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The 75B AI Bet 🟢

Amazon's massive cloud expansion reflects surging demand for AI capabilities, with a planned capital expenditure of $75 billion for 2024.

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The Bagel team just published new research on two complementary methods for advancing AI reasoning: training-time and inference-time techniques.

Training-Time Enhancements involve refining model structures. Methods like Parameters Efficient Fine-Tuning (PEFT) optimize learning efficiency by targeting specific neural pathways within fixed frameworks, while approaches like WizardMath’s 3-step reasoning improve structured reasoning.

Inference-Time Enhancements focus on on-the-fly thinking, using Chain of Thought prompting to activate logical processing without extra training. Techniques like Self-Consistency for validation and Program of Thought for coding tasks enable precise, stepwise reasoning.

The findings suggest combining both approaches: training-time builds foundational reasoning, while inference-time optimizes its application. Bagel Network supports this advancement through open-source infrastructure, empowering a community-driven AI evolution though monetizable open source AI.

About Bagel: Bagel is an AI & cryptography research lab, building the world's first monetization layer for open-source AI.

What’s happening in AI right now

Big tech's $75B bet shows true cost of AI infrastructure

Amazon's massive cloud expansion reflects surging demand for AI capabilities, with a planned capital expenditure of $75 billion for 2024 - with even higher amounts projected for 2025. This spending, primarily to support AWS's growing AI services, comes amid broader shifts in the computing landscape.

A shifting computing landscape

A historic milestone emerged this week as AMD overtook Intel in datacenter CPU revenue for the first time, with $3.549 billion in Q3 compared to Intel's $3.3 billion. This changing of the guard in traditional computing comes as Nvidia continues to dominate the broader datacenter market with GPU sales of $22.604 billion in Q2 FY2025 - far exceeding AMD and Intel's combined sales.

These numbers tell a deeper story about how AI is reshaping the computing landscape. The traditional CPU market, long dominated by Intel, is being disrupted not just by AMD's superior price-performance ratio but by the growing importance of specialized AI chips.

The hidden costs of progress

This infrastructure build-out carries significant implications beyond balance sheets. Communities across the United States are beginning to feel the impact through rising electricity bills, as power-hungry AI data centers strain local grids. This creates a complex tension between technological progress and community interests.

Meta's recent partnership with Lumen Technologies to expand network capacity highlights another crucial aspect of the AI infrastructure race - the need for robust data transmission capabilities to support increasingly complex AI workloads.

Edge computing: the next frontier

While major tech companies pour billions into centralized computing infrastructure, edge intelligence is emerging as a crucial trend. This approach moves AI processing closer to where data is generated, offering benefits in latency, autonomy, and resilience. Organizations must now carefully balance centralized and edge computing strategies, considering factors like data privacy, security requirements, and cost-performance trade-offs.

Looking ahead

The massive infrastructure investments we're seeing today will shape the competitive landscape for years to come. Companies that fail to secure adequate computing resources risk falling behind, while those that over-invest face significant financial risk if AI demand doesn't meet expectations.

For now, one thing is clear: the AI arms race is as much about infrastructure as it is about algorithms. The question is whether this unprecedented build-out will lead to a sustainable competitive advantage.

We publish daily research, playbooks, and deep industry data breakdowns. Learn More Here

This week on the podcast

Can’t get enough of our newsletter? Check out our podcast Future-Proof.

In this episode, the hosts Anthony Batt and Shane Robinson with guest Joe Veroneau from Conveyor discuss outsmarting paperwork. Conveyor is a company that helps automate security reviews and document sharing between companies. They use AI technology, specifically language models, to automate the process of filling out security questionnaires. This saves customers a significant amount of time and improves the quality of their responses.

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