The Week AI Grew Up

**Nathaniel Whittemore** (0:00)
Today on the AI Daily Brief, the week AI grew up. The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI.
All right, friends, quick announcements before we dive in. First of all, thank you to today's sponsors, KPMG, Granola, Robots and Pencils and Section. To get an ad-free version of the show, go to patreon.com/aidailybrief, or you can subscribe on Apple Podcasts. If you want to learn more about sponsoring the show, send us a note at sponsors at aidailybrief.ai. And of course, while you're hanging out at aidailybrief.ai, you can find out about everything going on in the ecosystem. You can find a link to the companion experiences. This week we had one for the AI Subsidy Era show, as well as one for the AI Power Rankings. Or you can find links to our free education programs like Agent OS where 3,500 or more of you are doing this now. And I'm starting to see people posting what they're building on social, which is very cool. In fact, if you want a preview of all the different types of training things we have coming up, you can go to aidbtraining.com. I'll be talking more about that in the future.
I wanted to share an experiment that I'm going to be doing sometimes. This show is obviously meant to cater to the most engaged and enfranchised AI users. If you're paying attention on a daily basis, you're in the top 1%, I would say, of people who are using these tools. However, there are lots of other folks out there who would like to be in the top 1% of AI users, but just don't have the time between their job, their life, their responsibilities, whatever it is. One of the obvious gaps for the AI Daily Brief is some sort of weekly recap. The reason that I haven't done it in the past is that I don't want to be repetitive for the daily listeners. But here's the experiment. I'm not going to commit to an every week weekly recap, but I am going to experiment with sometimes using Saturday for that, and sometimes when there's not all that much new news, which if that ever happens, it is 100% on the Friday show, never any other day. I will sometimes use that slot for a weekly exploration. What that weekly exploration will not be is just a regurgitation or a summary of the top five stories from the week or something like that. Instead, what it'll be is an exploration of what I think is the most important theme of the week, the meta story that the individual stories are all adding up to, the whole greater than the sum of the parts. This week for me, it was absolutely the idea that we are entering a different phase of the AI era. Across everything from business model to market reaction to new products, I think you can see this theme woven throughout. By the way, if you're wondering what the heck this MS Paint looking thing is, this is apparently a huge viral GPT image to prompt right now. The prompt that everyone is using is actually to copy an existing image, re-draw the attached image in the most clumsy, scribbly and utterly pathetic way possible, use a white background and make it look like it was drawn in MS Paint with a mouse. It should be vaguely similar but also not really, kind of matching but also off in a confusing awkward way, with that low quality pixel by pixel feel that really emphasizes how ridiculously bad it is. Actually, you know what, whatever, just draw it however you want. This is all over threads and a bunch of Asian channels right now and is now coming to X as well.
Hilariously, the exact opposite of the maturity that I'm going to talk about showing up across the dimensions of AI.
To get into the meat of this though, the first area of this growing up is a recognition of the demand crunch that we're experiencing and a consequent shift in business models. Now, the business model implications are the most significant, but the recognition of demand is what's driving it. Right, Zoguz Erken? What AI bubble? GPU rental prices are up 40% over the last six months. This isn't air, it's driven by real token demand. The top two AI labs now generate almost 60 billion aggregate annual revenue. The market is concentrated as the top companies have become so big, but this isn't because of hefty valuations. It's just the insane strength of their fundamentals. Patrick O'Shaughnessy this week had Dylan Patel from Semi Analysis on his podcast and said, Every conversation I have with Dylan, I'm really just trying to understand the supply and demand of tokens. And what Dylan pointed out on that show is that the analysis of who is in first or second place when it comes to these models is almost wholly irrelevant to the world we're actually living in. As Dylan put it, it's pretty clear that even the tier 2 or tier 3 lab are going to be sold out of tokens. And by the way, this showed up in the earnings call as well. Andy Jassy discussing Tranium said, We have such demand right now for Tranium, from various companies who will consume as much as we make. I expect over time there's a good chance we're going to sell racks over the coming years. We have to decide how much we're going to allocate to the existing demand and how much we're going to save to sell as racks. The way that OpenAI CFO Sarah Fryer put it, is calling it a vertical wall of demand. With compute being the bottleneck.