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$5 to $7 Trillion? Developing cutting edge chip fabrication technologies is insanely expensive but that number still strikes me as far too high. Unfortunately,

$5 to $7 Trillion? Developing cutting edge chip fabrication technologies is insanely expensive but that number still strikes me as far too high. Unfortunately, the article doesn't go into any detail on the allocation of funds for a capital raise that unprecedentedly massive. I don't doubt that Altman may have cited that range, my skepticism is more centered on the practical possibility of productively putting that much money to work in a relevant startup time frame (~five years). Maybe there's missing relevant detail, like perhaps he was referencing a cumulative total spend over a decade or longer. Just for comparison TSMC's market cap is ~$500B, ASML (who makes the cutting edge fab machines) is ~$350B. NVidia itself is ~$1.7T but that also includes non-AI things. Even if you include buying smaller players in addition to those, you could theoretically outright own the entire relevant market for less than $3T. And that's at full de-risked, retail public market price in a very frothy time period. The new venture cost should be less, otherwise investors would be wiser to just buy the existing players with all their IP, proven know-how and market momentum.

riversflow 3y ago
I mean I think the sales pitch in this case is literally, “Burn an enormous pile of (oil) money, to gain a large but smaller pile of (chip) money”
- sofixa 3y ago
  > “Burn an enormous pile of (oil) money, to gain a large but smaller pile of (chip) money” But continue having that pile of (chip) money after the oil and gas money runs out (either due to decarbonisation or due literally the resources running out).
- consumer451 3y ago
  Let's assume it works. So then ultra-religious authoritarians own part of AGI. Sounds great!?
  - jacooper 3y ago
    It really doesn't change much.
    - consumer451 3y ago
      Please explain. People are upset about "woke" ChatGPT, because they have the comfort of that first-world problem. Thing is, it can actually get much worse than optimizing for inclusion. Do we really want Sharia authoritarian AGI? Or am I misunderstanding what you are saying with your terse reply?
      - lvh 3y ago
        We're talking about chips: stuff optimized for inference and training. It may have a lot of memory, it may be able to perform a lot of operations, but it would be difficult for it to enforce high-level concepts like "woke ChatGPT".
        consumer451 3y ago
        Are you telling me that the investors who give sama $trillions don't expect influence on the final product? Isn't this the definition of soft power? [0] When NVIDIA sells GH200s to OpenAI, they expect nothing beyond the transaction. That's very different from getting trillions of dollars in investment from somebody to build chip fabs, etc. [0] https://en.wikipedia.org/wiki/Soft_power https://en.wikipedia.org/wiki/Soft_power
      - jacooper 3y ago
        I meant that the "first world" isn't as fair as you think it is, this should be especially clear now.
- jaxson999 3y ago
  Oil money has openly said they want to diversify. Hysterical to me people on here in other threads would be knocking Altman for trying to raise huge money from people with huge money who have literally made it a goal to diversify into other areas. What a moron.
deleted 3y ago
[deleted]
anon373839 3y ago
Not to mention, you can’t just throw a large pile of money somewhere and create another ASML. It took them decades to get EUV working, as that tech is insanely sensitive and complex.
- ojosilva 3y ago
  Unless you are outright buying some of their key people and their secrets. Or instead just licensing the tech from ASML. It would be a quick buck for ASML with little downside.
itishappy 3y ago
$7T is the total volume of semiconductor sales over the past 20 years. https://www.wsts.org/ https://www.wsts.org/ $7T would buy more than 100 modern fabs. (TSMC has 4.) https://www.bcg.com/publications/2023/navigating-the-semiconductor-manufacturing-costs https://www.bcg.com/publications/2023/navigating-the-semicon... $7T would buy 20 thousand high-NA EUV machines from ASML. https://www.tomshardware.com/pc-components/cpus/asml-ships-groundbreaking-new-chipmaking-tool-to-intel-high-na-lithography-tool-needed-for-next-gen-process-nodes-could-cost-dollar400-million https://www.tomshardware.com/pc-components/cpus/asml-ships-g... $7T would fund both the Apollo and Artemis programs 20 times over. (In today's dollars.) https://www.space.com/nasa-artemis-moon-program-93-billion-2025 https://www.space.com/nasa-artemis-moon-program-93-billion-2... $7T is the total volume of trade entering and exiting the US per year. https://ustr.gov/countries-regions https://ustr.gov/countries-regions $7T is the GDP of South America and Africa combined. https://en.wikipedia.org/wiki/Economy_of_South_America https://en.wikipedia.org/wiki/Economy_of_South_America https://en.wikipedia.org/wiki/Economy_of_Africa https://en.wikipedia.org/wiki/Economy_of_Africa
- digdugdirk 3y ago
  Thank you for that. What a delightful dash of context.
theandrewbailey 3y ago
Apple and Microsoft are $3 trillion each, and they don't have fabs. If anyone has good reasons for getting into semiconductor manufacturing and has the pockets to do so, it's them, but they aren't. I'm pretty sure that it has something to do with risk, not money.

riversflow 3y ago

I mean I think the sales pitch in this case is literally, “Burn an enormous pile of (oil) money, to gain a large but smaller pile of (chip) money”

sofixa 3y ago
> “Burn an enormous pile of (oil) money, to gain a large but smaller pile of (chip) money” But continue having that pile of (chip) money after the oil and gas money runs out (either due to decarbonisation or due literally the resources running out).
consumer451 3y ago
Let's assume it works. So then ultra-religious authoritarians own part of AGI. Sounds great!?
- jacooper 3y ago
  It really doesn't change much.
  - consumer451 3y ago
    Please explain. People are upset about "woke" ChatGPT, because they have the comfort of that first-world problem. Thing is, it can actually get much worse than optimizing for inclusion. Do we really want Sharia authoritarian AGI? Or am I misunderstanding what you are saying with your terse reply?
    - lvh 3y ago
      We're talking about chips: stuff optimized for inference and training. It may have a lot of memory, it may be able to perform a lot of operations, but it would be difficult for it to enforce high-level concepts like "woke ChatGPT".
      - consumer451 3y ago
        Are you telling me that the investors who give sama $trillions don't expect influence on the final product? Isn't this the definition of soft power? [0] When NVIDIA sells GH200s to OpenAI, they expect nothing beyond the transaction. That's very different from getting trillions of dollars in investment from somebody to build chip fabs, etc. [0] https://en.wikipedia.org/wiki/Soft_power https://en.wikipedia.org/wiki/Soft_power
    - jacooper 3y ago
      I meant that the "first world" isn't as fair as you think it is, this should be especially clear now.
jaxson999 3y ago
Oil money has openly said they want to diversify. Hysterical to me people on here in other threads would be knocking Altman for trying to raise huge money from people with huge money who have literally made it a goal to diversify into other areas. What a moron.

deleted 3y ago

[deleted]

anon373839 3y ago

Not to mention, you can’t just throw a large pile of money somewhere and create another ASML. It took them decades to get EUV working, as that tech is insanely sensitive and complex.

ojosilva 3y ago
Unless you are outright buying some of their key people and their secrets. Or instead just licensing the tech from ASML. It would be a quick buck for ASML with little downside.

itishappy 3y ago

$7T is the total volume of semiconductor sales over the past 20 years. https://www.wsts.org/ https://www.wsts.org/ $7T would buy more than 100 modern fabs. (TSMC has 4.) https://www.bcg.com/publications/2023/navigating-the-semiconductor-manufacturing-costs https://www.bcg.com/publications/2023/navigating-the-semicon... $7T would buy 20 thousand high-NA EUV machines from ASML. https://www.tomshardware.com/pc-components/cpus/asml-ships-groundbreaking-new-chipmaking-tool-to-intel-high-na-lithography-tool-needed-for-next-gen-process-nodes-could-cost-dollar400-million https://www.tomshardware.com/pc-components/cpus/asml-ships-g... $7T would fund both the Apollo and Artemis programs 20 times over. (In today's dollars.) https://www.space.com/nasa-artemis-moon-program-93-billion-2025 https://www.space.com/nasa-artemis-moon-program-93-billion-2... $7T is the total volume of trade entering and exiting the US per year. https://ustr.gov/countries-regions https://ustr.gov/countries-regions $7T is the GDP of South America and Africa combined. https://en.wikipedia.org/wiki/Economy_of_South_America https://en.wikipedia.org/wiki/Economy_of_South_America https://en.wikipedia.org/wiki/Economy_of_Africa https://en.wikipedia.org/wiki/Economy_of_Africa

digdugdirk 3y ago
Thank you for that. What a delightful dash of context.

theandrewbailey 3y ago

Apple and Microsoft are $3 trillion each, and they don't have fabs. If anyone has good reasons for getting into semiconductor manufacturing and has the pockets to do so, it's them, but they aren't. I'm pretty sure that it has something to do with risk, not money.