Watts, Wafers, and the Future of AI Infra | Gavin Baker

The AI revolution represents the most significant moment in the history of capitalism, characterized by unprecedented growth rates, such as Anthropic adding $11 billion in ARR in a single month. This expansion is currently constrained by energy availability and, more critically, the supply of advanced semiconductor wafers from Taiwan Semiconductor. While the industry faces a potential bubble due to herd-like market sentiment, current growth is largely supported by operating cash flows rather than debt. The disaggregation of inference and pre-fill processes, alongside specialized hardware like wafer-scale computing, is extending the useful life of existing GPU fleets and improving capital efficiency. As AI shifts toward usage-based pricing, frontier models are capturing the majority of economic value, though the emergence of agentic workflows and specialized hardware continues to reshape the competitive landscape for both hyperscalers and startups.