CES

It is Happy New Year and another CES in the rear-view mirror. Before expectations get too elevated it is important to remember what this show is about, starting with its name – Consumer Electronics Show. Sounds straightforward just like it is written. Traditionally, CES is a very consumer and retail-oriented program. Many of the attendees are suppliers and increasingly Asian producers. Need a smart Car, we’ve got you covered. How about a 116” LED Teevee– television broadcasting might be dead but it’s not small. Do you have those annoying peely things on your imported sweater? Not to worry, CES brings you the next generation Fabric Shaver. There are also distributors, retail buyers, and media all pimping the future of the landfill economy. More on earth moving in a moment.

The show has also become a podium for communicating messages from large tech suppliers. Bill Gates put CES on the map. Gates used to attend regularly back in the early days of Microsoft. Before he had a plane and a pilot, he would fly commercial from Seattle to Las Vegas with a blanket over his head whilst enjoying the pleasures of coach – perhaps Bill does have a soul. Regardless, he seems disillusioned as of late, claiming that world in moving ‘backwards’ and says we will enter a new Dark Age in five years -https://www.yahoo.com/news/articles/billgates-warns-world-going-14000 0809.html.

It is an interesting perspective when juxtaposed with the wild-eyed optimism of the AI crowd at CES. Who are these tech executives and industry leaders communicating with? Other tech companies and those in public service and political appointees of course. They are also signaling to investors and financial analysts regarding the progress of their respective strategies. This show is important because of the timing mostly. It acts as a kind of agenda for the year in terms of technology. Mingling with the crowds, we heard the masses complaining about the show this year. Part of the angst was directed towards Las Vegas itself – which is now expensive, degenerate as ever but with better sports. Gone are the days of the five-dollar breakfast buffet – so there is that. Several people looked like they were skipping breakfast (not naming any names), so just remember the best advice in terms of trade shows is from Gary Larson who says it is better to leave the party ten minutes before you actually do.

Anyway, there are always naysayers. And truth be told, there is a definite shift in the agenda and the investment put forward, most notably, the absence of large-scale US Tech leaders. There are exceptions like AMD, Intel, and Nvidia. On the Monday keynote, Jensen delivered his address setting the tone for AI across the industry. Jensen has been on the road doing these types of shows for at least 10 years. He is a Jedi Master at media manipulation – same schtick, same leather jacket most of the time (think Steve Jobs and his signature black turtleneck), and the same jokes. His message this year seems to be that the growth of AI is gated by memory constraints. And do not blame us for slow AI application innovation. We know that consistently AI applications suck because of inferior performance and no, he was not talking about accuracy of searches. Thus, an apodictic decree is set forth – more memory production is needed. These words of course deflect from Nvidia’s own challenges – aka China accepting delivery of more chips – and function as a catalyst for memory stocks, which are precarious vassals in part to Nvidia. Names like SanDisc, Mircron, and Kioxia Holdings all went soaring like the cachet of Stranger Things on New Year’s Eve, i.e., greater than 20%, immediately.

The second most important theme of the show was AI Applications. There is a heap to unpack particularly around AI application development and the lack in the stack thereof. There is no shortage of Large Language Model platforms to build upon. We work with seven today. But there is a noticeable absence of good applications and widespread adoption with few exceptions, e.g., your experiences at the search bar. There are technical bottlenecks for sure. The software architecture needed for good User Experience (UX), the math functions required to capture context in terms of vectors for LLMs, and the approach to building agents given the lack of standardized tools, limitations of RAG (Retrieval Augmented Generation) and constraints of browser technologies. To say the environment is muddled, proprietary, and frustrating is an understatement. We are not even delving into the challenges inherent with applications that are stochastic by definition. Please G– let the new Air Traffic Control system to be implemented by Peraton – the systems integrator you have probably never heard of – in three and a half years’ time remain as deterministic as possible.

Finally, infrastructure was on the agenda at this year’s conference. Perhaps the most interesting keynote from our point of view was John Creed, Chief Executive Officer at Caterpillar. CAT spoke about AI extensively and how the company makes their assets smarter and safer using this innovative technology. Creed opened by saying: ‘…every digital experience, every app that you use, every AI model that you’re running, every connected device in this room, ultimately runs on physical infrastructure.’ At CloudNineData we of course agree with that. Creed also announced the Cat AI interactive multimodal chatbot. Then they transitioned to a demo showing how this new AI-enabled technology can assist heavy equipment operators by helping with hazard avoidance, like working delicately around power lines. CAT will invest $25 million in education of new workers – chump change in fact for a $289B market cap company. They will need the workers to retrain, create, and operate the fleet of increasingly automated equipment that is soon to hit the market – even Charlie Bucket’s Dad could get a job. Not a large amount of capital but it was a nice gesture anyway.

So, by all means, get out there and buy a new lithium-ion hand warmer this winter, or a glitzy 34 inch QD-OLED gaming display with next-gen RGB Stripe Pixels, or perhaps a mini solar generator to keep all of your tech charged on your upcoming camping trip this summer. But when you do, know that every Megawatt of energy consumed at your local Data Center drives $1M in spending with the likes of Caterpillar for diesel powered generators. CAT is a BUY at the current price of $629.01 for the latter. If you missed this year’s show, do not worry, we will still be talking about the abysmal state of AI applications, Venezuela, Iran and maybe Iceland next year – after all they will need new DC Infrastructure too. But we are not just complaining about it, we are doing something to help at CloudNineData. We officially launched our Application Development Service for Data Centers available for new projects starting in Q2 2026. Unlike others, our focus is not just on agents or infrastructure. We will build your application and your Data Center with integrated compute for a fixed price or as a service. You get all three on time and under budget. Try that with big tech.

Wishing you a wonderful and prosperous 2026!