tech
February 11, 2026
Executive Briefing: Your Cloud Provider Is Your Competitor for AI Compute
Your CFO approved the AI budget six months ago. The pilots worked. The rollouts are underway. And now someone in procurement is telling you that the inference capacity you need for Q3 doesn’t exist — not at your current vendor, not at the backup, not at any price you’d previously considered reasonable.
TL;DR
- Enterprise AI adoption has led to a surge in demand for inference compute, which is now physically constrained.
- Key components like GPUs and DRAM are experiencing shortages, with new fabrication capacity not expected until late 2027.
- Agentic systems are compounding AI demand, with consumption growing at unprecedented rates, as seen by Google's token processing increase.
- Hyperscalers, who sell compute, are also major consumers and competitors for AI resources, prioritizing their own AI products.
- Inference costs are predicted to spike by 2-3x, significantly impacting business model margins.
- Geopolitical factors and concentration risks in certain regions add to supply chain vulnerabilities.
- Traditional planning methods are failing due to unpredictable demand and inflexible commitments.
- A strategic playbook focusing on securing capacity, routing intelligence, and maintaining optionality is needed for the next 6-12 months.
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