We must disagree on what a bubble is or whether AI is a bubble, because what you’re saying seem nonsensical to me.
Demand for AI will slowly grow, but the insane prices for components will come down because what is driving those prices is speculation about future growth, not actual current, near- or even medium-term demmand.
Another thing to consider is that AI infrastructure is barely infrastructure at all–you have to buy new GPUs every 5-or-so years, at a tremendous cost. If you build a data center, they, in a sane world, those GPUS need to pay for themselves before the next batch of GPUs comes in.
There really is no reason to go nuts building temporary infrastructure when the price is at its peak. Please, I’m begging you, start making sense.
Current demand for AI seems anything but slow… do you think this hardware is being hoarded by large buyers, instead of being put to commercial use ASAP?
Whether it takes 3 months or 5 years to pay for itself is a valid Q though, and there is an element of risk that these companies take on with large hardware purchases in a rapidly evolving industry. Ultimately profits will need to cover any debts they take on, and there’s only so much private investment money to go around… I expect to see more consolidation as this plays out.
Owning datacenters with secure energy sources seems like a safe bet though, and is probably the bigger initial investment.
We must disagree on what a bubble is or whether AI is a bubble, because what you’re saying seem nonsensical to me.
Demand for AI will slowly grow, but the insane prices for components will come down because what is driving those prices is speculation about future growth, not actual current, near- or even medium-term demmand.
Another thing to consider is that AI infrastructure is barely infrastructure at all–you have to buy new GPUs every 5-or-so years, at a tremendous cost. If you build a data center, they, in a sane world, those GPUS need to pay for themselves before the next batch of GPUs comes in.
There really is no reason to go nuts building temporary infrastructure when the price is at its peak. Please, I’m begging you, start making sense.
Current demand for AI seems anything but slow… do you think this hardware is being hoarded by large buyers, instead of being put to commercial use ASAP?
Whether it takes 3 months or 5 years to pay for itself is a valid Q though, and there is an element of risk that these companies take on with large hardware purchases in a rapidly evolving industry. Ultimately profits will need to cover any debts they take on, and there’s only so much private investment money to go around… I expect to see more consolidation as this plays out.
Owning datacenters with secure energy sources seems like a safe bet though, and is probably the bigger initial investment.