Gavin Baker on Orbital Compute, TSMC, and Frontier Models

The AI revolution represents the most extraordinary moment in the history of capitalism, characterized by unprecedented growth rates in companies like Anthropic that dwarf historical SaaS benchmarks. The current infrastructure build-out, centered on the critical "watts and wafers" bottleneck, is being managed by Taiwan Semiconductor to prevent a speculative bubble. While frontier AI models currently capture the majority of economic value, the industry is shifting from all-you-can-eat pricing to usage-based models, fueling massive revenue expansion. Innovations like orbital compute and wafer-scale architectures are emerging to address compute demand, though the "bitter lesson"—where raw compute consistently outperforms human algorithmic ingenuity—remains the primary risk for investors. Geopolitically, AI dominance is becoming a cornerstone of national competitiveness, with the US leveraging energy independence and technological leadership to navigate an increasingly high-variance global environment. Investor Gavin Baker provides this analysis, emphasizing the necessity of mastering new AI tools to maintain a competitive edge.