Phillipe Laffont founder and CEO of Coatue Management is known as a strong supporter of the current AI revolution. He participated in this year’s Bloomberg Investment Summit where he pointed out that he saw the potential in AI before it became a thing.
Laffont made its first AI-related investments ten years ago while the industry was in the making. Now, as the hype rises, he argues that AI is another bubble that often pops out in the market. In AI Laffont sees real power to make a difference for all the industry sectors.
What Laffont pointed out in the webinar he held for the investors in April 2024 is that the AI implementation will be conducted in four phases:
- AI core infrastructure: it will focus on the development and implementation of powerful GPUs, strong data centers, advanced cloud technologies, and power supplies.
- Edge AI: The focus will be moved to the implementation of AI into personal computers and mobile phones
- AI Applications: the use of AI in other roles, like AI Personal Assistants, Co-Pilots, Autonomous Agents, and AI Customer Service Agents.
- Physical AI: this is the final phase when AI will be used in the most complex roles and operations including self-driving, the development of Humanoids, Robotic Surgery, and AI drug discovery.
This wide potential application of AI is the winning factor for Laffont, and why he believes that AI is not one bubble in the series of bubbles from the past.
Penetration Levels Of AI Tech Is Still Low
Laffont points out that the amount of capital that may seem to be pumped into AI is massive, but it is still not showing major results in the implementation of AI. The first phase of AI core infrastructure is only showing glimpses of its potential.
GPU servers that are used for AI are at rates of 9%, while their semi-market revenue tied to AI is at 10%. The massive amounts of power that AI demands are still not showing. Only 2% of US power demand comes from AI data centers.
AI-backed cloud technology revenues made by Amazon and Microsoft are at 3%. These are not the only companies utilizing these technologies but are the largest players.
The second phase of implementation is very limited so far. Both PC and smartphone AI penetration is low, while it is yet to be seen from Apple.
The third phase which includes wider implementation of AI is still without any major breakthroughs. Revenue from AI software is still almost non-existent, while AI customer service agents are still in testing.
