Source: Sneakerheadvc
Jensen Huang's layered model of the AI economy (energy, chips, infrastructure, models, applications) is a margin-defense strategy, not a neutral taxonomy. By positioning chips as the load-bearing middle layer, NVIDIA converts its current manufacturing dominance into structural inevitability—regardless of who wins at the applications layer, the company extracts rent from the stack. The test is whether this architecture holds as training costs plateau, open-source models erode model-layer margins, and hyperscalers begin vertical integration to recapture value that Huang's framing suggests they must cede to semiconductor makers.