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Alphabet's 70% Return

Programming note: our next issue lands 2 March, where we will be diving into the market pressures facing software platforms. The $4 Trillion Vibe Shift If you rewind the tape just a year or two, the consensus narrative on Wall Street was that Alphabet was a vulnerable incumbent trapped by
Alphabet's 70% Return

The Equity/Debt Divide in AI

Programming note: ARPU will return on 23 February and examine the market narratives dominating the hyperscalers. Century of Faith The standard timeline for the AI economy is usually measured in months. We wait for the next model iteration, the latest GPU shipping estimates, or the next quarter's cloud
The Equity/Debt Divide in AI

Where is the AI Money Actually Going?

Programming note: The next issue lands 13 February, where we'll examine the financing of the AI economy. 120% Capture Rate Last time, we looked at the napkin math of OpenAI's intelligence treadmill, where every dollar of revenue seems to be immediately consumed by the cost of
Where is the AI Money Actually Going?

The Napkin Math of Intelligence

Programming note: Our next issue lands 6 February, where we'll take a look at the value capture in the AI buildout. $1 for $1 Revenue The conversation around a potential AI bubble has grown louder, yet the pace of capital expenditure from hyperscalers shows no signs of slowing.
The Napkin Math of Intelligence

Intel's Supply-Constrained Turnaround

Programming note: The next issue lands 30 January, where we'll take a look at the state of the AI economy. Hand-to-Mouth at the Foundry The central wager at Intel is that the world really needs a high-end alternative to TSMC, and that being a U.S.-based company
Intel's Supply-Constrained Turnaround

The Last-Mile Problem of AI

Build vs Buy The core value proposition of the enterprise software industry has always been a trade-off between complexity and convenience. Building your own custom software used to be incredibly expensive and risky, so you instead paid a monthly fee to a company like Salesforce or Intuit. In exchange for
The Last-Mile Problem of AI

OpenAI Wants Google's Clicks

ChatGPT's Ad Machine If you own the front page of the internet, your business model usually relies on a very specific type of math. Google handles roughly 14 billion searches every day, but the vast majority of those are economically worthless. If you search for "what time
OpenAI Wants Google's Clicks

The Quantum 2012 Moment

Programming note: ARPU will be off this week, back on Monday. Shovels for the Next Gold Rush If you are a global bank, you sometimes find it useful to tell your shareholders that you are on the cutting edge of technology. You want to suggest that you are using the
The Quantum 2012 Moment

Construction Firms with Software Valuations

Macrohard is Very Hard The ultimate goal for many Silicon Valley startups is to eventually become a software company. Software is a great business model because its second copy costs the same to produce as its billionth: essentially nothing. It escapes the physical economics of the factory floor, promising high
Construction Firms with Software Valuations

Physical AI's Convergence Play

Autonomous Cars Have Grown Legs Two massive, parallel industries have long spent hundreds of billions of dollars trying to solve one very specific, shared problem: how to navigate the messy, unpredictable physical world without hitting anything. The first industry was self-driving cars. The second was industrial robotics. The goal in
Physical AI's Convergence Play