Perplexity CEO Says On-Device AI Threatens Data Centers As Industry Faces '$10 Trillion Question' — Apple, Qualcomm Positioned To Benefit

Aravind Srinivas, CEO of Perplexity AI, which is backed by Jeff Bezos and Nvidia Corp. (NASDAQ:NVDA), issued a contrarian warning about the future of artificial intelligence, saying on-device intelligence running on personal devices could disrupt the centralized data center model driving massive infrastructure investments. Localized AI Could Upend Data Center Industry “The biggest threat to a data center is if the intelligence can be packed locally on a chip that’s running on the device and then there’s no need to inference all of it on like one centralized data center,” Srinivas said in a podcast interview with Prakhar Gupta released last week. Srinivas, who has previously worked at OpenAI, Google Brain, and DeepMind, said that AI running directly on personal devices could reduce the need for centralized data centers. “That really disrupts the whole data center industry like it doesn’t make sense to spend all this money $500 billion, $5 trillion whatever on building all the centralized data centers across the world,” he said, calling it a “$10 trillion question, hundred trillion dollar question.” He also highlighted scenarios where AI running locally could learn from repeated tasks on individual devices, adapting over time and automating user activities. “It adapts to you and over time starts automating a lot of the things you do. That way you don’t have to repeat it. That’s your intelligence. You own it. It’s your brain,” Srinivas said. See Also: Apple Scales Back Vision Pro Production, Marketing After Sluggish Sales: Report Chip Companies and OEMs Positioned to Benefit Apple Inc. (NASDAQ:AAPL) has “a massive advantage” due to its M1 chips and power-efficient devices, according to Srinivas. Qualcomm Inc. (NASDAQ:QCOM) and original equipment manufacturers, including Apple, Samsung (OTC:SSNLF), Lenovo (OTC:LNVGF), and HP Inc. (NYSE:HPQ) could also benefit from distributing AI-enabled devices. However, technical barriers remain. Srinivas noted that no AI model has yet been released that can run efficiently on a local chip while completing tasks reliably. The Indian-born entrepreneur expects early adoption on MacBooks or iPads before reaching smartphones. Implications For Robotics And Labor He also discussed the potential for AI in the physical world, especially in robotics. Srinivas said AI could transform the labor market by automating many tasks now done by humans, echoing concerns raised by Geoffrey Hinton who is often called the ‘Godfather of AI’. Industry Risks The U.S. economy is becoming increasingly reliant on AI, raising concerns about a potential AI bubble. If such a bubble bursts, centralized data centers could become a “single point of failure,” with widespread economic repercussions. Srinivas’s caution highlights a crucial question for the AI and tech industries: will centralized data centers continue to be the foundation of the digital economy as AI becomes more dispersed, or will intelligence on personal devices radically transform the sector? Read Next: AI Boom Creates Over 50 New Billionaires Amid Record $202 Billion In Funding Photo courtesy: Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.