Gavin Baker says computing power will stay tight into 2027

Gavin Baker, who runs the investment firm Atreides Management, said on the podcast TBPN that computing power will stay tight well into 2027. The episode was posted Tuesday, Oct. 27.

This matters because AI runs on chips called GPUs, and the companies building AI have to rent them. When chips are scarce, those companies pay more. That cost can reach the AI tools people use, though Baker spoke about companies and not consumers.

Baker said the price to rent almost any GPU went up every day in October. He said that is true for renting today and for booking ahead. One company in his portfolio got a cluster of 4,000 chips this year and wants another in September 2027. He said they were shocked by the price. At 1:35:00 he put it this way.

"If you want to cluster a year from now, you have to pay a lot of money."

He also said running a big cluster is like running a Formula One team. He thinks experienced operators have the edge, since some firms take three to six months to get chips working.

The outlet note ran a write-up of the talk on Wednesday. It covers the roughly 41-minute conversation. It includes Baker's view of what it calls the GPU market contango. It also asks whether computing power will run out by 2027.

Baker said his firm is an investor in Silicon Data, the data source he cited. Nvidia sells the chips and the pre-assembled product he praised. He expects some firms to energize their chips faster than others, and said the future is uncertain.

Watch the 8 minutes where he explains it.1:33:23