Dan Sundheim on AI economics
From Inside Dan Sundheim's Bets on Anthropic, OpenAI, and SpaceX · · Invest Like The Best
“I think that the real debate is these are extremely capital intensive businesses uh you know capital intensive uh to a degree that we've never seen before in the history of business and the question is you're spending a ton of capital and the ultimate return on that capital is unknown. So it's not like a normal business who builds a factory and kind of knows what they're going to sell. you are um spending tons of capital to train a model and the question is you know do the scaling laws um work such that the returns on that capital continue to be attractive which means that you will be able to attract more capital uh and build better models or are you going to get to a point where uh everyone looks back and says we raised too much money we spent too much training models we didn't get the economic return or I think equally likely if not more likely people would say um ultimately you will get the economic return but uh it just happened slower than you would have thought like enterprise adoption just didn't take off as quickly as you thought and therefore the problem is like when you are this capital intensive as a business it introduces financial leverage and operating leverage to a degree you don't see in normal businesses so you don't have the luxury of you know uh 2 or 3 years of things going slower than you otherwise you know uh would expect the scaling laws the returns on capital and uh the speed at which these tools and AI is adopted throughout the economy are the questions”
On , Dan Sundheim, Founder & CIO at D1 Capital Partners, spoke about AI economics 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.