4 ms·

If AI is commoditising, who is Bahrain and who are the Saudis?

by JumpCrisscross 7mo ago

Urahandystar 7mo ago
The app layer is Bahrain.
mikelitoris 7mo ago
What does that mean?
- JumpCrisscross 7mo ago
  > What does that mean? I really couldn't have been more obscure, could I? :P In 1932, "the first oil field in the Persian Gulf outside of Iran" was discovered in Bahrain [1]. (The same year Saudi Arabia announced unification [2].) In the end, Saudi Arabia had larger reserves and wound up geopolitically dominating its first-moving rival. In commodities, the game tends to be scale in part through land grabbing. Less who got where first. To close the analogy, if AI does wind up commoditised, the layers at which that commodity is held are probably between power and compute [3]. So if AI commoditises (commodifies?), Google selling computer (and indirectly power) to Anthropic and OpenAI is the smarter play than trying to advantage Gemini. (If AI doesn't commoditise, the opposite may be true–Google is supercharging a competitor.) [1] https://en.wikipedia.org/wiki/Bahrain_Petroleum_Company https://en.wikipedia.org/wiki/Bahrain_Petroleum_Company [2] https://en.wikipedia.org/wiki/Proclamation_of_the_Kingdom_of_Saudi_Arabia https://en.wikipedia.org/wiki/Proclamation_of_the_Kingdom_of... [3] The alternate hypothesis is it's at distribution.
  - dmix 7mo ago
    Plus the whole thing of first mover advantage being a myth, especially in the tech industry
    - JumpCrisscross 7mo ago
      > Plus the whole thing of first mover advantage being a myth, especially in the tech industry Source? That would be surprising!
      - dmix 7mo ago
        https://hbr.org/2005/04/the-half-truth-of-first-mover-advantage https://hbr.org/2005/04/the-half-truth-of-first-mover-advant... https://static1.squarespace.com/static/5654eb6ee4b0e19716ec5a92/t/56be95b686db43b5489cb0bd/1455330748283/2005_HBR_The+Half+Truth+of+First+Mover+Advantage.pdf https://static1.squarespace.com/static/5654eb6ee4b0e19716ec5... Showing how old I am with that reference A more recent article https://www.productplan.com/learn/first-mover-advantage-fast-follower https://www.productplan.com/learn/first-mover-advantage-fast... I should say it’s “mostly” a myth, there are some fleeting competitive advantages to first mover but a lot of them don’t apply well to tech companies and there isn’t strong historical evidence supporting it.
      - 2df 7mo ago
        Why? Being a first mover only counts for something if it can yield exclusivity that is durable.. you should know this being a VC and all. Real options - hello? If you want to benefit massively off being a first mover, you better do the work in figuring it out how you are going to acquire exclusivity that lasts long enough that keeps most firms out.
- mh- 7mo ago
  I believe they were drawing a parallel to oil commoditization, but that's as far as I got.
catlover76 7mo ago
[dead]
nostromo 7mo ago
The company with the access to cheap and plentiful energy and the real estate to build data centers will be Saudi Arabia in your analogy. This is why SpaceX could be a dark horse in this race. Putting compute in space is expensive but so is building a data center in the US.
- bpye 7mo ago
  > Putting compute in space is expensive but so is building a data center in the US. You know what's also really hard in a vacuum? Dissipating heat.
  - JumpCrisscross 7mo ago
    > You know what's also really hard in a vacuum? Dissipating heat Correct. The economics of space-based DCs comes down to permitting delays versus radiator mass. At ISS-weight radiators (12 to 15 W/kg (EDIT: kg/kW)), you need almost decade-long delays on the ground (or 10+ percent interest rates) to make lifting worthwhile. Get down to current state-of-the-art in the 5 to 10 W/kg (EDIT: kg/kW) range, however, and you only need permiting delays of 2 to 3 years. If there is a game-changing start-up waiting to be built, it's in someone commercialising a better vacuum-rated radiator.
    - ambicapter 7mo ago
      Would you want more wattage per kg for a better radiator?
      - deleted 7mo ago
        [deleted]
      - JumpCrisscross 7mo ago
        Yes! Thank you–fixed.
- redanddead 7mo ago
  Putting it centrally globally makes a lot of sense, just like connecting airports Saudi will host the biggest data centers in the world

If AI is commoditising, who is Bahrain and who are the Saudis?

Urahandystar 7mo ago

The app layer is Bahrain.

mikelitoris 7mo ago

What does that mean?

JumpCrisscross 7mo ago
> What does that mean? I really couldn't have been more obscure, could I? :P In 1932, "the first oil field in the Persian Gulf outside of Iran" was discovered in Bahrain [1]. (The same year Saudi Arabia announced unification [2].) In the end, Saudi Arabia had larger reserves and wound up geopolitically dominating its first-moving rival. In commodities, the game tends to be scale in part through land grabbing. Less who got where first. To close the analogy, if AI does wind up commoditised, the layers at which that commodity is held are probably between power and compute [3]. So if AI commoditises (commodifies?), Google selling computer (and indirectly power) to Anthropic and OpenAI is the smarter play than trying to advantage Gemini. (If AI doesn't commoditise, the opposite may be true–Google is supercharging a competitor.) [1] https://en.wikipedia.org/wiki/Bahrain_Petroleum_Company https://en.wikipedia.org/wiki/Bahrain_Petroleum_Company [2] https://en.wikipedia.org/wiki/Proclamation_of_the_Kingdom_of_Saudi_Arabia https://en.wikipedia.org/wiki/Proclamation_of_the_Kingdom_of... [3] The alternate hypothesis is it's at distribution.
- dmix 7mo ago
  Plus the whole thing of first mover advantage being a myth, especially in the tech industry
  - JumpCrisscross 7mo ago
    > Plus the whole thing of first mover advantage being a myth, especially in the tech industry Source? That would be surprising!
    - dmix 7mo ago
      https://hbr.org/2005/04/the-half-truth-of-first-mover-advantage https://hbr.org/2005/04/the-half-truth-of-first-mover-advant... https://static1.squarespace.com/static/5654eb6ee4b0e19716ec5a92/t/56be95b686db43b5489cb0bd/1455330748283/2005_HBR_The+Half+Truth+of+First+Mover+Advantage.pdf https://static1.squarespace.com/static/5654eb6ee4b0e19716ec5... Showing how old I am with that reference A more recent article https://www.productplan.com/learn/first-mover-advantage-fast-follower https://www.productplan.com/learn/first-mover-advantage-fast... I should say it’s “mostly” a myth, there are some fleeting competitive advantages to first mover but a lot of them don’t apply well to tech companies and there isn’t strong historical evidence supporting it.
    - 2df 7mo ago
      Why? Being a first mover only counts for something if it can yield exclusivity that is durable.. you should know this being a VC and all. Real options - hello? If you want to benefit massively off being a first mover, you better do the work in figuring it out how you are going to acquire exclusivity that lasts long enough that keeps most firms out.
mh- 7mo ago
I believe they were drawing a parallel to oil commoditization, but that's as far as I got.

catlover76 7mo ago

[dead]

nostromo 7mo ago

The company with the access to cheap and plentiful energy and the real estate to build data centers will be Saudi Arabia in your analogy. This is why SpaceX could be a dark horse in this race. Putting compute in space is expensive but so is building a data center in the US.

bpye 7mo ago
> Putting compute in space is expensive but so is building a data center in the US. You know what's also really hard in a vacuum? Dissipating heat.
- JumpCrisscross 7mo ago
  > You know what's also really hard in a vacuum? Dissipating heat Correct. The economics of space-based DCs comes down to permitting delays versus radiator mass. At ISS-weight radiators (12 to 15 W/kg (EDIT: kg/kW)), you need almost decade-long delays on the ground (or 10+ percent interest rates) to make lifting worthwhile. Get down to current state-of-the-art in the 5 to 10 W/kg (EDIT: kg/kW) range, however, and you only need permiting delays of 2 to 3 years. If there is a game-changing start-up waiting to be built, it's in someone commercialising a better vacuum-rated radiator.
  - ambicapter 7mo ago
    Would you want more wattage per kg for a better radiator?
    - deleted 7mo ago
      [deleted]
    - JumpCrisscross 7mo ago
      Yes! Thank you–fixed.
redanddead 7mo ago
Putting it centrally globally makes a lot of sense, just like connecting airports Saudi will host the biggest data centers in the world