a16z breaks down AI capex: $50 chips, $20 power per $100 of infrastructure spend
FinanceYF5 · x · 2026-10-14
An a16z Sankey chart (source: BNP Paribas Equity Research, Aug 2026) breaks down where each $100 of AI infrastructure capex goes:
- Chips $50: accelerators $25, memory ICs $15, CPUs/other/server production $10
- Power $20: grid connection & independent generation $10, distribution $6.5, on-site electrical routing $3.5
- Networking $15: optical transceivers $5.5, switches $4, cabling $2, network processors $3
- Cooling & facilities $15: cooling $7.5 (cold plates, CDUs, chillers), facilities & construction $7.5 (building shell $4, fit-out $2.5, land $1)
Chip spend further decomposes into lithography ($12), deposition ($2), etching ($1), packaging ($2), and more. The takeaway: the AI race looks like a model competition but the capital is swallowed by the entire infrastructure supply chain.
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