The new rules of the AI war?
From Nvidia's chips to server farms in space
Has the equation in the technology market changed?
If until today we thought software was king, Gavin Baker – one of the most interesting voices in the stock market – laid his cards on the table!
Meet the 'monster hunter' – the man who identified Nvidia and Tesla when they were still small
If there's anyone on Wall Street who likes to try and analyze where the future is headed, it's Gavin Baker.
He is considered one of the most brilliant and respected people in global technology today.
How did he gain his reputation and popularity?
Because of a record of phenomenal returns
Baker built his reputation as the superstar of investment giant Fidelity.
When he managed the legendary OTC fund there, he made moves that seemed risky at the time but now appear brilliant – early and heavy bets on Tesla, Nvidia, and Apple, just before they became the powerhouses they are today.
Today he is the founder and CIO of the hedge fund Atreides.
His strategy is unique and called 'Crossover investments' – Baker doesn't limit himself – he attacks on all fronts, both public companies on the stock exchange and private startups in advanced stages.
The method: 'First principles'
Baker doesn't get carried away by momentary hype or simple technical charts; he analyzes technology in depth, breaks it down into its components, and tries to logically understand where the world will be in 5 to 10 years.
When Baker talks about technology,
He isn't looking for tomorrow morning's trend – he's looking for who will build the reality of the next decade.
And he has a lot to say
According to him, we are returning to physics and economics.
Here is the exclusive summary of his remarks:
Economics dictates strategy – scaling laws are back in a big way.
The game right now isn't about who is the smartest, but who is the most efficient.
The new rule?
'The winner is the one who produces tokens at the lowest cost.'
The gap between leading and lagging companies is in execution – a company that knows how to utilize 90% of its GPU clusters will beat one that only utilizes 30%.
This is an abysmal profitability gap.
End of the traditional SaaS era?
Baker has a grim forecast for old software companies:
AI agents are about to shake things up.
Companies that are 'AI-native' will provide services with lower profitability (around 40%), which could crush existing business models in the SaaS market.
The four physical barriers – AI's enemy is not code, but the physical world:
1. Electricity: The final frontier. No electricity = no processing.
2. TSMC's monopoly: The fear of oversupply causes hesitation in expanding factories, creating a production bottleneck.
3. Memory (DRAM): A shortage here could cause prices to jump tenfold.
4. Edge AI: Lean models on devices (like Apple's) threaten to erode cloud dominance.
Is Nvidia running away from Google? Baker claims Nvidia's pace is dizzying; it releases new products every year, which prevents companies like Google, trying to develop internal chips, from catching up.
And what about the future?
According to Baker, the future is...
How could you not guess – in space
It sounds like science fiction, but the economic logic is too strong:
Baker argues that data centers in space are the ultimate solution:
1. Energy: Sun available 24/7, six times stronger than on Earth.
2. Cooling: The biggest problem for servers is solved for free (space is frozen).
3. Speed: A laser in empty space is faster than light in an optical fiber. The network in space will be faster than the terrestrial internet.
The bottom line and summary of Baker's remarks – the war is shifting from code to infrastructure, energy, and efficiency.
According to Baker – whoever controls physics will control the market.