I'm not sure if they should vertically integrate, it would probably be a better idea to directly fund the expansion of capacity, much like Apple does when they scale up a new technology for iPhones.

However, that the hyperscalers and AI companies aren't doing this says a lot about their true beliefs about how much future demand AI will have.

AI companies claim they will need a ton of massive expansion, but are unwilling to take on the risk of the capital needed for that expansion.

I'm hearing a lot of sad whining from AI folks about how these chip makers are holding them back, but who actually has the money to finance the expansion easily? Chip makers have been through this game far longer, when Sam Altman went around claiming it was time for $7T of fabs the AI companies made it clear that they were willing to make ridiculous claims, eliminating credibility.

What's needed now is for them to funnel a tiny amount of their massive piles of cash into financing fabs directly.

Because fabs are about the most complex cutting edge technology out there: the "rocket science" of our day (or one of them). And merely having the money is not sufficient. It would be very easy to blow several billion dollars and end up with nothing to show for it.

Just look at how Intel has struggled to compete in recent years, and they have been in the business for decades.

A fab costs $15-20bn and it takes at least five years to build. Plus it requires expertise that none of these companies have.

A fab takes years to build even when you have the necessary know-how. If you don't it'll take some additional experimenting before you can compete with the established manufacturers. By the time you can produce a usable chip the shortage might be over.

A fab costs a billion dollars (really a lot more) and 5 years. It doesn't do anything for anyone today.