The AI race is on.
Nvidia’s $47.5B data center revenue in 2023 is 18% more than total data center revenues for the past 5 years combined.
Besides driven by AI applications, a big risk factor for the AI race is war over Taiwan. TSMC manufactures close to 90% of all chips, and if disrupted, will impact 10% of global GDP and cause a global depression.
That’s why there is a huge investment in domestic manufacturing capabilities - a prime example being the US CHIPS Act, providing $52B to accelerator domestic supply chain for semiconductors and reduce US reliance on international supply lines. Its 2 major goals are:
- Recruiting the world’s pioneers in semiconductors and bringing them into the US.
- Training and retaining an entirely new category of middle class manufacturing jobs in the US. The semiconductor industry could be just as revolutionary for America’s middle-class workforce as Henry Ford’s assembly line.
The expected scientific advancements and human ingenuity over chips and what we do with them will power changes in healthcare, space, digital currency, education, transportation, and cities…
Adapting a saying from Dune, the power over chips is power over all. Semiconductors dominate the markets. And will continue to do so for the foreseeable future as the base layer of the AI value accretion stack.