Kai-Fu Lee joins me to discuss AI in 2025. Kai-Fu is a storied AI researcher, investor, inventor and entrepreneur based in Taiwan. As one of the leading AI experts based in Asia, I wanted to get his take on this particular market.

Key insights:

• Kai-Fu noted that unlike the singular “ChatGPT moment” that stunned Western audiences, the Chinese market encountered generative AI in a more “incremental and distributed” fashion.
• A particularly fascinating shift is how Chinese enterprises are adopting generative AI. Without the entrenched SaaS layers common in the US, Chinese companies are “rolling their own” solutions. This deep integration might be tougher and messier, but it encourages thorough, domain-specific implementations.
• We reflected on a structural shift in how we think about productivity software. With AI “conceptualizing” the document and the user providing strategic nudges, it’s akin to reversing the traditional creative process.
• We’re moving from a training-centric world to an inference-centric one. Models need to be cheaper, faster and less resource-intensive to run, not just to train. For instance, his team at ZeroOne.ai managed to train a top-tier model on “just” 2,000 H100 GPUs and bring inference costs down to 10 cents per million tokens—a fraction of GPT-4’s early costs.
• In 2025, Kai-Fu predicts, we’ll see fewer “demos” and more “AI-first” applications deploying text, image and video generation tools into real-world workflows.

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• Exponential View

Nathan Benaich, Founder and General Partner of Air Street Capital, joins me to discuss AI in 2025. From runaway consumer adoption to evolving enterprise moats, from still-elusive AI-driven drug breakthroughs to the renewed vigour in robotics, several core themes stood out.

1. Frontier models & AI at scale

In 2024, we witnessed the astonishing growth of frontier models and their deployment on a massive scale. OpenAI’s GPT-4 and GPT-4 o1, Anthropic’s Claude and Google’s Gemini have all demonstrated that being “at the frontier” is increasingly the price of admission.

2. Consumers, voice and infinite worlds

On the consumer side, we have reason to believe 2025 will be the year of AI-enabled workflows that feel truly natural. Voice, multimodality and integration into daily routines—like transcribing my morning thoughts during a commute—are becoming routine.

3. Accelerating science & drug discovery

While AI accelerates lab automation and data analysis—improving reproducibility and speeding up processes—the promised “AI-designed blockbuster drug” is still in the pipeline. Clinical timelines and regulatory hurdles do not compress easily.

4. Geopolitics, funding and the sovereign question

As training costs skyrocket and models require unimaginable scale, questions mount… Who funds these massive compute requirements? Will nation-states view these labs as strategic assets, akin to telecoms or chipmakers?

5. From explosive capability gains to refined utility

We’ve grown numb to what was once astonishing—perfect speech synthesis, infinite text generation, zero-shot coding. The capabilities of models now surpass human levels in many benchmarks. The next major shifts may be subtler, or simply less obviously spectacular.

Connect with us:

• Exponential View
• Nathan Benaich
   

Dylan Patel, founder of SemiAnalysis and one of my go-to experts on semiconductors and data center infrastructure joins me to discuss AI in 2025. Several key themes emerged about where AI might be headed in 2025:

1/ Big Tech’s accelerating CapEx and market adjustments
The hyperscalers are racing ahead in capital expenditure, with Microsoft’s annual outlay likely to surpass $80 billion (up from around $15 billion just five years ago). By mid-decade, total annual investments in AI-driven data centers could climb from around $150–200 billion today to $400–500 billion. While these expansions power more advanced models and services, such rapid spending raises questions for investors. Are shareholders ready for ongoing, multi-fold increases in data center build-outs?

2/ The competitive landscape and new infrastructure players
The expected explosion in AI workloads is drawing in a wave of new specialized GPU cloud providers—names like CoreWeave, Niveus, Crusoe—each gunning to become the next vital utility layer of AI compute. Unlike the hyperscalers, these players tap different pools of capital, including real-estate-like finance and private credit, enabling them to ramp up aggressively. This dynamic threatens the established order and could squeeze margins as competition heats up. The market is starting to understand that.

3/ The semiconductor supply chain isn’t the only bottleneck
We often talk about GPU shortages, but the real sticking point is broader infrastructural complexity. Yes, Nvidia and TSMC can ramp up chip supply. But even if you have enough high-end silicon, you still need power infrastructure and grid connectivity. Building multi-gigawatt data centers in the US—each the size of a utility-scale power plant—is now firmly on the agenda. In some states, data centers already consume 30% of the grid’s electricity. By 2027, AI data centers alone could account for 10% or more of total US electricity consumption, straining America’s aging infrastructure.

4/ Commoditization of models and margin pressure
A year ago, advanced language models were scarce and expensive. Today, open-source variants like Llama 3.1 are driving commoditization at speed, slicing away the profit margins of plain-vanilla model-serving. If your model doesn’t outperform the best open source, you’re forced to compete on price—and that’s a race to the bottom. Currently, only a handful of players (OpenAI and Anthropic among them) enjoy meaningful margins. As models proliferate, value will increasingly flow to those offering distinctive tools, integrating closely into enterprise workflows and locking in switching costs.

5/ Into 2025: exponential curves and new market norms
Despite these challenges—soaring costs, stalled infrastructure build-outs, margin erosion—Dylan is confident that exponential scaling will continue. The sector’s appetite for GPUs, specialized chips and next-gen data centers appears insatiable. We could easily see record-breaking fundraising rounds north of $10 billion for private AI ventures—funded by sovereign wealth funds and other capital pools that have barely scratched the surface of their capacity to invest in AI infrastructure. There’s also a very tangible productivity angle. AI coding assistants continue to reduce the cost of software development. Some software companies could be looking at 20–30% staff reductions in these technical teams as high-level coding becomes automated. This shift, still in its early days, will have profound downstream effects on the entire software ecosystem.

Find us:

• Exponential View
• SemiAnalysis

As we race towards a future powered by AI and data centres, how will the insatiable demand for energy impact the environment? With the richest companies ploughing billions into energy generation, might there be some unexpected upsides for the climate transition? And can exponential technologies address the climate crisis on a finite planet? 

Cleaning Up host Michael Liebreich sits down with Azeem Azhar, founder of Exponential View, to explore the complex relationship between exponential growth, climate change, and the societal implications of transformative technologies. Michael and Azeem delve into the promises and pitfalls of a future shaped by the rapid advancements in renewable energy, battery storage, and artificial intelligence. 

This podcast was originally published on Cleaning Up. 

Artificial Intelligence is on every business leader’s agenda. How do we make sense of the fast-moving new developments in AI over the past year? Azeem Azhar returns to bring clarity to leaders who face a complicated information landscape.

This week, Azeem speaks with Richard Socher, CEO and founder of You.com, an AI chatbot search engine at the forefront of truthful and verifiable AI. They explore approaches to building AI systems that are both truthful and verifiable. The conversation sheds light on the critical breakthroughs in AI, the technical challenges of ensuring AI’s reliability, and Socher’s vision for the future of search.

They also discuss:

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As 2024 begins, leaders are facing increasing uncertainty and a host of difficult decisions. Azeem Azhar returns to bring clarity amid a complicated information landscape, with his analysis of 12 core themes that will shape the year ahead, including AI adoption, geopolitics, decentralization, the energy transition, and more.

The discussion specifically touches on:

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Artificial Intelligence is on every business leader’s agenda. How do we make sense of the fast-moving new developments in AI over the past year? Azeem Azhar returns to bring clarity to leaders who face a complicated information landscape.

Generative AI has a lot to offer health care professionals and medical scientists. This week, Azeem speaks with renowned cardiologist, scientist, and author Eric Topol about the change he’s observed among his colleagues in the last two years, as generative AI developments have accelerated in medicine.

They discuss:

@azeem

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Artificial Intelligence is on every business leader’s agenda. How do we make sense of the fast-moving new developments in AI over the past year? Azeem Azhar returns to bring clarity to leaders who face a complicated information landscape.

This week, Azeem joins Sasha Luccioni, an AI researcher and climate lead at Hugging Face, to shed light on the environmental footprint and other immediate impacts of AI, and how they compare to more long-term challenges.

They cover:

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Artificial Intelligence is on every business leader’s agenda. How do we make sense of the fast-moving new developments in AI over the past year? Azeem Azhar returns to bring clarity to leaders who face a complicated information landscape.

This week, Azeem joins Alex Kendall, co-founder and CEO of autonomous driving start-up Wayve, to uncover how the AI revolution is enabling new strides in self-driving. They delve into the implications of these advancements for urban mobility and the transformation of cities in the future.

They discuss:

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Artificial Intelligence is on every business leader’s agenda. How do we make sense of the fast-moving new developments in AI over the past year? Azeem Azhar returns to bring clarity to leaders who face a complicated information landscape.

Organizations across the world have been grappling with the opportunities and challenges of generative AI. This week, Azeem joins AI pioneer and entrepreneur Andrew Ng to discuss the intricacies of this moment and debate whether we’re at an inflection point in the AI revolution.

They consider:

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