Half the Dollar Is Chips

A chart from Andreessen Horowitz follows one illustrative dollar of AI build spending across the supply chain. The estimates come from BNP Paribas, and the source says the split is high level and can move when costs and supply move. A width on the chart is a sketch of that dollar, not a forecast and not a weight for your book.

01 Half the dollar is chips

Chips take half of that dollar, and inside that half the accelerator is the largest line. It is about half of the chip dollar and about a quarter of the whole. Memory is the next line, smaller than the accelerator and larger than the rest of the server. The rest of the server is the ordinary processors and the work of building the machine, about a tenth of the whole dollar.

02 Power is the next claim

After chips, power is the next large claim, about a fifth of the dollar. Half of that power dollar is the grid hookup and generation you arrange yourself, not the box sitting in the hall. Power distribution inside the site is about a third of the power dollar, and the on site routing is a thinner slice of that same power dollar.

03 Links are smaller than power

Networking is a smaller claim than power, and it is still a real share of the dollar. Inside the links, the optical line is the largest, a bit larger than the switch that sits beside it. Processors for the network are a thinner slice of that same link dollar, and the cable is thinner still.

04 Cooling and the shell

Cooling and the building are about the same size, and each is a small slice of the dollar. People talk about the hall as if the hall were the spend, but on this chart the hall is not where the dollar goes. Inside cooling, chillers and towers are the largest line, and the unit that moves the coolant comes next. Cold plates are a thinner slice, and the rest of cooling is about that same thin size.

Inside the building, the shell and the structural work are most of that small slice. The fit out is a smaller piece of the same slice, and land plus the site are the thin end. You are not buying a field with this dollar. You are buying a shell, and even that shell is a small claim on the dollar.

05 The tool fork does not close

The chart tries to follow the accelerator dollar into the tools that make the chip. It puts a thin label on wafer fab equipment, then draws lithography as a thick bar on the same fork. Etch and inspection are drawn as thin bars, and deposition and packaging sit between those, still far thinner than lithography.

Those widths do not add back to the accelerator line, and they do not add back to the thin wafer fab label beside them. The fork is a sketch of which tool is heavy, not a second set of books. Leave it off the dollar, because those widths do not close.

06 What you actually own

If you only watch the accelerator name, you are watching the largest single line and missing the rest of the dollar. Half the dollar is chips, and the accelerator is about half of that half. The other half of the whole dollar is power, links, cooling, and the shell. Know which branch the name sits on before you treat the chart as a map of what you hold.

A name on the accelerator line is not a name on the grid line, and a name on the optical line is not a name on the switch. Width is the share of this illustrative dollar, not a measure of how hard the part is to get. A thin branch can be one supplier you cannot replace, and a thick branch can be a crowd fighting over the same spend.

The source already warns you that costs move and supply moves, and the widths move with them. Use the chart to see where a dollar of the build can land. Do not use it as a shopping list, and do not use a width as a forecast.