Money, the sinews of the artificial intelligence battle
The race for so-called generative artificial intelligence, which has accelerated in recent months, requires colossal investments, which only the technological giants can afford, at the risk of seeing these companies, in the long term, control this sector.
According to an estimate by SemiAnalysis, ChatGPT, OpenAI’s superstar interface launched in November, gobbles up around $700,000 a day in running costs.
According to The Information website, Sam Altman, the boss of OpenAI, which lost $540 million last year, spoke of fundraising reaching $100 billion in the coming years to finance the development of the young California firm.
“We are going to be the most capital-intensive start-up in the history of Silicon Valley,” the leader recently declared during a roundtable.
Google, Microsoft, with the help of OpenAI or Meta, have already invested billions to build their own generative artificial intelligence (AI) interfaces, i.e. capable of generating content on demand in everyday language .
“People don’t realize that AI like ChatGPT requires massive computing power,” says independent analyst Jack Gold. “How many companies can afford to buy 10,000 H100 units from Nvidia?” – graphics processors (GPUs) in high demand for AI, the price of which hovers around $ 30,000 each – he asks.
A universe is emerging more and more clearly in which only a handful of companies have the financial strength to build, from scratch, a model of generative artificial intelligence likely to compete with existing interfaces.
The others have no choice but to use the technology and capabilities of these colossi, as they already do for remote computing (cloud), which has become an income for Microsoft, Google or Amazon.
AI and the cloud are coming together and are likely to increase the dependence of companies, whose remote computing needs will increase to create versions adapted to their needs of large models of generative artificial intelligence.
– “Hen with the golden eggs” –
The cost of using the cloud is already “a very underestimated problem for many companies” and it could increase even further with generative AI, says Stefan Sigg, product manager at software publisher Software AG.
Microsoft’s annual report said the group’s cloud margins reached 70% last year, while Amazon, the other cloud leader, generated $22 billion in operating profit from its dedicated subsidiary. AWS (Amazon Web Services).
“The monetization of the cloud with (its subsidiary) Azure is a golden hen” for Microsoft, underlines Dan Ives, of Wedbush Securities. “We are talking about 20, 30 or even 40 billion dollars per year in the long term if the bet on AI pays off.”
For the analyst, the general manager of Microsoft Satya Nadella benefits from a grace period of six to nine months before having to demonstrate that the strategic priority for generative AI is reflected in the group’s profits.
“We’re going to price these new AI possibilities,” Microsoft chief financial officer Amy Hood said last month, “and ultimately grow operating profit” (earnings before interest and taxes).
“Training (of AI models) and ChatGPT will become a very important cloud service in the future,” predicts Tenry Fu, general manager of Spectro Cloud, which specializes in remote computing optimization.
But after this phase of development adapted to specific needs, “the company will have its own model” and its dependence on the essentials of the cloud should decrease, he assures.
US regulators are closely monitoring the structure of this still fledgling market.
“As regulators, we must ensure that these opportunities for new entrants are not destroyed by the giants of the sector,” recently pleaded the president of the American Competition Authority, Lina Khan, on the CNBC channel.
“It is absolutely true that the number of companies that will be able to develop the most innovative models is going to be limited, simply because of the resources required,” admitted Sam Altman during a hearing in Congress on Tuesday.
“Therefore, he added, it is necessary that we and our competitors be the object of unprecedented surveillance.”