[lqcfcjx]

From financial perspective, Sequoia had a very insightful statement: "For every $1 spent on a GPU, roughly $1 needs to be spent on energy costs to run the GPU in a data center. So if Nvidia sells $50B in run-rate GPU revenue by the end of the year (a conservative estimate based on analyst forecasts), that implies approximately $100B in data center expenditures. The end user of the GPU—for example, Starbucks, X, Tesla, Github Copilot or a new startup—needs to earn a margin too. Let’s assume they need to earn a 50% margin. This implies that for each year of current GPU CapEx, $200B of lifetime revenue would need to be generated by these GPUs to pay back the upfront capital investment."

The power/environment cost is usually largely ignored and it can be as much as the hardware cost (this is insane!). And if this cost won't decrease over time, it'll add additional risks to all end consumer companies being profitable.