Sacks questions whether AI compute pricing at $30-50 per watt is sustainable, while Musk argues memory constraints will keep prices elevated.
“ But the segment that drove the stock's decline — the AI compute buildout — is also the one with the largest open questions, and Sacks sharpened them into two. First, is the $30-50 per watt spot price for compute durable? Elon argued the market is memory-constrained: memory production is growing perhaps 20% next year while demand is up 200% plus, so the bottleneck persists and prices may rise. Sacks's corroborating arithmetic: a gigawatt is a billion watts; at $50 per watt, a gigawatt is worth $50 billion in annualized revenue. ”
Friedberg argues compute infrastructure investment has obvious high return on invested capital due to extreme demand.
“And because of the extreme demand for compute, it's a pretty obvious kind of ROIC model, return on invested capital. So if you make this sort of an investment, you have significant demand for infrastructure.”