Dan Sundheim on hyperscalers
From Inside Dan Sundheim's Bets on Anthropic, OpenAI, and SpaceX · · Invest Like The Best
“I think that the hyperscalers are a worse business model going forward. I think that you know AWS and Azure I maybe Azure doesn't accelerate certainly uh GCP I think these businesses are going to accelerate for a while just because they are um you know their customer bases anthropic openi are growing at enormous pace and as they get to be a bigger part of the business the growth accelerate the problem is is that you went from a dynamic where uh AWS Azure um to some extent GCP um their customer base was like every corporation in the world and therefore um uh they had fragmentation and they had the benefits massive economies of scale that no single company could get. Um and it was a good very good business. Um the problem going forward is that I think that uh economically it's highly unlikely that a that LLMs are not very concentrated in the hands of like four or five companies. those companies right now um you know they are obviously as we discussed they're investing a ton uh and they are you know cash flow negative and therefore they're looking for compute anywhere they can get it but if we're correct and if anyone who owns these companies is correct at some point in the next 5 to 10 years they will be generating enormous amounts of free cash flow when that happens I think that uh they are likely to insource the compute every year AI is going to be a bigger percentage of the workloads uh at any hyperscaler.”
On , Dan Sundheim, Founder & CIO at D1 Capital Partners, spoke about hyperscalers during Inside Dan Sundheim's Bets on Anthropic, OpenAI, and SpaceX on Invest Like The Best.
About Dan Sundheim
Dan Sundheim, founder and CIO of D1 Capital Partners, has discussed the firm’s investments in private companies including SpaceX, OpenAI, and Anthropic, describing them as "some of the largest companies in the world by market cap" that are "innovating in a way that's going to change the world." He stated that he believes AI will be "the most important technology" for the next decade or two and that it will drive revolutions in areas like robotics and biotech. Sundheim also expressed concern about a potential "collision course with China over semiconductors," warning that disruption to that supply chain could lead to a "depression type economy." Reflecting on the 2021 GameStop short squeeze, Sundheim called it "the toughest few weeks of my career" and noted that his firm had not been prepared for shorts to rise 300-400% in two weeks, as such a move was not in historical data. He said the experience taught him that "risk management has to happen before the fact." Sundheim also shared that he is most proud of overcoming the adversity of that period and the market challenges of 2022, stating that "learning from that, getting better and coming back" was the most difficult thing he has had to do.