Big Companies Muscle Around with Balance Sheets in AI

Big companies are leveraging their balance sheets to influence AI investments rather than focusing on shipping profitable products. The current AI landscape is dominated by toy apps and proofs of concept rather than large-scale production systems. The demand is being driven by big players with substantial financial resources, enabling them to pre-purchase from companies like Nvidia. However, historically, innovative breakthroughs and significant profits have come from smaller, more resourceful companies. While Nvidia may see revenue growth for the next few years, the ultimate value in AI may shift towards the application layer. Comparisons are drawn with Cisco's experience in the past, where despite revenue growth, the market valuation shifted towards companies like Netflix, Google, and Facebook due to their innovative approaches and user engagement.