A new algorithm processes AI memory at eight times the efficiency. Don heard it and called it immediately. Another DeepSeek moment. Here is the question nobody is asking.
| | Google just did it again. | This week Google published research showing their new algorithm processes AI memory at eight times the efficiency of current methods. Eight times the output. Same hardware. | I heard it and said it immediately. That is another DeepSeek moment. | Here is the background for anyone who missed DeepSeek a year ago. A Chinese AI lab built a model that matched the performance of the best American AI at a fraction of the compute cost. | Overnight, the assumption behind the entire AI infrastructure buildout got called into question. Nvidia dropped 17% in a single session. The market asked a question it had not asked before. What if you do not need all that hardware? | Google just asked the same question about memory. | Here is why it matters. There are plans right now for more than five trillion dollars of server farm construction in the United States. Five trillion. | Data centers being built on converted farmland. Hyperscalers, meaning the major cloud companies like Amazon, Microsoft, and Google, are racing to see who can build the most infrastructure the fastest. | The entire AI trade is built on one assumption. We are going to need an almost infinite amount of compute and memory forever. | Google's algorithm just took a chisel to that assumption. | The bull case says efficiency gains drive more demand. Make it cheaper and people use more of it. That has been historically true in technology. But there is a limit. And the direction of travel is clear. | AI is getting smaller, faster, and cheaper every year. | Here is where this ends. Eventually you are running your own AI engine in the palm of your hand. No server farm required. No water cooling. No gallon of water every time you generate a video. | That water use is real, by the way. Every time you run one of those AI video generators, you are burning roughly a gallon of water just to cool the servers. That is what five trillion dollars of infrastructure actually costs. | The person who builds the server farm makes money. They always do. Construction companies, contractors, equipment suppliers. They get paid regardless. The question is whether the person who owns the server farm in ten years makes money. | That is a very different question. And almost nobody is asking it right now. | A year ago nobody was asking it about compute either. Then DeepSeek happened. | The next time someone tells you AI demand is a straight line up forever, ask them what Google did this week. The question is not whether this efficiency trend continues. It will. | The question is whether you are positioned for what comes after the five-trillion-dollar bet. | In a market this volatile, the way I trade AI names is through defined risk. Zero DTE options are my weapon of choice right now. | I do not predict where the stock goes. I define what I am willing to lose if I am wrong. That is the only rational way to trade a sector that can gap 17% on a single headline. | Come see how I build those trades here. | To your success, | Don Kaufman | |
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