The article argues that capital, not power or memory chips, may be the biggest bottleneck for AI data centers, citing the CEOs of Broadcom and Intel. Alphabet reported negative free cash flow for the first time as a public company last quarter, and Amazon's trailing-12-month free cash flow turned negative after a $66.1 billion rise in capital expenditure. Neoclouds and leading AI labs, which lack other revenue sources, face the toughest funding pressure. Custom XPU chips are presented as a way to cut costs: Amazon's CEO said its Trainium chips could save tens of billions of dollars in capex each year, and Google said the payback period on its TPU servers is half that of an average server. The author expects XPU makers such as Broadcom and Marvell to be major beneficiaries.
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