As chip manufacturers like NVIDIA release new hardware, inference providers like Base10 absorb the complexity and engineering effort required to optimize AI models for the new chips. This service is a key value proposition, saving customers from the challenging process of re-optimizing workloads for new hardware.

The Rubin family of chips is sold as a complete "system as a rack," meaning customers can't just swap out old GPUs. This technical requirement creates a forced, expensive upgrade cycle for cloud providers, compelling them to invest heavily in entirely new rack systems to stay competitive.

OpenAI's strategy to lease rather than buy NVIDIA GPUs is presented as a shrewd financial move. Given the rapid pace of innovation, the future economic value of today's chips is uncertain. Leasing transfers the risk of holding depreciating or obsolete assets to the hardware provider, maintaining capital flexibility.

NVIDIA’s business model relies on planned obsolescence. Its AI chips become obsolete every 2-3 years as new versions are released, forcing Big Tech customers into a constant, multi-billion dollar upgrade cycle for what are effectively "perishable" assets.

GoAbacus decentralizes the cost of AI model training by utilizing its deployed customer hardware during off-hours. With customer consent (often incentivized by a discount), they perform batch training on local data and aggregate only the resulting model weights, not the sensitive underlying content.

The AI landscape is uniquely challenging due to the rapid depreciation of both models (new ones top leaderboards weekly) and hardware (Nvidia launched three new SKUs in one year). This creates a constant, complex management burden, justifying the need for platforms that abstract away these choices.

To keep pace with rapid AI advancements, the company intentionally operates on a two-year horizon for its technology stack. This forces them to be dynamic and adapt to new research, rather than getting locked into outdated architectures, having completed four such evolutions so far.

Unlike railroads or telecom, where infrastructure lasts for decades, the core of AI infrastructure—semiconductor chips—becomes obsolete every 3-4 years. This creates a cycle of massive, recurring capital expenditure to maintain data centers, fundamentally changing the long-term ROI calculation for the AI arms race.

Building on-premise GPU infrastructure for biotech AI is a capital trap. The hardware becomes redundant within five years, turning a multi-million dollar investment into a sunk cost. Cloud providers offer necessary "burst capacity" for intensive workloads without the long-term capital risk, maintenance burden, and inflexibility.