IBM CEO says there is 'no way' spending on AI data centers will pay off • Hacker News Board

Re: IBM CEO says there is 'no way' spending on AI data centers will pay off

#91

Post by verdverm » Tue, Dec 02, 2025, 7:39 PM UTC

malux85 wrote: post #4

verdverm wrote: post #2

IBM CEO is steering a broken ship and it's not improved course, not someone who's words you should take seriously. 1. The missed the AI wave (hired me to teach watson law only to lay me off 5 wks later, one cause of the serious talent issues over there) 2. They bought most of their data center (companies), they have no idea about building and operating one, not at the scale the "competitors" are operating at

Sorry that happened to you, I have been there too, When a company is hiring and laying off like that it’s a serious red flag, the one that did that to me is dead now

It was nearly 10 years ago and changed the course of my career for the better

make lemonade as they say!

Re: IBM CEO says there is 'no way' spending on AI data centers will pay off

#92

Post by QuercusMax » Tue, Dec 02, 2025, 7:39 PM UTC

coliveira wrote: post #82

ayaros wrote: post #48

Earlier quoted context omitted.

Why is this so horrible. Put more resources in the hands of the average person. They will get pumped right back into the economy. If people have money to spend, they can buy more things, including goods and services from gigantic tax-dodging mega-corporations. Gigantic mega-corporations do enjoy increased growth and higher sales, don't they? Or am I mistaken?

Because government is always a fight about resources. More resources in the hands of common people and to make their lives better is less money in the hands of powerful corporations and individuals, be it in the form of higher taxes for the rich or less direct money going to their enterprises.

One of the big issues is money in politics. Our congresspeople make a killing off of legal insider trading, they take huge donations from companies, and the supreme court has even said that it's cool to give "gratuities" in exchange for legislation or court rulings you like.

Corruption is killing this country.

Re: IBM CEO says there is 'no way' spending on AI data centers will pay off

#93

Post by nashashmi » Tue, Dec 02, 2025, 7:41 PM UTC

Don’t worry. The same servers will be used for other computing purposes. And maybe that will be profitable. Maybe it will be beneficial to others. But This cycle of investment and loss is a version of distribution of wealth. Some benefit.

The banks and loaners always benefit.

Re: IBM CEO says there is 'no way' spending on AI data centers will pay off

#94

Post by kenjackson » Tue, Dec 02, 2025, 7:41 PM UTC

georgeecollins wrote: post #12

kenjackson wrote: post #6

I don't understand the math about how we compute $80b for a gigawatt datacenter. What's the costs in that $80b? I literally don't understand how to get to that number -- I'm not questioning its validity. What percent is power consumption, versus land cost, versus building and infrastructure, versus GPU, versus people, etc...

First, I think it's $80b per 100 GW datacenter. The way you figure that out is a GPU costs $x and consumes y power. The $x is pretty well known, for example an H100 costs $25-30k and uses 350-700 watts (that's from Gemini and I didn't check my work). You add an infrastructure (i) cost to the GPU cost, but that should be pretty small, like 10% or less. So a 1 gigawatt data center uses n chips, where y n = 1 GW. It cos…

The article says, "Kirshna said that it takes about $80 billion to fill up a one-gigawatt data center."

But thanks for you insight -- I used your basic idea to estimate and for 1GW it comes to about $30b just for enough GPU power to pull 1GW. And of course that doesn't take into account any other costs.

So $80b for a GW datacenter seems high, but it's within a small constant factor.

That said, power seems like a weird metric to use. Although I don't know what sort of metric makes sense for AI (e.g., a flops counterpart for AI workloads). I'd expect efficiency to get better and GPU cost to go down over time (???).

UPDATE: Below someone posted an article breaking down the costs. In that article they note that GPUs are about 39% of the cost. Using what I independently computed to be $30b -- at 39% of total costs, my estimate is $77b per GW -- remarkably close to the CEO of IBM. I guess he may know what he's talking about. :-)

Re: IBM CEO says there is 'no way' spending on AI data centers will pay off

#95

Post by ryandrake » Tue, Dec 02, 2025, 7:42 PM UTC

myaccountonhn wrote: post #17

> In an October letter to the White House's Office of Science and Technology Policy, OpenAI CEO Sam Altman recommended that the US add 100 gigawatts in energy capacity every year. > Krishna also referenced the depreciation of the AI chips inside data centers as another factor: "You've got to use it all in five years because at that point, you've got to throw it away and refill it," he said. And people think the clima…

LOL, maybe Sam Altman can fund those power plants. Let me guess: He'd rather the public pay for it, and for him to benefit/profit from the increased capacity.

Re: IBM CEO says there is 'no way' spending on AI data centers will pay off

#96

Post by armitron » Tue, Dec 02, 2025, 7:42 PM UTC

ericmcer wrote: post #78

ayaros wrote: post #37

Earlier quoted context omitted.

I'm a younger millennial. I'm always seeing homeless people in my city and it's an issue that I think about on a daily basis. Couldn't we have spent the money on homeless shelters and food and other things? So many people are in poverty, they can't afford basic necessities. The world is shitty. Yes, I know it's all capital from VC firms and investment firms and other private sources , but it's still capital . It shou…

The last 10 years has seen CA spend more on homelessness than ever before, and more than any other state by a huge margin. The result of that giant expenditure is the problem is worse than ever. I don't want to get deep in the philosophical weeds around human behavior, techno-optimism, etc., but it is a bit reductive to say "why don't we just give homeless people money".

[flagged]

Re: IBM CEO says there is 'no way' spending on AI data centers will pay off

#97

Post by saulpw » Tue, Dec 02, 2025, 7:42 PM UTC

GaryBluto wrote: post #63

ayaros wrote: post #37

Earlier quoted context omitted.

I'm a younger millennial. I'm always seeing homeless people in my city and it's an issue that I think about on a daily basis. Couldn't we have spent the money on homeless shelters and food and other things? So many people are in poverty, they can't afford basic necessities. The world is shitty. Yes, I know it's all capital from VC firms and investment firms and other private sources , but it's still capital . It shou…

> Yes, I know it's all capital from VC firms and investment firms and other private sources, but it's still capital. It should be spent on meeting people's basic human needs, not GPU power. It's capital that belongs to people and those people can do what they like with the money they earned. So many great scientific breakthroughs that saved tens of millions of lives would never have happened if you had your way.

> It's capital that belongs to people and those people can do what they like with the money they earned.

"earned", that may be the case with millionaires, but it is not the case with billionaires. A person can't "earn" a billion dollars. They steal and cheat and destroy competition illegally.

I also take issue with the idea that someone can do whatever they want with their money. That is not true. They are not allowed to corner the market on silver, they aren't allowed to bribe politicians, and they aren't allowed to buy sex from underage girls. These are established laws that are obviously for the unalloyed benefit of society as a whole, but the extremely wealthy have been guilty of all of these things, and statements like yours promote the sentiment that allows them to get away with it.

Finally, "great scientific breakthroughs that saved tens of millions of lives would never have happened if you had your way". No. You might be able to argue that today's advanced computing technology wouldn't have happened without private capital allocation (and that is debatable), but the breakthroughs that saved millions of lives--vaccines, antibiotics, insulin, for example--were not the result of directed private investment.

Re: IBM CEO says there is 'no way' spending on AI data centers will pay off

#98

Post by kenjackson » Tue, Dec 02, 2025, 7:42 PM UTC

wmf wrote: post #9

kenjackson wrote: post #6

I don't understand the math about how we compute $80b for a gigawatt datacenter. What's the costs in that $80b? I literally don't understand how to get to that number -- I'm not questioning its validity. What percent is power consumption, versus land cost, versus building and infrastructure, versus GPU, versus people, etc...

https://www.investing.com/news/stock-market-news/how-much-do...

Thanks. I should've read this before my last reply.

Re: IBM CEO says there is 'no way' spending on AI data centers will pay off

#99

Post by verdverm » Tue, Dec 02, 2025, 7:42 PM UTC

duxup wrote: post #5

verdverm wrote: post #2

IBM CEO is steering a broken ship and it's not improved course, not someone who's words you should take seriously. 1. The missed the AI wave (hired me to teach watson law only to lay me off 5 wks later, one cause of the serious talent issues over there) 2. They bought most of their data center (companies), they have no idea about building and operating one, not at the scale the "competitors" are operating at

Is his math wrong?

Are the numbers he's claiming accurate? They seem like big numbers pulled out of the air, certainly much large than the numbers we've actually seen committed to (not even deployed yet).

Re: IBM CEO says there is 'no way' spending on AI data centers will pay off

#100

Post by coliveira » Tue, Dec 02, 2025, 7:42 PM UTC

Octoth0rpe wrote: post #18

> Krishna also referenced the depreciation of the AI chips inside data centers as another factor: "You've got to use it all in five years because at that point, you've got to throw it away and refill it," he said This doesn't seem correct to me, or at least is built on several shaky assumptions. One would have to 'refill' your hardware if: - AI accelerator cards all start dying around the 5 year mark, which is possib…

There is the opportunity cost of using a whole datacenter to house ancient chips, even if they're still running. You're thinking like a personal use chip which you can run as long as it is non-defective. But for datacenters it doesn't make sense to use the same chips for more than a few years and I think 5 years is already stretching their real shelf life.