Generative AI startups can’t win against the tech giants: Parmy Olson

In his bid to secure $7 trillion for AI chip development, Sam Altman unveils the harsh reality facing generative AI startups. The exorbitant cost of AI infrastructure, largely monopolised by tech giants, hinders smaller players like Unitary. As startups struggle to balance costs, the dilemma intensifies: build expensive foundation models or risk relying on existing ones, benefiting cloud giants and chip makers. Regulatory scrutiny further complicates acquisition prospects, potentially preserving the dominance of big tech, posing a risk to competition and societal influence in the evolving AI landscape.

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By Parmy Olson

Sam Altman's goal of raising about $7 trillion to make artificial-intelligence chips tells a story beyond his borderline-insane ambitions. First, the infrastructure needed to build AI has become exorbitantly expensive. Second, most of that value is still — still! — held by a handful of large technology companies — and the oligopoly is only going to get worse.

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