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For instance, the price of Nvidia chips has dropped significantly this year, indicating a potential data bottleneck. Similarly, power and cooling challenges are likely to arise as the demand for computational resources increases. Investors need to be mindful of these shifting bottlenecks and ensure that the financing of the hardware infrastructure is well-structured to avoid potential pitfalls.
Foundation Models: The Backbone of AI
The foundation models, such as those developed by Anthropic, OpenAI, and Gemini, are the backbone of the AI software market. These models are ubiquitous, with nearly 80% of the software market relying on them. While the revenue in this space is growing rapidly, the price competition is intense, with token prices falling hundredfold in the last two years.
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