Where does your AI live? I've actually visited their home.

Where does your AI live? I've actually visited their home.

I visited OpenColo, a newer colocation center in Santa Clara, where tech & AI startups host their servers.

A common AI setup includes 128 H100 Nvidia chips in a full rack. When you add storage, switches, power, cooling, and more, a full rack for an AI startup is estimated at $1.25M, excluding operating costs.

I've seen some Nvidia chips selling for $20-40k on eBay, and I was informed that some specialty chips can sell for $100K-$200k. Wow!

Impacts up the stack:

1. Due to this shortage in the supply chain, many AI app startups are starting with cloud services providers.

2. Some of the dominant foundational models already have access to their own chips.

3. Foundational model (FM) Inflection AI has 22k Nvidia chips, as Nvidia is their investor, and I assume OpenAI likely has plenty of access to Azure.

Silicon Valley Fun Facts:

• The full stack is also represented geographically, from infra to app layer, south to north in the bay area

• The South Bay houses chip companies, enterprise, and web hosting.

• As you move north to the peninsula, you run into hyperscalers, database, and CRM companies.

• Then, in SF, you meet app layer and app startups.

• PS: if you think those facts were fun, we can be friends.

At the start of my career I was in web hosting, telecom, data storage, my wide set of tech experiences helps me to see the bigger picture as an investor and founder.

Thank you, Martin Bach, Bill Barry, for the intro to OpenColo, our host.