00:00 Speaker A
Busy day for deal making in the AI space. Open AI adding to its list of circular deals. The chat GPT maker now taking an ownership stake in Thrive Holdings, which is a company that was launched by one of Open AI’s investors. Open AI also striking a deal to be one of Accenture’s primary AI partners. And Nvidia also pulling its weight in AI deals, announcing Monday that it’s invested $2 billion in synopsis.
00:27 Speaker A
So, as the AI train chugs along, we’re taking a look at where the deal making and investments could lead to with Bloomberg intelligence senior semiconductor analyst, Kunjan Shabanini. And Kunjan, we talk a lot about whether or not we’re in an AI bubble, valuation, one part of that story, but also the circular investments that we were just discussing. So, how do you view that? Is that just the way these things have to go for now or or does that concern you at all when we look at the uh the the the vitality, I guess you could say of the continuation of AI?
01:07 Kunjan Shahani
Well, so far when we look at fundamentals in 2026 with hyper scalar capex projection to top half a trillion dollars. And remember, these are the customers which have surplus balance sheet cash. So there is no concern around them being able to spend this money or not. The fundamental view suggests there is no slowdown in demand and spending for AI chips, especially when it comes to the GPU and AI ASIC chips, at least in 2026 and the visibility into first half 2027.
01:42 Kunjan Shahani
A few key items we want to highlight for 2026. We again think Nvidia will likely stay dominant wallet share taker of this spending, but second half 2026 will be key inflection point for other players. One, AMD, this is when their first server rack level solutions will start ramping in data centers. And along with that, we are expecting to see significant AI-based accelerator deployments in second half 26 from both Google and AWS. And this is the first time for external customers. So a lot of eyes will be focused on these ramps.
02:11 Speaker A
And it’s interesting that you talk about sort of the different uh paths that these various companies could take because even looking at the Mac 7 players right now, there is clear dispersion. They’re not necessarily moving in lock step anymore. So, what does that signal about where we are in this current where we are in this current AI cycle?
02:29 Kunjan Shahani
Yeah, it’s just there are more vectors driving the spend now. You have your sort of the Mac 7 or the largest hyperscale consume uh cloud service providers, which have a very significant and validated uh demand and spending capabilities. And then you have these new emerging hyperscalars, the one like Open AI, right? So a lot of concerns around this revolving financing or recycling revenue and deals are coming from that emergent portion of the hyper scalar, which again is becoming large, so it will be a significant impact.
03:02 Kunjan Shahani
But that impact if happens to show up will not be at least in the next year and a year and a half. So it’s a more outward pushed concern at this point.
