As long as I've been an adult, hardware was a commodity, and software was where the value was. Software could capture most of the value that was in the total supply chain.

Now, with AI, software becomes less able to demand the margins it once did.

Meanwhile, the history of low margins of hardware have created a situation where there are so few players able to demand now software-style high margins.

Hardware has always been valuable but was unable to capture it's value. Those days might be over.

I hope this encourages people who would build software companies to look to hardware. A lot of fun challenges there. Deeply technical, interesting ones. And now solutions will pay.

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nok22kon 6 hours ago | parent [-]

we have a third category now - LLMs. this is where the value is captured now

	▲	krustyvonklown 4 hours ago \| parent [-]
		LLMs is where value capture is anticipated by the market. There's scant evidence they can capture value if they aren't relying on hardware scarcity and their own investment and contractual risks.