Baker notes Taiwan Semi will spend more on CapEx in two years than in the preceding five years.
“Taiwan Semi, their 2022 CapEx is going to be many multiples of 2019. 2021 and 2022, they'll spend more than they did in the preceding five years. So there is a massive supply response coming.”
Baker says Taiwan Semi will spend more on CapEx in 2021-2022 than in the preceding five years.
“Taiwan Semi, their 2022 CapEx is going to be many multiples of 2019. 2021 and 2022, they'll spend more than they did in the preceding five years.”
Baker notes Amazon spent more on CapEx in two years than in the preceding twenty years.
“It's not a comment on Amazon. It's just a comment on the supplier response. They have spent more money on CapEx in the last two years than they did in the preceding twenty years.”
Baker provides specific numbers showing Amazon's CapEx jumped from $62B over 20 years to $87B in just two years.
“From 1999 to 2019, they spent $62,000,000,000 on CapEx. They're going spend $87,000,000,000 in 2020 and 2021. That's crazy.”
Baker argues that whether AI buildout is funded by debt or cash flows is critical for bubble risk.
“And a very important distinction we will come to is whether or not that build out is funded out of debt or cash flows. It's a critical distinction for AI.”
Baker finds it funny given worry that Microsoft is about to cut capex
“Kinda funny given the worry that Microsoft is about to cut capex https://t.co/Bm0v5gsTD0”
Baker finds it funny given worry that Microsoft is about to cut capex
“Kinda funny given the worry that Microsoft is about to cut capex https://t.co/Bm0v5gsTD0”
Baker notes compute brought on in June may show Q3 acceleration
“@armandorvila They brought on a lot of compute in the month of June so may be more of a Q3 acceleration there - we shall see very shortly”
“@jukan05 4 gigawatts this year and another 4 next year per this report. Spot price for compute has gone up since they signed their Anthropic and Google deals.”
Baker predicts AI capabilities will be far better than expected in two years and companies will not slow spending.
“way better than you think in two years. So just no chance they're taking their foot off the gas.”