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Invest Like the Best · May 20, 2026 · 1h 16m

Gavin Baker - Watts and Wafers - [Invest Like the Best, EP.473]

Gavin Baker
Show Notes

Gavin Baker returns for his sixth conversation, focusing on the two physical constraints shaping the future of AI: energy supply (watts) and semiconductor fabrication capacity (wafers). He argues that near-term power shortages will ease by 2028, with orbital compute as a longer-term solution, and that TSMC's capacity decisions are the key variable for the industry. The discussion also covers Elon Musk's Terrafab, the disaggregation of GPUs, the rise of new chip companies, and the open question of where AI's economic value will accrue.

This summary was generated from show notes and public descriptions, not from a full transcript review. Details may contain inaccuracies.

Highlights

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Power as the primary bottleneck for AI scaling
Baker identifies power supply for data centers as the most immediate physical constraint on AI growth.
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TSMC's wafer capacity as the critical variable for AI hardware
Baker argues that advanced chip fabrication capacity, particularly at TSMC, is the single most important variable for AI hardware supply.
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Elon Musk's Terrafab concept
Baker discussed the Terrafab concept, an ambitious approach to semiconductor fabrication led by Elon Musk.
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Disaggregation of GPUs into separate components
Baker describes a trend where GPUs are broken into discrete compute, memory, and networking elements.
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Uncertainty over where AI's economic value will accrue
Baker questions whether frontier AI models will capture the majority of the economic value generated by AI.
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