Databricks CEO sees AI chip cost plummeting dramatically.

TLDR: Databricks CEO, Ali Ghodsi, predicts a major drop in AI chip prices, with prices for graphics processing units (GPUs) plummeting over the next year. This could disrupt the business models of major companies and startups that rely on these chips for artificial intelligence applications.

In a conference call with The Information subscribers, Ghodsi compared the predicted drop in GPU prices to the disappearance of internet bandwidth constraints in the 2000s. He believes that as demand for AI chips increases, the supply will also increase, leading to a decrease in prices.

This prediction has significant implications for major technology firms and app developers that currently rely on NVIDIA’s server chips for AI applications. The growing demand for these chips has created a shortage, driving up prices. However, if Ghodsi’s prediction is accurate, these companies may need to rethink their business models due to the sudden drop in chip prices.

Ghodsi is the CEO of Databricks, a company valued at $43 billion that develops software to help companies utilize AI. Databricks itself relies on AI chips for its software, so Ghodsi’s prediction may also have an impact on their operations and pricing.

Overall, Ghodsi’s prediction highlights the dynamic nature of the AI chip market and how it can impact the strategies and operations of companies in the AI industry.