Mobile carriers built enormously valuable, high-growth infrastructure but captured almost none of the resulting value because it was competed away as a commodity, and AI infrastructure is likely headed the same way.
Drawing on the mobile data era, Evans notes that despite traffic growing ~2000x, telcos' margins stayed flat for 20 years and all the valuable innovation was captured by companies further up the stack — a likely preview for AI infrastructure providers. ✦ AI generated
Benedict Evans · a16z Podcast · 2026-06-08 · original ↗
starts at this moment · 11:57
“how did this compare with mobile um or other sort of platform in terms of you know use user early user adoption on on sort of the you know weekly or daily user”
since then mobile data traffic has risen by something like one and a half to 2,000 times and the mobile networks collectively have revenue of about a trillion dollars and they spend about 200 billion dollars a year on capex and the s[t]ocks have been flat for 20 years and all the cool stuff got built by somebody else.
verbatim transcript · starts at 11:57
11:41know you messed about for a couple of days and you get a bill for 10 grand and you're like what the hell is this? Um [snorts] that's exactly what you know you see little literally see these stories now um which is exactly what happened in kind of 2009 8 9 10 also what happened in like 2001 and 2 and three with GPS um but I think the other interesting
11:57part of that analogy is or that comparison is that since then mobile data traffic has risen by something like one and a half to 2,000 times and the mobile networks collectively have revenue of about a trillion dollars and they spend about 200 billion dollars a year on capex and the socks have been flat for 20 years and all the cool stuff got built by somebody else and they kind
12:21of all thought that they were going to build all the cool stuff like I worked for a phone company that had a banking license because they thought like they would they would do they would do mobile banking um which now seems absolutely insane um but that's kind of the point is they built this amazing piece of global incredibly sophisticated very expensive global infrastructure with enormous growth in use all the time and
12:40it changed all of our lives and we all pay for it and they didn't make any money from it because all the value moved up stack and this is of course absolutely as I said earlier this is the absolutely central question for for LLMs is can the model do the whole thing or do you have to have 300 apps built on top of it can you just go to the model
12:59and say do my taxes for me or do you need to have a tax thing that uses that might use some AI in 10 10 different ways inside it um and if not then what is it to be a foundation model provider is this just commodity infrastructure that gets sold at marginal cost which is somehow seems to be a very difficult concept for people to grasp right now
13:22because you can sell all the tokens you can make so you can price it at ROI but over the next couple of years we've got like a trillion2 trillion dollars of capex coming down the pipe and the models get 100x 200x efficient more efficient every year and then there's new models and will the models use more tokens or less tokens but wherever like we'll get to a different equilibrium and
13:43why would that equilibri would be one where the model companies have pricing power when the models are all kind of the same doing kind of the same thing with the same chips why would they have pricing power and I think that's so it's a long answer to your question but you know you go back and look over time like chip companies didn't capture the value um ISPs didn't capture the value mobile