The artificial intelligence infrastructure boom will run significantly longer and cost significantly more than current projections suggest, a veteran venture capitalist has warned.
Ben Narasin, founder and general partner of Tenacity Venture Capital, made the comments on CNBC's Squawk Box on Friday as Anthropic prepares for a listing that could value it at close to $2 trillion.
He said the physical buildout of data centres is being held back by procurement bottlenecks, with essential equipment such as backup generators and turbines taking up to 30 months to acquire.
Narasin compared the scale of construction required to the building of the railroads, a process that reshaped economies over decades and consistently ran over time and budget.
Split
He described the current venture capital landscape as sharply bifurcated between a handful of massive, capital-intensive companies and a long tail of smaller businesses applying AI to niches such as tax or property management.
Many of those smaller players he regards as unfundable due to market saturation.
Narasin said he had reviewed 10,000 pitches over two years and funded just six, and was currently evaluating a single deal after an 18-month pause.
Capital, he said, is concentrating on the very best opportunities and ignoring everything else, a pattern he sees in both venture and public markets.
Long-term demand
Despite his caution on timelines and deal quality, Narasin expressed confidence in the long-term demand case, arguing AI would ultimately surpass electricity in economic impact.
He acknowledged that speculative bubbles could form, but said the underlying utility of transformative technologies tends to persist long after initial volatility subsides.
On Anthropic, he noted the company had posted a 45% rise in third-quarter revenue and has been characterised as the fastest-growing business by revenue in human history.
He was sceptical about buying into high-profile IPOs at launch, arguing investors are often better served by waiting for a more favourable entry point once the excitement fades.
