2026.10.10 | Substack | Weekly | Weekly: AI4S, Gemini 4, TSM & OCS

Google is back in the frontier race, and we think a new training cycle is beginning. As we argue in this week’s column, Gemini 4 is evidence that scaling still works; the next test is how much post-training improves coding and long tasks in Gemini 4.1. With OpenAI, Anthropic, Google, Meta and xAI all investing to defend or improve their positions, we remain bullish on the networking and optical interconnects needed to keep larger clusters productive.

AI for science gives us another reason to be optimistic about where that compute can go. OpenAI’s latest mathematics release still needs independent scrutiny, but progress in problems with verifiable answers could help AI take on more research and engineering work. Drug discovery, materials and energy research offer much broader potential benefits. Physical experiments and clinical trials will still take time; our optimism is about expanding the ideas scientists can test and the connections they can make across disciplines.

The supply chain is preparing for that investment. We see TSMC’s growth increasingly governed by how quickly capacity comes online, and have raised our ASML EUV shipment forecasts again. Marvell’s Investor Day targets are moving closer to our forecasts, backed by longer-term supplier planning. OCS adds another source of optical demand as content per accelerator rises, although deployment beyond Google remains an important assumption in our longer-term model.

On the application side, we are watching retention and cost together. Muse’s improving retention gives Meta a reason to expand acquisition once the economics support it, while computer use opens a much larger pool of work to automation. Our expert interviews also underline the obstacles: high token consumption can limit enterprise adoption, and physical capacity still depends on manufacturing yields, equipment and power. Better models and more infrastructure need to translate into reliable, affordable work.

This Week’s Reports

Going the Way of Go: stronger models make the next training cycle worth watching. Our new column connects AI’s progress in mathematics and programming with Google’s return to the frontier, and explains why we remain optimistic about AI for science and optical interconnect demand.

Column|LLM: Going the Way of Go

1:40 AM

Just two years ago, leading AI models were still making embarrassingly basic mistakes. They fumbled arithmetic and confidently told users that 9.11 was larger than 9.9. Today, mathematicians are examining whether AI-generated proofs settle problems that have resisted decades of human effort. It has been a short journey from the schoolroom to the research frontier.

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TSM & ASML: capacity expansion sets the pace. We expect TSMC’s advanced-node expansion to support further growth and now forecast ASML total EUV shipments of 100/125 units in 2027/28, as both logic and memory customers need more equipment.

Preview|TSM 26Q3: Revenue Growth Depends on the Pace of Capacity Expansion

Oct 8

26Q4 Revenue Growth Forecast at 11% QoQ

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Preview|ASML 26Q3: Raising EUV Shipment Expectations Again

Oct 7

We believe ASML will further ease its capacity bottlenecks, with 2027 low-NA EUV capacity likely to exceed 95 units, above the company’s current guidance of 85 units. Our industry checks also indicate the supply chain is planning production around higher shipment targets.

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MRVL & OCS: more optical content as AI clusters grow. Marvell’s new targets move closer to our forecasts, while our OCS work points to more than $20b of annual demand by 2030, conditional on broader adoption that includes Nvidia from late 2028.

Research|MRVL: Investor Day Targets Move Closer to Our Forecasts

Oct 7

Marvell outlined an ambitious outlook at its October 6 investor day, targeting CY30 (FY31) revenue of $80b at the midpoint and non-GAAP EPS of more than $30.

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Deep|Optics: OCS Content per Accelerator Grows with Each Generation as Demand Widens Beyond Google

Oct 7

A year ago, optical circuit switches were mostly a Google program with one outside supplier shipping under $10m a quarter. Lumentum now expects its September-quarter OCS revenue to exceed $100m, and we believe its OCS revenue will pass $2.5b next year. TPU 8i put OCS ports into inference pods for the first time and the 6D torus would give the next training chip four times as many OCS ports as today.

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META: Muse’s retention is improving before the next growth push. We expect adoption to advance in steps as Meta improves retention and balances user acquisition against the substantial compute cost of serving a personal agent.

Research|META: Muse Growth May Moderate Briefly, Then Pick Up as Retention Improves

FUNDA

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Oct 8

Agent Retention Doesn’t Behave Like Consumer App Retention

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Computer use: a much larger market for AI providers. Our long-term framework points to roughly $1tn of additional annual revenue and automatable work equivalent to about 180mn full-time roles, an estimate of task hours rather than a forecast of layoffs.

Deep|LLM: Computer Use - White-Collar Work’s "Spinning Jenny" Moment; How Many Jobs Will AI Replace?

FUNDA

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Oct 6

Astra’s advances in complex desktop applications and extended workflows across multiple programs warrant a fresh assessment of how much white-collar work AI could automate. We believe computer use may be approaching a point where automation becomes practical for some office tasks, with repetitive, rules-based administrative and operational work likely to see the earliest adoption.

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Premium Report Snapshot

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Research | Personal Agents: Muse Becomes a Daily Assistant, but Shopping Faces Platform Restrictions

Our use-case work suggests Muse is becoming a more regular everyday assistant. Shopping activity has partly shifted toward Walmart and Shopify merchants after Amazon’s restrictions, but login requirements and platform controls continue to limit completion rates.

Deep | CRWV: Capacity Expansion and Further Upside to Revenue per GW

We initiate with a constructive view of CoreWeave’s capacity expansion and long-term customer agreements. Our forecasts put active power at 2.10/3.60/5.40GW at year-end 2026/27/28, with annualized revenue per GW rising to $10.5b/$12b/$13b; execution and realized pricing remain central to the outcome.

Deep | TWLO: How Much Can Twilio Earn When Agents Make Calls?

Personal agents calling businesses could create incremental demand for Twilio’s voice APIs and carrier connections. A scenario of 300mn monthly active users making two calls per month implies $126m of annualized revenue, about 2.1% of Twilio’s 26Q2 annualized revenue, before allowing for displaced existing communications and changes in share or pricing.

Weekly Expert Interviews Summary

A snapshot of the expert interviews we conducted during the past week is below; full transcripts and takeaways are available on the FUNDA platform.

Anthropic: Computer-Use Economics and Enterprise Strategy

Executive, Leading AI research & deployment company

The expert sees high token consumption as a constraint on enterprise computer-use adoption and discusses whether protocol-based automation can improve the economics.

FTAI Power: Execution Risks Behind the Expansion Target (FTAI)

Manager, Leading Aviation Services Provider

The expert questions the feasibility of 100 sets in 2027, citing Montreal space, dedicated staffing and supply-chain constraints that could push delivery into 2029–30.

Memory: Supply Constraints and Customer Negotiations

Former Procurement Manager, Global Cloud Technology Company

The expert sees tight HBM and server DRAM supply supporting pricing, with phased negotiations and long-term agreements moderating increases rather than eliminating them.

HVLP Copper Foil: High-End Capacity Remains Hard to Add

Executive, Regional China Copper Foil Manufacturer

The expert highlights finishing-equipment constraints and yield losses at higher grades and thinner gauges, leaving high-end supply tight even as lower-end HVLP faces potential oversupply.

Trainium: Manufacturing Yields and Capacity Diversification (AMZN)

Executive, a major hyperscaler

The expert reports liquid-cooled rack first-pass yields of roughly 50% in Mexico, with alternative capacity also facing equipment lead times, licensing and power constraints.

Enterprise AI: Spending Shifts Toward Core Platforms (OKTA, MSFT, CRM, NOW, MDB, SNOW)

Strategy Executive, Top US telecom provider

The expert sees AI spending favoring core security, cloud, database and workflow platforms while reducing overlapping point tools, with additional infrastructure spending following model adoption.

Diagnostics: AI Security and Data Modernization (PANW, OKTA, CRWD, SNOW, TEAM)

AI Executive, Mid-sized diagnostics firm

The expert describes a sharp rise in AI security spending from a small base, alongside platform consolidation and Snowflake investment tied to data modernization and agent workloads.

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