Thought Banana
The Chips Are On the Table
For Meta, that is. Following in the footsteps of its 4.3x more valuable rival and mortal enemy Apple in its decision to design its very own computer chips for artificial intelligence and data center purchases.
Obviously, Zuck had to make a super cringey Instagram post about it, but no word yet on if he did the same on Facebook (we’re team Gen Z, sorry).
Still, this is a huge step for Meta. When Zuck was coding “The Facebook” in his dorm room in order to more efficiently rate how hot people are, I doubt the kid ever once considered he’d someday be building his very chips. But, in the Year of Efficiency Meta has instituted across silicon valley, investors were vibing with it and sent shares up 1.8%.
In their announcement, Meta pointed to the fact that there simply were no available, on-the-market chips that could handle the 4 billion (and growing) videos per day within the energy usage requirements the firm was targeting. Basically, Zuck said, “Fine, I’ll do it myself.”
Don’t worry, though. Along with another in-house chip line designed for “inference” or use by already-trained AI models to make predictions, Meta will, in fact, power the metaverse with its very own chips soon enough.
Essentially, Zuck wanted to make sure investors knew they weren’t that far behind competitors like Google and OpenAI in the AI arms race. The hardware announcements came with positive updates to Meta’s all-new supercomputer, the Research SuperCluster, made up of over 16,000 GPUs for the firm’s 65bn-parameter LLM, LLaMA 65B, which is still reportedly much smaller than Google’s 340bn-parameter PaLM 2.
The Year of Efficiency may as well be called the Year of Resiliency as Meta proves it can weather a macro storm while still taking big steps towards what investors so far see as the right direction. I guess $20bn in free cash flow will do that.
The big question: How will the in-housing of computer chips change Meta’s position in the AI / big tech competitive set? Will this bet pay off, or do we have another metaverse (so far) and Reality Labs-style investment here?
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