Same industry. Same supply chains. Completely different economics: AI Silicon.
AI chips make up 0.2% of all chips sold, but they will generate half of all chip revenue this year. The value isn’t in software; it’s in the silicon underneath.
That is the most lopsided value concentration in modern manufacturing. Fewer than 20 million chips, out of more than a trillion produced globally, are expected to account for nearly $500 billion in revenue. The semiconductor industry is about to cross $1 trillion in annual sales for the first time. AI is the reason.
The average chip sold last year cost 74 cents. The chips training AI models cost tens of thousands of dollars each.
This is the thread that connects the headlines. It is why a Google engineer was convicted of espionage for stealing training infrastructure designs, not AI models. It is why Alphabet is spending $175 billion on infrastructure this year. It is why a single plugin release wiped close to $1 trillion from software stocks in days.
The value in AI isn’t in the software. It is in the silicon underneath. And that silicon is scarce.
