Thoughts on AI compute supply and demand into Q4
Been watching the AI chip space closely, and it feels like we're heading into a fascinating bottleneck. There's a lot of talk about the big players securing their supply, but I'm thinking about the second and third-tier AI companies, the startups, and even research labs. The demand for advanced compute capacity, especially for training larger models and scaling existing ones, isn't slowing down.
My gut says there's a 70% chance we see a significant uptick in prices for cloud-based GPU instances from smaller providers by the end of Q3, bleeding into Q4. The current lead times for direct hardware purchases are still extended, and that pushes more demand into the rental market. If we see another major foundational model release that requires substantial re-training or fine-tuning, that 70% probability could easily climb higher.
The squeeze on smaller players is already visible; many are paying astronomical prices for cloud access or simply being locked out of the best GPUs. It's not just a Q4 issue, it's the new normal for the foreseeable future unless manufacturing scales up dramatically. Only the biggest or most funded will truly compete.