Legendary analyst and former Morgan Stanley Managing Director Mary Meeker has produced her first trends report since 2019, and it doesn't disappoint. The 340-page dive into AI portrays an industry expanding at a historic pace, with massive infrastructure investments and explosive user growth—yet founded on monetization models that remain largely unproven.
- Off to the races: In the report, Meeker and her team at Bond Capital paint a picture of AI adoption moving at breakneck speed. ChatGPT, for example, rocketed to 800 million weekly users in a mere 17 months—for context, it took a streaming giant like Netflix over a decade to reach 100 million subscribers. This isn't just initial buzz; daily usage has surged 202%, with 90% of adopters residing outside North America.
- Building the beast: A colossal infrastructure build-out fuels this expansion, with Big Tech pouring over $200 billion into AI systems in 2024 alone. NVIDIA now commands a staggering 25% of global data facility CapEx. The environmental footprint is also growing, as these AI facilities already consume 1.5% of global electricity, with demand swelling by 12% annually.
- Cost-curve contortions: While training sophisticated AI models carries a hefty price tag—often $100 million or more—the actual cost to use them (via inference) has nosedived by a stunning 99.7% in just two years. This dramatic reduction is flinging open the doors for a Cambrian explosion of AI-powered applications across enterprises, with companies like Abridge in healthcare and Harvey in legal tech seeing ARR skyrocket in months, not years.
- The billion-dollar question: Despite AI's transformative speed and deep enterprise integration, from coding assistants to autonomous vehicles, Meeker’s findings underscore a critical hurdle: sustainable business models are still largely speculative. As SaaStr Founder Jason Lemkin wrote in his summary of the report, for many AI ventures, monetization is "still completely broken," with giants like OpenAI reportedly burning through over a billion dollars annually.
Meanwhile in AI: OpenAI is expanding its Stargate platform to the UAE, as part of a global push for sovereign AI capabilities, a deal potentially worth up to $20 billion. Google I/O showcased its Gemini 2.5 Pro's "Deep Think" and a suite of consumer-focused AI tools, highlighting a different strategy than Microsoft’s enterprise-centric approach with Copilot Tuning. Both tech giants are also wooing developers, with Microsoft open-sourcing parts of its Windows Subsystem for Linux and Google offering generous API credits for its Gemini models.
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