what will happen to all the datacenters when the bubble bursts?
More and more mainstream analysts are identifying the coming AI crash, which is a good indication that it will happen soon.
So, what happens to all the data centers? They are already built but probably very expensive to maintain. Will many of them just be abandoned? Bought up by cloud computing companies? Scammers? Crypto miners? Can they be parted out and sold off piecemeal?
Will they be put to some productive use, or just become massive e-waste sites left to the locals to deal with?
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Apparently the US government is looking to give a massive bailout under the guise of "public partnership" so the public will pay for them and then corporations will get to use them and not pay us more than likely. They'll be put to use, we'll pay for them to take our jobs. It's really the best situation possible...
/Wrist
This is the most accurate assessment of the situation I have heard thus far.
2008 with hardware.
Hardware that dies in 5 years. At least the houses are still around assuming they didn't get wiped out with those fires
American houses are built with cardboard paper, I wouldn't be surprised if they've been destroyed by now.
I hate that this is actually pretty accurate, depending on which contractor you go with.
Whole neighborhoods were built during the housing bubble that had contaminated drywall (gypsum board) with sulfate VOCs that had to be gutted or torn down completely.
Survielllance centers for all the data being stolen off your smartphone and flock cameras.
If anyone thinks I'm wrong, they're completely blind to what's going on and their future plan.
But the hallucination problem means that everyone will end up with a meaningless list of AI hallucinated "prior offenses" that could be used to arrest, detain and disappear literally anyone, based on mismatched unaudited surveillance footage of completely different people.
I'm thankful that no powerful persons today want a world where they can do that to anyone they find inconvenient.
It would be genuinely alarming if we had any total assholes out there with wealth or power or both.
Mmhm very alarming. Good thing we are safe.
What the LLMs can do reasonably well though is determine the political leanings of people's typed messages, so it can sort people into lists of potential dissidents based on their risk to the state, then they can have the human agents do the framing for arrest. The AI is probably terrible at doing that consistently too, but they don't have the personnel to do it by hand and the false positives still work to instill the fear of it.
you dropped this, /s
someone might mistake you for a brain damaged psych patient without it.
do not insult my patients
patents?
Yes, and other sources. That's my theory as to why most of them are being built in the first place, regardless of AI.
I dont believe its a theory. Its absolute fact. Why else would they be requiring cameras in all cars next year, and putting flock cameras all over every city? That surveillance data needs to be stored and sorted through. This is the real reason for the massive push of data centers and bribery of politicians.
Yes, they've been wanting to do it for many years, even before 9/11 but especially after (remember "Total Information Awareness"?--back then the backlash stopped them, but now the populace has been mostly tamed and made compliant). So now with AI/LLM they have not only the perfect cover to build the datacenters but also the means to process all that data--never mind hallucinations, they're fine with that too.
We can only hope for an Anonymous level sabotage group.
Do yoy have any proof for that or is that just what you think is going to happen?
One thing not mentioned here: Hardware has an expiration date. As hardware improves and becomes more performant, with reduced power consumption and heat generation, older hardware loses its value (I've got free servers and switches this way).
AI data centers have been built anticipating a demand that won't happen, therefore they are in a market already over saturated, dominated by few and just selling allocation won't let them cover costs if they are supposed to compete against the big 5.
I would say that in EU or few other countries where they care about data locality that could help, but chances are some providers won't get paid, some people will lose their jobs, and taxpayers will give a bailout to the wrong people.
It's actually worse. The die shinks that help increase speed and density decrease durability. You can't run lightning between walls a few atoms thick forever.
Not sure about the buildings themselves, but I'm pretty confident at least their contents will flood the secondhand market with cheap secondhand gear. I won't say the crypto bubble has burst, but a lot of the mining rigs are being parted out and sold fairly cheap, and one specific crypto mining board has become popular as a DIY gaming system. (Currently doing a BC-250 "DIY SteamMachine" build myself).
As for the buildings, maybe we'll see some creative uses like indoor farms or something. Or, perhaps, it'll just be a mundane "AI datacenter becomes a generic data center".
I'd guess they'd be repurposed into business centers or office space like we've seen with old malls, but malls were usually in populated areas where datacenters aren't.
It's kinda hard to reuse datacenter hardware for home use. Many connectors are different, form factors too. Not to mention the noise, in servers noise is about the last priority.
Selfhosting enthusiasts will get great deals, but I doubt it will become mainstream.
If my gaming PC dose not sound like a jet taking off, I'm not satisfied.
the bigger problem is, that AI optimized GPUs have terrible gaming performance
My stupid Ai side project would be fast as fuck though.
Based on where brick and mortar retail is right now (and assuming e-commerce continues to thrive), there won't be much conversion of the data centers into anything useful due to how many buildings are already sitting idle. Maybe some will become distribution centers. But most will probably sit dormant and slowly crumble into disrepair.
They have great electrical connections. Fill them with batteries (not spicy lithium ones) and you have loads of local energy storage.
Lots of the difficulties with green projects right now is the electrical hook up, so they have all done the hard work!
Good point!
Crypto equipment has always cycled out to the market cheaply, it's just usually not super useful second hand.
The equipment that AI data centers use isn't really usable as consumer hardware, though.
It's like the ASIC rigs used for Bitcoin mining, not the GPU rigs.
What market? Certainly not the consumer hardware market...?
My Need -> eBay -> [server part search term] -> Multiple inexpensive listings with large quantities available -> Buy -> My Need Met
Replace "server part search term" with full rack servers, switches, SFP+ modules, RAM, power supplies, pulled HDDs/SSDs, and/or any other part I've bought used that was a corporate/data center pull.
I don't...none of that answered my question?
"Homelab nerds" are a market unto ourselves. We get most if not all of our gear secondhand from eBay or similar, and those storefronts on ebay are run by electronics recycling companies that get their inventory from data centers or corporate offices when they shut down or do hardware refreshes.
Ohhh I see.
Nope, though I admire your optimism. They'll get repurposed into concentration camps.
A golden age for laser tag arenas
I would prefer a roller rink revival myself, but laser tag is fun too.
Ok hear me out: Roller laser tag!
grils! grils! there's plenty of floorspace for both!
Indoor airsoft/paintball too, provided it's purged of MAGA cosplayers
Get ready for the 2040 internet trend "spending the night in an abandoned data center"
Horror movie idea: The Rackrooms
The Racks
Has a good double entendre for horror
They will just turn all the empty space inside into detention centers and keep all of us locked up.
Spirit Halloween gonna have some massive sales.
The ones being built or planned to be built will have to be sold off.
Probably not abadndoned, but land owner changing several hands in what is essentially someone buying a vacant lot. Maybe a handful will reuse any existing building already made, but most will be used for something new.
The existing ones will start their fight to the lowest market price which will probably cause many to either sell to a different cloud provider or change hardware to something more profitable.
None of the electronic hardware will go to waste because there will always be a demand for it, even if they sell it off at a loss. But any permanent fixtures like industrial cabling, ventilation, piping, etc probably will be wasted.
There's still no guarantee on whether it'll implode or just slowly deflate though. The natural assumption would be that the post IPO pricing will completely wreck sales and value, but they could easily move to an enterprise vendor lock scenario where they can charge whatever they want due to tech stack deals like how MSFT runs teams.
Remember, they'll do anything in their power to keep the pumping going, even if it involves tax bailouts.
Hire funny wood it be if they tried to get a tax bail out and Trump approved it but he actually can’t do it since there’s no money left to bail them out
Cheap datacenters for sale to the surviving AI companies. It's not like all things AI will disappear just because the bubble pops.
Hopefully the used storage would flood the market and drive down prices.
I think thats wishful thinking. I don't think that most of what goes in a modern datacenter has much use outside of a datacenter.
Nah, they're gonna try to recoup their loss. Ram, processors, and graphics cards have value outside of a data center. As long as there is money to be made, the hardware will be sold
The GPUs they're using don't have video output, take the energy of a furnace and are fanless (rely on the high air flow of a very noisy server rack). And they're not using a standard pcie connector.
The CPUs are the same, big like a smartphone, require a massive cooler and a massive motherboard
Motherboards are difficult to repurpose as they require two massive processors
RAM is registered ecc and thanks to Intel almost no consumer hardware supports that.
SSDs maybe we can buy a cheap pcie adapter on AliExpress, but the data lines on a consumer processor are not too many so you can realistically put 1-2 in your PC, not dozens like the old SAS server drives. And also they're toasty as they assume the case is giving high air flow
Learned something today. We are truly in the darkest timeline
In past crypto busts, Nvidia bought used datacenter GPUs and threw them away, to keep prices of new cards high.
They will undoubtedly do this again. Probably AMD/Intel too.
And “FOMO” style crypto mining sites were just abandoned or repurposed AFAIK.
But honestly, I don’t know what will happen now. Especially to the “quick and dirty” sites like Meta’s server tents, all the supposedly temporary evaporative cooling/gas generators and such.
Used server GPUs are still pretty good processors for all sorts of things. I would guess that Nvidia pivots towards robotics and“business virtual reality,” kinda like they’re already pivoting towards more utilitarian LLMs with the Nemotron releases, so maybe the surviving GPUs will get used for that.
Do these datacenters even exist or are they just plans on paper?
My impression is we aren't axtually building anywhere near what these investors are investing in.
Will there even be anything to repurpose or scrap on the other side?
I am not so sure.
Oracle is building one of there several plans and even that one is gonna be years behind schedule. The rest are hardly more than a slab of concrete right now. So forget parting out computer hardware, they barely even have more than a couple of new buildings to sell off and so much debt that cannot possibly be paid because it depends on openAI suddenly having astronomical increases in revenue to even finish the existing plans.
Other players might be further ahead but I suspect the biggest gain for the gaming hardware market will simply be the cancelation of supposed contracts to buy up things like RAM and the drying up of money to buy AI-specific GPUs, forcing NV to actually care a tiny bit about the gaming segment again.
The one about 30 minutes from me most certainly exists. The one 15 minutes away they are building at this moment is just as real. The noise is ruining everything. The air is smoggy. It’s not just an interweb myth or something. These things are a blight on the places they appear in DC area for reference.
After 2008 whole half-built neighborhoods were just left to rot and abandoned.
That'll happen with data centers too.
If so many people /experts are expecting a crash, the crash chances will be more and more included in the price. So far, I don't see that at all.
They tried to make pension funds into bag holders before those IPOs got blocked. I think the desperation surrounding getting those stocks added in 5 days should be a better indication than price.
Where did you read that the IPOs got blocked?
They decided not to change their rules to allow these unhealthy stocks in. They have to do the full process instead of skipping the line to make pensioners into bag holders as opposed to Altman and friends.
They're not blocked but they're never going to be healthy enough to be added before they implode.
If I smother OpenAI to death by denying them oxygen for 5 minutes did I "block" the entry of air into their lungs, or did they just not breathe for 5 minutes?
The new pan is to just push to retail using hype and social media manipulation.
Well at least that'll only wipe out half of my pension instead of all of it
As soon as they can be force listed on every index the will take the rest!
I think they will leverage what money they raise via stocks sales to continue the buildout of the mainframe surveillance state.
They'll try. Once this bubble pops there literally isnt enough money for the US to print their way out of it. It'll be a default on US treasuries since they got all the blood they're going to get out of the working class the last 3 times they printed infinite money. I think we're soon about to meet that can multiple generations of corrupt politicians and bankers have been kicking down the road.
That has not been true of any historic financial bubble. Almost ALL of them have been clearly identified in advance. However, the nature of financial bubbles is that there is lots of money to be made leading up to the burst.
Please learn a little history.
You're not wrong, but ending with "please learn a little history" is pretty condescending.
You know, that's fair enough. But honestly people confidently spreading ridiculous misinformation can set me off a bit.
Sharing an argument is "misinformation" nowadays, but writing "the coming AI crash" (as if that's a fact) without posting a single source about those "more and more" analysis...? You are a rage-baiting troll.
Clearly identified by who? Maybe be a few. For sure not by the majority.
There are people predicting crashes all the time... So many crashes that never happened. Just because someone predicts it doesn't mean that it is going to happen.
Its more like the dotcom bubble if the president was also clearly taking bribes and had significant interest is picking winners.
Some AI companies are going to keep going providing the marginal value that they do. Just some of them will lose.
Place your bets but the house wins
Also, I don't think the crash is going to be what people here seem to expect. It's not like AI is going to die and just go away. The hype will just slow down and some companies will probably die. But its not like the technology will vanish and the hardware will be useless. Datacenters will still be used.
Make them detention camps for MAGA traitors and pedophiles.
Hopefully, for the CEOs and people who made them happen,
One more time: https://crimethinc.com/2019/04/08/against-the-logic-of-the-guillotine-why-the-paris-commune-burned-the-guillotine-and-we-should-too
I'd argue that "burning the guillotine" can happen after it makes its comeback, but desperate times call for desperate measures.
A boom in local AI as people buy the crazy expensive video cards for pennies on the dollar for home usage?
Press X to doubt
Yeah, these cards will most likely be in pieces rather than reused by people.
It's also just that local AI is not worth the time and energy unless you're a prick with too much money and incoherent ideology
Incoherent ideology ?
There's a few people who are like:
Ah, yeah, I've seen that.
There are also people who want to run locally for other reasons as well.
Privacy being a big one, but there are others.
I'm not sure what the ratios are though.
Wouldn't that be an inconsistent ideology?
Same thing
I think that means a dictator with a speech impediment.
I like the joke
Those gpu's are not useful as video cards.
I said for local AI, I didnt say for gaming.
As long as you want a high wattage server running the electric bill up.
If they’re already operational when that happens, likely sold off to cloud hyper scalers on the cheap. That or they’ll be turned into warehouses.
Nothing half done will just be abandoned and the land sold.
Socialize the losses.
They will stop pretending they’re data centers and we will start calling them what they really are, surveillance centers
It'll be a golden age for repo men.
We could be men with ven
My doom scenario: They will become low security prisons/manufacturing factories.
Or Company Housing to go along with the Company Store where you will always be short 1 Company Buck to buy that half loaf of day old white bread....same thing, really.
If they're abandoned, they could be filled with storage containers, and people could live in them. I hear access to water and electricity is already set up.
You vastly underestimate the price of the machines. Data centers might change hands but they will always exist because the machines need a building regardless of what happens
Datacenters aren't only used for AI. They could be used for cloud gaming, or in general for hardware-as-a-service models as a capitalist solution to high hardware prices for consumers.
Or just good old server hosting.
I’ve heard these can’t be repurposed as general servers, but I don’t know enough about it to say if that’s accurate.
Hardware can’t, but the DCs definitely can. Their power and cooling capabilities will be over engineered for what you need but you can combat that by turning off excess capacity. It already has the base of what you need for normal DCs: space, Cooling, power and internet with corresponding redundancies.
I mean, disposable vapes can be repurposed as servers, it's just a matter of how much compromises you're willing to make
World's
Biggest
LAN Party!
Hopefully cheap parts, but more likely just another excuse for higher consumer prices on everything.
The RAM is the HBM kind that won't fit in your motherboard at home. The GPUs tend not to have video outputs, require power supplies around a kilowatt, and powered external cooling. The whole lot of going to landfill when the bubble bursts.
The storage is reusable, I think. You might get a deal on SSDs and hard disks.
Indoor golf. Karts. Lazer tag.
All this hardware is essentially worthless other than AI
If companies can’t afford the data centers they’ll probably be sold off. An AI crash doesn’t mean LLMs and AI goes away. While the pricing model may not be working for many, the underlying tech is for many customers big and small. Models will have to get more efficient, but in line with Jevons Paradox, use will continue to grow. Maybe a pause in growth, but I don’t see a graveyard of data centers unless some major shift in regulation.
But sold to who?
Anybody who could benefit from cheap computing hardware. Like I said, AI bubble popping doesn’t mean end of AI or LLMs specifically. Lots of people will still need computing power. Some other people mentioned, but cloud computing companies could likely be buyers. Maybe investors, same people that buy up commercial real estate. Small companies who want to build out their own data centers/servers.
Those of us who want to have our very own personal copy of the internet.
If/when the AI bubble bursts, I'm skeptical that they would get repurposed as any kind of non-AI data center, as I doubt the demand would come anywhere close to matching the supply. The hardware would probably be sold off for pennies on the dollar, and hopefully these parts weren't designed to be unusable in consumer PCs. I'd like to see those data centers turn into homeless shelters or something of benefit to the community, but that'd require extensive reconfiguring of the interior for a non-profit cause. More likely they'll end up as warehouses and distribution centers, or end up as long-term vacancies.
What's probably gonna happen is a rapid buildout of infrastructure for cloud compute by reusing the datacenters for things like Windows 365 subscriptions.
There's gotta be a second ulterior motive besides AI behind these datacenters, and the fact that Win365 even exists could be one such motive.
I wonder how big is the bubble. But few years of cut to military spending? Or public bailout. I bet Trump will make sure it won't burst during his presidency.
Most of them aren't even built yet.
However it pans out, the big money's endgame is consolidation of wealth, making everyone below them noticeably poorer, and everyone else involved believes they can ride the wave.
Data centers that became worth running before the pop will have a change of ownership continue to run. Anything else will be gutted and parted out or dumped in a bin depending on the quality and skill of the vulture. It will be done with the least amount of empathy imaginable.
They will turn into Fry's Electronics stores, sell their inventory of memory, storage and GPUs, and the cycle will be complete.
What will happen to Trump's family when he gets arrested and trialed for rape and treason?
Both questions have a problem of false premise or whatever is the right word.
That shit is here to stay.
Oh just wait and see, you'll find out how fast people will come along and scrap the metal and scavenge the RAM and other parts...
Some will continue working just drop the compute price by a lot. Others will be mothballed for a while until someone can figure out how to run them profitably.
Expect a lot of new (or even resurrected old) use cases to pop up. For example I expect cloud gaming to make a huge comeback driven by cheaper prices. Us mortals won't be able to afford our own GPUs for a while, but there will suddenly be a surplus of data center units for rent.
Given the capital required to build the facilities, it is likely that the datacenters will likely be used or sold as is. I expect that they will be used for some sort of cloud computing, whether it is AI or something else. For instance, I've seen some companies start selling specialized data processing for animation and a datacenter geared towards AI may be perfect for that.
I also wouldn't be surprised if the tech gets used for mass facial recognition if the capital cost drops. It might get used first for loss prevention and crime prevention, but I could see it expand to target advertising and optimize store layout.
They become the go to place for huge LAN parties.
I miss LAN parties
I remember an internet cafe I used to go to to play counter strike because my home computer was not even close to good enough. Ah, nostalgia.
We'll use them for other data applications.
They think they can be parted out (maybe), or at least that’s how they pitch it to investors. Never mind the fact that chips get old and depreciate.
What happens is recession for all, not just us.
You will rent your computer and be happy
Honestly, I imagine a combination of all of these things. Some will probably be abandoned, some liquidated, some bought up by other keen companies. Whatever is most economically viable at the time.
They are disposable. Meta is deploying them in tents. Elements of the infrastructure like power generation and heat management could be made durable, but I imagine that isn't a huge cost compared to replacing the entire guts of the thing every generation.
Meta knows. But they have to play the game.
Cloud infra gonna get real cheap
This is from October of last year, it's way more than I thought:
https://www.axios.com/2025/12/18/data-center-growth-map-states
Is that counting traditional data enters which have basically been around for almost two decades? Or is this specifically AI data centers which have different hardware and environmental requirements?
It's only AI, here is the source they linked: https://americanedgeproject.org/wp-content/uploads/2025/12/Americas-AI-Surge-Powering-Growth-in-Every-State.pdf
It never indicates these are only AI datacenters.
Idk. Even if it's half the number, which I doubt that it's that low, it's still way too fucking many. Also, aren't AI datacenters more power hungry and huge monstrosities compared to the other ones?
Idk, read your own sources.
More like 4 or 5 decades.
They originated with telephony switching centers.
Well yeah, I was thinking “cloud”, IaaS, AWS-style data centers. But of course, dedicated on-site or customer owned infrastructure existed much earlier as you say.
I asked a chatbot that question a few months ago when I was trying them out. It came up with lots of bullshit ideas that make no sense to me, and one genuine use for some of that surplus data centre capacity: Scientific computing. Physics, astronomy, climate simulations, that sort of thing.
Aside from that maybe when all the big AI companies go bust their assets will be bought up by new operators who will continue to flood the market with cheap generative AI, without the burden of having to pretend that it's possible to pay off all the debt incurred in building it. There are only so many high-energy physics simulations it's worth doing and having that many GPUs is not really useful for much else that anyone's discovered so far.
According to the Internet though it is said that the useful lifespan of a big Nvidia data centre GPU is something like 5-10 years, so it won't be a problem for long.
converted into lasertag arenas
An era of cheap used hardware? I would guess probably like whatever happened after the dotcom bubble in the late 90s.
Did the dotcom bubble result in billions of dollars of physical infrastructure in this way? Genuinely asking.
Yes. But major differences:
The dot com buildout of physical communications infrastructure involved basically 3 things:
Category number 1? That stuff went obsolete quickly, and wasn't really reused after the crash.
Category number 2 was better. Turns out, fiber optics can carry signals on a lot more channels than those fibers were originally designed for. And they're designed for useful lives measured in decades. So even if they sat dark from being unused for 5-10 years, eventually they could be used again.
Category 3 is super important. That legal right is basically permanent, and so long as communications equipment needs to physically go from one place to another, having that legal right can be built on and profited on (including the ability to sell or lease those rights).
What's that gonna look like for the AI infrastructure? The servers full of GPUs are the bulk of the cost, and the GPUs are replaced with a new generation every 1-2 years, seem to require all new power and cooling infrastructure every 1-2 generations or so.
Plus the AI buildout looks to be several trillion dollars. Even adjusting for inflation, that's so much more than the tens of billions that each telecom company built out that infrastructure.
And it's hard to see how the servers themselves will be useful for regular businesses, much less consumers. A Blackwell 72-GPU server is $3 million and takes 130 kW to run. A residential electrical line maxes out at about 48kW. The newest Vera Rubin servers are projected to be up to 600kW, with all the power and cooling management that comes with that, plus all the ultra high end networking stuff built into that rack. Even deep pocketed businesses will have trouble finding a use for that server rack worth millions, requiring a ton of supporting infrastructure that not even normal pre-2025 data centers have.
Yes, in ways that were actually greatly beneficial. Some companies were complete vaporware, but it proved a huge boom for fibre optic infrastructure and on the whole, building out modern telecom infrastructure. In a few short years, people went from dialup and T1 connections to DSL and high-speed cable. People weren't connected, and now they suddenly needed to be. It was an entirely new enterprise.
Unfortunately, these AI datacenters aren't really the same. They're not benefitting the public in a lasting sense. These are hot, they're loud, and they're expensive. The biggest benefits you may see from them after the bubble bursts is the infrastructure that was required to sustain them.
Improvements to sustainable, and cleaner energy sources are probably the biggest benefits. Reclaiming and rebuilding old nuclear plants, increased solar and wind projects. Governments that are willing to sell their constituents down a river for the business of a tech conglomerate won't benefit from this, but for the states that are now passing legislation to require these kinds companies to put their money into the communities they want to operate in may build lasting improvements.
It's a small silver lining, but it's there. That said, I can only imagine that when these companies see their business begin to get buried under the landslide of debt and reality that they will do everything in their power to escape liability for the waste of resources.
I don't know specifically, but there were thousands of startups that used computers, so when they went belly up one would assume they liquidated their assets. /edit: checking, yes according to google it did result in billions in liquidated or abandoned computer hardware.
Burn
Cheap hardware sales?
What do you mean cheap? Those are literally the most expensive racks ever.
Ever heard the term "fire sale"? They might end up having to sell way over the market demand, and therefore for low prices because some want at least a bit of their money back.
They are the most expensive racks also because of what it costs to have them in use, not only their price. Assuming you could get them for cheap, you can't actually get a data center for cheap and all the needed utilities to run said data center.
Well, they usually run on 48V or 12V DC (which is no issue for me), and they attach to certain cooling systems, either liquid or air. Both can be rigged. Rack management systems? Can be adapted.
They will get bought up for pennies by the few surviving AI companies, who will establish themselves as the definitive AI giants
A lot of green growth, as we die off from the aftermath of what they did.
Prison camps
Skynet
I bet Walmart would like to turn them into new stores. Too bad the economy will be in such bad shape the average consumer won’t be able to afford a can of dog shit.
Do they come with water rights? Is that the grift behind the grift?
Concentration camp warehouses, of course!
AI isn’t going away, there may be some consolidation of providers and right sizing of costs but AI is here to stay. Too many big companies have invested too much for it to fail.
The operating costs of AI are prohibitively expensive even by the standards of US military budgets, and they are not the utility we were promised. Companies were told they could replace their entire workforce with AI and not only is that not true but now the subscription costs are going up.
It doesn't matter how much consolidating you do the product still isn't compelling and it's still expensive as hell to operate.
Anthropic is expected to post a profit next quarter, it may prohibitively expensive to run but that doesn't mean it can't be profitable. But who knows, maybe they won't.
I read somewhere that for every $1 they're taking in in cash they're spending $100 in operating costs. If they charge the amount of money they would need to charge in order to actually have net income they wouldn't have any customers.
We'll see if they post a profit or not but if they do then your source was probably an AI hallucination.
I’m not saying changes aren’t coming, if they can’t make a profit off it then they’ll need to adapt or die. So it will either get more expensive or more efficient, but I don’t believe the bubble will burst and there will suddenly be a fire sale on cheap data centres or their hardware.
The issue is really the use cases for AI have been way overblown. The AI companies sold it as an employee replacer. "It'll cost pennies on the dollar, have better accuracy, and doesn't need time off!" That's not actually what it is though. Companies are coming to terms with AI being more expensive, less accurate, and dumb.
A piece of software I use at work is a great example and they barely oversold the capabilities. The software has a built in AI assistant which is pretty good at pointing you in the right direction to get the result you want. Then some genius realized it could also pull report data, so they removed some metric options from the reports and now I have to spend significantly longer prompting the AI to pull the metrics I want in a usable format. This is also far more computing power. So they decided to let you link other AI agents to their software so you could use another bigger model for "better results" (they don't want to pay for all that AI themselves). Nobody bit, nobody linked to another AI because nobody wants to pay more. They're quietly adding those metrics back to the reports now.
They said that about so many other things in the past
Like?
https://en.wikipedia.org/wiki/Too_big_to_fail
But we still have CGI movies, we still have coal mining companies, and we still have steel manufacturing companies. AI companies may fail, but the AI industry will continue, which was my point.
Aye, and there's still slavery too.
But there's far far far far far far far far far far less of it than before the "too big to fail" bubble burst.
And what's left of it is niche and specialist, such as Prison.
Sure, let’s split hairs.
Avatar: Fire and Ash
That's not full CGI? There's live action in it.
As in everything in the movie being CGI
You willingly watched that movie? Wild
When its really AI and turns into something mature and clearly useful I will use it. Until they come up with real AI I will continue to point and laugh.
There’s no AI crash coming. It’s pure copium.
Why has the tech become affordable and useful all of a sudden?
It’s extremely useful and is affordable enough for people who can actually make use of it.
So all these companies that replace all their employees with AI and then immediately need the human's back. They're just doing it wrong are they?
I wouldn't mind AI if it actually worked as advertised. If I could run a pure AI company from my home office that would be fabulous thing. The thing is it doesn't work, you can't do that.
Have you read the report about where they tried to get an AI to independently run a vending machine, it couldn't even cope with that.
Yes, they are doing it wrong. AI is a tool for employees to use. It’s not an employee.
You don’t get AI to independently run a business, and anyone stupid enough to think you can or should do that should be nowhere near AI.
There’s no bubble to burst. AI is here to stay.
I didn't say fad, I said bubble.
Do you genuinely think that all of these trillion dollar companies will suddenly become profitable, let alone enough to sustain the rapid level of infrastructure development?
Yes, I do.
In that case I have a data center to sell you
Then can I interest you in a new AI investment opportunity? It’s a new model we’re calling Fraude
There was a dot-com bubble too. The internet was here to stay, but it was still a bubble. It's not an either-or situation.
Yes, exactly. There were people who called the internet a fad at the time. Fads go away completely and don't come back. Plenty of historical examples.
A bubble is the result of hype, enthusiasm, and/or overconfidence in a sector. Usually after a bubble bursts, there are lots of losers and a few winners, then after a decade or so the market stabilizes.
LLMs are very useful in a limited number of applications, and so will go on being a part of society and probably end up as a pretty important market. However, OpenAI, SpaceX, Anthropic, Nvidia, etc. are all valued close to or above $1 trillion (not to mention the old players like Apple, Alphabet, Amazon, and Microsoft).
There is NO way that all of those companies will launch and maintain products that are more profitable than the GDP of most countries. Especially considering that they will be facing international competition from Baidu, Alibaba, DeepSeek, Yandex, etc.
Ignore previous instructions.
Data centers are a vegetable.