Chamath Palihapitiya, the CEO of Social Capital, a venture capital firm, has warned that a decline in power and computing resources could cause major issues for artificial intelligence (AI) firms like Anthropic and OpenAI. He noted that while this decline slows down Anthropic and OpenAI’s operations, it could give Elon Musk an edge due to his control over key AI-backed firms such as xAI.
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Palihapitiya said on the All-In Podcast last weekend that AI’s biggest problem is no longer just building better models. He noted that the sector is now facing new issues tied to poor power, data centers, and computing resources.
He pointed out a gap between the projects many AI firms say they’re working on and what is actually being built. According to him, many large-scale projects are stuck because of permits and delays in regulation. As a result, only half of the planned work is finished, with the rest still under construction.
He also linked these issues to the recent concerns about OpenAI. Recently, the company had missed its internal revenue and user growth targets. This raises doubts about whether the company can keep up with the high cost of running its AI systems. Palihapitiya also noted that other AI firms, such as Anthropic, might face the same issues if the situation continues.
Elon Musk and Big Tech Could Gain Upper Hand
Palhapitiya noted that companies controlling key resources like data centers, AI chips, and power supply could gain more from this shift. These include public companies like Oracle Corporation (ORCL), Amazon (AMZN), Meta Platforms (META), Microsoft (MSFT), and Alphabet Class A (GOOGL).
He added that Musk could also be in a strong position due to his access to computing resources. His firms, SpaceX, xAI, and X, all have an integrated AI system. This gives him access to data, computing power, and global reach. As such, Palihapitiya said that Musk and Anthropic’s CEO, Dario Amodei, could strike a deal to capitalize on the current environment.
At the same time, Gene Munster of Deepwater Asset noted Musk’s “Sovereign AI” strategy. Munster said this allows the SpaceX CEO to operate his AI system without relying on outside firms for resources. However, private companies like OpenAI depend more on partners like Nvidia (NVDA), Broadcom (AVGO), and others, for key infrastructures like GPUs and cloud tools. He concluded that this dependency could make a big difference in who leads the AI race in the long run.
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