. Right.”
Gerstner says Nadella predicted fifteen years before ChatGPT that Microsoft needed answers, not links, to beat Google.
“Fifteen years before ChatGPT started producing answers, Satya knew that that's where they had to get to if they were going to leapfrog Google.”
Gerstner questions why OpenAI took a dilutive $10B round at roughly $30B valuation.
“what was their motivation to take such a dilutive round, know, the 10,000,000,000 at what was the valuation at 30?”