Catalyst Watch
Among the Stars
Welcome to Catalyst Watch at The Transcript, a report for paid subscribers that highlights investment themes from this week’s newsletter.
1. AI Capex Could Reach $3-$4 Trillion Per Year by the End of the Decade
Nvidia reported earnings last week and had many glowing things to say about the state of the AI industry.
As everyone knows, the AI theme of the moment is agentic AI, which is causing yet another step function increase in demand for token processing and inference.
“This was an extraordinary quarter. Demand has gone parabolic. The reason is simple: agentic AI has arrived. AI can now do productive and valuable work.” - Nvidia (NVDA 0.00%↑) CEO Jensen Huang
Enterprises are finding meaningful applications for AI and are increasing spending. This is driving an important economic change for the industry–profitability.
“Tokens are now profitable, so model makers are in a race to produce more. In the AI era, compute capacity is revenue and profits.” - Nvidia (NVDA 0.00%↑) CEO Jensen Huang
