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OpenAI’s $38 Billion Power Play: Diversifying the AI Supply Chain · Connecting the Dots

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  Today's tech news moves fast, but understanding
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  it shouldn't be hard. That's why Snarful Solutions
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  Group brings you Connecting the Dots, where we
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  break down what's happening in tech and why it
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  matters to you. Now, let's dive in with your
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  hosts. Hello and welcome to Connecting the Dots.
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  It's Monday, November 3rd, 2025, and we're coming
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  to you live from Sacramento, California. Great
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  to be here. Let's connect some dots today. Absolutely.
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  First up, our quick morning check -in. Here in
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  Sacramento, it's looking like another beautiful
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  day. Sunny skies, high around 73 degrees Fahrenheit.
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  Pretty nice for early November. Wish I could
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  say the same everywhere. Nationally, it's a bit
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  more dramatic. There's a cold front barreling
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  through the Great Lakes and the Northeast. So
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  expect some chill there. OK. And out west, closer
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  to us, but more north. the Pacific Northwest,
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  Washington, Oregon, even Northern California,
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  and this here in Nevada, they're bracing for
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  a pretty strong atmospheric river midweek. So
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  yeah, lots happening. Definitely a tale of two
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  coasts there. All right, let's look at the markets
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  quickly. Things are a little shaky today, but
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  let's try to stay optimistic, right? Always.
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  What are we seeing? The Dow Jones is down about
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  172 points. That's roughly 0 .36%. But looking
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  weakly, it's actually up slightly, about a quarter
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  per count. So not panic stations yet. No, not
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  at all. S &P 500 is pretty similar, down about
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  19 points today, or 0 .28%, but also slightly
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  up 0 .26 % for the week. Bitcoin, though, that's
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  where the bigger volatility is. It dropped significantly
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  today over $3 ,000, which is almost 3%. Yeah,
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  and its weekly change is down nearly 6%. So,
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  you know, something to keep an eye on, especially
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  when we talk about big tech investments. Definitely
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  relevant context. Now, before we dive into today's
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  main topic, we really want to thank our sponsor,
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  .com. You won't regret it. All right, let's get
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  into it. Today's Morningstar report is buzzing
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  about one thing, OpenAI. Yeah, it's all about
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  their massive push for computing power. The scale
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  is just mind boggling. It really is. We're seeing
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  a huge infrastructure building spray. So story
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  number one, OpenAI is cozying up with Amazon
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  Web Services. or AWS. Right, and this is a big
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  deal because historically OpenAI has been almost
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  exclusively tied to Microsoft Azure, wasn't it?
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  Microsoft poured billions in. Exactly, that exclusivity
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  seems to be over. The report details a staggering
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  $38 billion deal for OpenAI to buy compute capacity
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  from AWS over several years. $38 billion? With
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  AWS, wow. What does that signal? Well, it's their
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  first contract with AWS, the cloud market leader.
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  It signals, I think, a major step towards operational
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  independence. They're still using Azure. Mind
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  you, Microsoft has a massive $250 billion service
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  line open for them. Okay, so not abandoning Microsoft,
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  but hedging their bets. Diversifying. Precisely.
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  It shows operational maturity. They'll start
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  running workloads on AWS immediately using hundreds
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  of thousands of NVIDIA GPUs that AWS is providing
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  as completely separate capacity. Interesting
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  phrasing. It is. And, you know, CEO Sam Altman
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  and CFO Sarah Fryer have hinted about a possible
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  IPO. This kind of move securing independent infrastructure
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  certainly looks like prep for that, demonstrating
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  they aren't reliant on just one provider. Makes
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  sense. But isn't it a bit awkward? I mean, AWS
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  has invested billions in Anthropic, OpenAI's
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  big rival. That's the really interesting nuance.
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  Yes, they have. But this deal is huge for Amazon's
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  AWS growth, especially while Microsoft and Google
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  are showing faster cloud expansion rates overall.
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  It seems the demand for AI compute is so intense
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  right now, it trumps even those existing competitive
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  ties. Capacity is king. Capacity is king. OK,
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  that leads perfectly into our second story. The
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  chip wars are heating up. OpenAI isn't just diversifying
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  clouds, they're diversifying chip suppliers too,
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  right? With AMD. Oh yeah, big time. OpenAI announced
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  a massive partnership with AMD. We're talking
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  over 95 billion dollars. 95 billion? Good grief.
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  What are they getting for that? They're securing
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  six gigawatts of computing power over several
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  years. This is a huge boost for AMD, which, let's
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  be honest, has been trailing way behind NVIDIA
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  in the AI GPU market. NVIDIA has, like, 90 %
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  market share. Still! Wow, so AMD must be thrilled.
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  Absolutely. OpenAI will be using AMD's upcoming
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  Instinct MI450 chips, which aren't even due until
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  the second half of 2026. So they're logging this
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  in well in advance. And there's more to it than
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  just buying chips, isn't there? Something about
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  stock? Right. This is key. OpenAI secured a warrant,
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  basically, an option to buy up to 10 % of AMD's
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  common stock. That's around 160 million shares.
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  Whoa. Yeah. And crucially, their ability to actually
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  buy those shares depends on hitting certain targets,
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  deployment targets for that compute power and
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  AMD share price targets. So OpenAI basically
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  gets the stake in AMD's success if they successfully
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  use AMD's chips at scale. Exactly. It ties their
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  fates together. No wonder AMD shares jumped,
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  what, almost 25 % on the news? Yeah, nearly 25%.
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  Crazy. But let's be clear, this isn't about replacing
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  NVIDIA, is it? They still have that massive $100
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  billion deal with NVIDIA. No, definitely not
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  replacing them. Every analyst perspective we
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  saw basically says the whole AI world is just
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  desperate for more compute. This is about survival
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  and growth. They need chips from... Everyone.
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  It highlights the urgent need for a multi -vendor
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  supply chain because the demand is just outstripping
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  supply. Desperate for compute. That really sets
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  the stage for our third story, which tries to
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  quantify this desperation in terms of, well,
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  actual power. Yeah, the sheer scale. If you add
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  up the AMD deal 6 gigawatts plus the existing
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  Nvidia stuff, plus another new partnership with
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  Broadcom for custom chips, OpenAI is locking
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  in compute resources, twirling at least 10 gigawatts,
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  10 GW. OK, wait. 10 gigawatts. Help me understand
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  that number. What does that actually mean? Hard
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  to grasp. 10 gigawatts is enough electricity
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  to power a large city. Or, put another way, about
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  8 million average US households. 8 million homes
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  just for OpenAI's operations. That's the trajectory.
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  We're talking about AI becoming a massive consumer
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  of national energy resources. It's almost a geopolitical
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  factor at this point. That's staggering. Why
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  such an exponential leap? Is it just inefficient
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  models or what? It's largely driven by the increasing
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  complexity of the AI models themselves. You know,
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  chat GPT now has something like 800 million weekly
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  users, which is huge. But the next generation,
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  things like Sora 2 for video generation, generating
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  realistic video is orders of magnitude more power
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  intensive than just processing text queries.
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  And these newer models are apparently growing
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  even faster in usage. So more users doing much
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  more complex tasks, that requires way more power.
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  Exactly. And this brings up those broader concerns
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  you hear about AI's environmental footprint.
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  The data center is needed for all this. Projections
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  show they could consume up to 12 % of total U
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  .S. electricity by 2028. 12 % up from what, about
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  4 .4 % in 2023? That's right. It's a huge jump.
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  And it explains why OpenAI is also doing deals
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  like the one with Brycom. They're trying to create
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  custom chips, specialized hardware. To be more
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  efficient. Partly, yes. To embed their model
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  knowledge directly into the silicon optimized
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  performance. But it's also, you know, maybe a
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  scramble to manage this colossal energy demand
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  before the power grid itself becomes the limiting
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  factor. A race against the grid. Wow. Okay, that
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  is a lot to process. Before we wrap up, let's
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  That's S -K -O -N -I dot dot com. Okay, so let's
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  quickly recap the big takeaways from today's
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  report on OpenAI's compute frenzy. Let's do it.
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  First, that huge $38 billion AWS steal. It shows
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  OpenAI diversifying away from just Microsoft
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  Azure, signaling operational maturity, and maybe
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  paving the way for an IPO. Right. Independence
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  is key there. Second, the massive $95 billion
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  AMD partnership, complete with that stock warrant.
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  It's not about replacing Nvidia, but highlights
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  just how desperate the entire field is for more
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  chip suppliers. And finally, the sheer scale
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  of power needed. We're talking 10 gigawatts,
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  enough for a city or 8 million homes, driven
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  by models like Sora 2. This raises huge questions
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  about energy consumption and the environment,
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  pushing companies towards custom hardware solutions.
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  So if one company needs the power of 8 million
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  homes just for its AI, maybe the biggest question
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  isn't just who builds the best AI, but how we're
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  possibly going to power it all without everything
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  else going dark. Something to chew on. Definitely
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  food for thought. We're here to help at Snarful,
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  so reach out on our website if you have any more
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  questions. That's a wrap on today's top stories.
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  Remember, tech doesn't have to be complicated,
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  and we're here to help connect the dots. If you've
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  got questions or want to learn more, visit us
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  at snarful .com. Thanks for listening, and we'll
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  catch you next time.