Baker argues software at 30% of IT spend today versus 7-10% in 2008-09 means it will get cut.
“And I think that is dangerous because in 'eight, 'nine software was seven to 10 of IT spend. And today it's roughly 30% excluding spending on the big cloud hyperscale infrastructures”
Baker estimates Anthropic could be doing $100-200 billion in revenue if unconstrained by compute availability.
“So I think they would be doing materially more a hundred, one hundred and fifty, maybe 200,000,000,000. So you might be buying it at more like five times unconstrained.”
Baker argues game theory suggests memory LTAs are durable and Nvidia may have significant cloud revenue shares
“Game theory suggests memory LTAs are likely to be durable. And yes, Nvidia may have a significant cloud business via revenue shares. https://t.co/GFN1kDQmSk”
Baker calculates eight gigawatts at $50B per gigawatt implies $400B revenue versus $73B consensus for SpaceX.
“If they bring on anywhere near that, the consensus estimate is 73,000,000,000. That's eight gigs at 50,000,000,000 a gig. And, obviously, that would not all be lit up at the beginning of twenty seven.”
Baker estimates SpaceX monetizes compute at $50B per gigawatt versus $73B consensus, with Grok and Cursor hitting $10B ARR quickly.
“And they're monetizing at something like 50,000,000,000 a gig and consensus estimates for next year are 73,000,000,000. So forget Starlink v three, forget Starlink direct to sell, Grok 4.5 and Cursor.”
Baker endorses data centers as beneficial for America, reacting to Quincy Washington's economic transformation
“Data centers are awesome for America in every way. https://t.co/gSe3Gf2kYp”