Patel states $10 billion data centers target automated software engineering, not chat models.
“So no one is trying to make with these $10,000,000,000 data centers, they're not trying to make chat models. Right?”
Patel forecasts NVIDIA revenue exceeding $300 billion next year as infrastructure spending reaches nation-state scale.
“NVIDIA's revenue this year is gonna be, like, over $200,000,000,000, and next year expects over 300,000,000,000 plus Google's gonna spend, like, $50,000,000,000 on TPU data centers.”
Patel forecasts hyperscaler CapEx at $455-500 billion for next year versus Wall Street consensus of $360 billion.
“The consensus for the banks is $360,000,000,000 of spend next year across all of them. And my number is closer to, like it's, like, $45,500.”
Patel states OpenAI will deploy 16-18 gigawatts by end of 2028 requiring $300 billion spend.
“OpenAI is gonna have 18 gigawatts or 16 gigawatts by the end of twenty eight, and they're gonna be able to pay for it. And that's like, well, that's $300,000,000,000 of spend.”
Patel calculates $100B AI revenue requires $250B infrastructure with five-year depreciation at 50% margins.
“That $50,000,000,000 of COGS needs to burn on infra, which cost roughly with if a five if you're talking about five year depreciation, call it $250,000,000,000,”
Patel calculates $100B AI revenue requires $250B infrastructure spend at five-year depreciation, double current capex.
“That $50,000,000,000 of COGS needs to burn on infra, which cost roughly with if a five if you're talking about five year depreciation, call it $250,000,000,000, right, of infra Yeah. For a $100,000,000,000 of revenue.”
Patel notes Google's $180B and Amazon's $200B capex announcements caused stock declines despite hyperscalers seeing massive AI demand.
“Google announced a 180,000,000,000 of capex. The stock went down. And then Amazon announced 200,000,000,000 of capex and their stock went down like, I wanna say like 10%.”
Patel says Google spending $180B and Amazon $200B on AI infrastructure represents 4x increase from recent years.
“If we start looking at like, hey, this year, Google spending 2 Amazon spending $200,000,000,000, Google spending a $180,000,000,000 on on AI infrastructure primarily. Right?”
Patel predicts Google will eliminate its $100 billion annual cash flow next year by spending everything on AI infrastructure.
“Google will have no cash flow next year because they're they see AI so clearly, and they know that they need to spend every dollar they make on compute,”
AI compute infrastructure can be sold at prices that recover full capital expenditure within one year.
“Actually, no. I can sell my compute for $25 million a megawatt or $40 million a megawatt to Anthropic and Google. Even if it’s a short-term thing, I’ve sold it for this price, and I’ll recoup my entire CapEx in a year.”
Patel's models show $11 trillion AI CapEx through 2029, requiring over $5 trillion in new debt.
“In the modeling that we do, we have about $11,000,000,000,000 of CapEx from 2024 to 2029. Total. Total.”
Patel forecasts AI CapEx will exceed $2 trillion by 2028, up from just over $1 trillion in 2025.
“As we go forward into the future, the the numbers for computer ballooning, right, we're at, you know, you know, a little bit over a trillion dollars of CapEx this year.”
Patel identifies multi-trillion dollar funding gap as hyperscalers exhaust cash flows and raise debt.
“No one is generating that much cash from the business yet. Right? Hyperscalers, they funded all of the growth up until now. Google, Microsoft, Amazon, Meta.”
Patel questions where $3-4 trillion in CapEx will come from for 2028 AI infrastructure buildout.
“So if you're at 3 or $4,000,000,000,000 of CapEx, where does all this cash come from?”
Patel estimates $3-4 trillion total CapEx needed by 2028 across compute, data centers, and energy infrastructure.
“So to enable, let's say, that 100 gigawatts by 2030 or let's even like let's even like pare it down to 2028 where it's like 3 or $4,000,000,000,000 of CapEx across all of these items.”
Patel predicts AI labs will scale from tens of billions to trillions in annual spending by decade's end.
“As we go out into '28, it's gonna be more than $2,000,000,000,000. The labs are also taking an increasing percentage of this.”