Ben Thompson on AI crowd-out
From The Memory Crowd-Out | Stratechery by Ben Thompson · · Stratechery
“This AI crowd out dynamic arguably started with the hyperscalers who diverted ever-increasing parts of their budget to GPUs in place of CPU purchases, but now it's coming for everything from grid power to turbines and now to components and it's only going to increase and become more impactful to end users.”
On , Ben Thompson, Founder at Stratechery, spoke about AI crowd-out during The Memory Crowd-Out | Stratechery by Ben Thompson on Stratechery.
About Ben Thompson
Ben Thompson, founder of Stratechery, has been writing and speaking extensively about the intersection of AI, compute infrastructure, and corporate strategy. In a June 2026 article, he described Google's business model as one where "supply is free," consumers "willfully compete against each other to raise your prices," and users decide which customers get to pay, calling it "the most beautiful business model of all time." He contrasted Google Services' high-margin advertising business with Google Cloud's faster-growing but lower-margin AI-driven segment, and questioned whether Google Services' cash flow would ultimately fund a larger AI infrastructure play. Thompson also analyzed SpaceX's IPO and the concept of data centers in space, arguing that the fundamental advantage is "free power" and that the proposal offers an alternative path to unlimited compute, though he acknowledged the investment is "unbelievably risky." Thompson has also commented on the competitive dynamics among AI companies. He noted that Anthropic's willingness to pay for compute, driven by its demand and ability to raise money, makes it a key player in the market for scarce compute capacity. He discussed the implications of Anthropic's "Mythos" model, describing it as a major security threat and suggesting that limiting its availability helps the company maintain pricing power. In a podcast appearance, Thompson stated that "100 years from now when you look back on our moment, you're not going to talk about our politics. You're going to talk about the fact that we're living through a digital technological revolution that remade the economy which is reshaping culture and community." He also addressed Apple's AI strategy, arguing that the company's deterministic culture is fundamentally unsuited to the probabilistic world of AI, and that its decision to rely on third-party AI models may be a short-term win but a long-term vulnerability.
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