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

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

#131

Post by sfink »

newfriend wrote: post #51
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…

Technological advancement is what has pulled billions of people out of poverty. Giving handouts to layabouts isn't an ideal allocation of resources if we want to progress as a civilization.

> Technological advancement is what has pulled billions of people out of poverty.

I agree with this. Perhaps that's what is driving the current billionaire class to say "never again!" and making sure that they capture all the value instead of letting any of it slip away and make it into the unwashed undeserving hands of lesser beings.

Chatbots actually can bring a lot of benefit to society at large. As in, they have the raw capability to. (I can't speak to whether it's worth the cost.) But that's not going to improve poverty this time around, because it's magnifying the disparities in wealth distribution and the haves aren't showing any brand new willingness to give anything up in order to even things out.

> Giving handouts to layabouts isn't an ideal allocation of resources if we want to progress as a civilization.

I agree with this too. Neither is giving handouts to billionaires (or the not quite as eye-wateringly wealthy class). However, giving handouts to struggling people who will improve their circumstances is a very good allocation of resources if we want to progress as a civilization. We haven't figured out any foolproof way of ensuring such money doesn't fall into the hands of layabouts or billionaires, but that's not an adequate reason to not do it at all. Perfect is the enemy of the good.

Some of those "layabouts" physically cannot do anything with it other than spending it on drugs, and that's an example of a set of people who we should endeavor to not give handouts to. (At least, not ones that can be easily exchanged for drugs.) Some of those billionaires similarly have no mental ability of ever using that money in a way that benefits anyone. (Including themselves; they're past the point that the numbers in their bank accounts have any effect on their lives.) That hasn't seemed to stop us from allowing things to continue in a way that funnels massive quantities of money to them.

It is a choice. If people en masse were really and truly bothered by this, we have more than enough mechanisms to change things. Those mechanisms are being rapidly dismantled, but we are nowhere near the point where figurative pitchforks and torches are ineffective.

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

#132

Post by atmavatar »

jkubicek wrote: post #80
dkural wrote: post #61

Earlier quoted context omitted.

[ This comment I'm making is USA centric. ]. I agree with the idea of making our society better and more equitable - reducing homelessness, hunger, poverty, especially for our children. However, I think redirecting this to AI datacenter spending is a red-herring, here's why I think this: As a society we give a significant portion of our surplus to government. We then vote on what the government should spend this on.…

> AI datacenter spending is massive, but if you add it all up, it doesn't cover half of a years worth of government spending. I didn't check your math here, but if that's true, AI datacenter spending is a few orders of magnitude larger than I assumed. "massive" doesn't even begin to describe it

The US federal budget in 2024 had outlays of 6.8 trillion dollars [1].

nVidia's current market cap (nearly all AI investment) is currently 4.4 trillion dollars [2][3].

While that's hardly an exact or exhaustive accounting of AI spending, I believe it does demonstrate that AI investment is clearly in the same order of magnitude as government spending, and it wouldn't surprise me if it's actually surpassed government spending for a full year, let alone half of one.

1. https://www.cbo.gov/publication/61181

2. https://www.google.com/finance/quote/NVDA:NASDAQ

3. https://www.cnbc.com/2025/09/30/nvidias-market-cap-tops-4poi...

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

#133

Post by pjdesno »

coliveira wrote: post #113
kenjackson wrote: post #94

Earlier quoted context omitted.

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 weir…

> power seems like a weird metric to use Because this technology changes so fast, that's the only metric that you can control over several data centers. It is also directly connected to the general capacity of data center, which is limited by available energy to operate.

To expand on rahimnathwani's comment below - the big capital costs of a data center are land, the building itself, the power distribution and the cooling.

You can get a lot of land for a million bucks, and it doesn't cost all that much to build what's basically a big 2-story warehouse, so the primary capital costs are power and cooling. (in fact, in some older estimates, the capital to build that power+cooling cost more per year than the electricity itself)

My understanding is that although power and cooling infrastructure are long-lived compared to computers, they still depreciate faster than the building, so they dominate costs even more than the raw price would indicate.

The state of the art in power and cooling is basically defined by the cost to feed X MW of computing, where that cost includes both capital and operation, and of course lower is better. That means that at a particular SOTA, and at an appropriate scale for that technology, the cost of the facility is a constant overhead on top of the cost of the equipment it houses. To a rough approximation, of course.

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

#134

Post by panick21_ »

542354234235 wrote: post #115
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?

The shift in the US to the idea of “job creators” being business owners is part of it. It was just a way to direct money to the already rich, as if they would hire more people with that money. When it is plainly obvious that consumers are job creators, in that if they buy more goods and services, businesses will hire more people to make or provide more of those things. Or maybe it was trickle down economics. Trickle…

The framing of X or Y are job creators is idiotic. Its literally the most basic fact of economics that you need producers and consumers, otherwise you don't have an economy.

The more economically correct way to express this would be that entrepreneurs and companies who innovated increase productivity and that makes the overall economy more efficient allowing your country to grow.

> Or maybe it was trickle down economics. Trickle up economics still end up with the rich getting the money since we all buy things from companies they own, it just goes through everyone else first. Trickle down cuts out the middleman, which unfortunately is all of us.

This just sounds like quarter baked economics ideas you have made up yourself. Neither 'trickle down' nor 'trickle up' are concepts economist use. And that you confidently assert anything about the social outcomes of these 'concepts' is ridiculous.

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

#135

Post by estearum »

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".

What else happened in the last 10 years in CA?

Hint: https://fred.stlouisfed.org/series/CASTHPI

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

#136

Post by pjdesno »

> $8 trillion of CapEx means you need roughly $800 billion of profit just to pay for the interest

That assumes you can just sit back and gather those returns indefinitely. But half of that capital expenditure will be spent on equipment that depreciates in 5 years, so you're jumping on a treadmill that sucks up $800M/yr before you pay a dime of interest.

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

#138

Post by estearum »

newfriend wrote: post #51
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…

Technological advancement is what has pulled billions of people out of poverty. Giving handouts to layabouts isn't an ideal allocation of resources if we want to progress as a civilization.

Technological advancements and cultural advancements that spread the benefits more broadly than naturally occurs in an industrialized economy. That is what pulled people out of poverty.

If you want to see what unfettered technological advancement does, you can read stories from the Gilded Age.

The cotton gin dramatically increased human enslavement.

The sewing machine decreased quality of life for seamstresses.

> During the shirtmakers' strike, one of the shirtmakers testified that she worked eleven hours in the shop and four at home, and had never in the best of times made over six dollars a week. Another stated that she worked from 4 o’clock in the morning to 11 at night. These girls had to find their own thread and pay for their own machines out of their wages.

These were children, by the way. Living perpetually at the brink of starvation from the day they were born until the day they died, but working like dogs all the while.

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

#139

Post by bryanlarsen »

johnrob wrote: post #83
dotancohen wrote: post #70

Earlier quoted context omitted.

Food and shelter are cheaper than at almost any time in human history. Additionally, people have more variety of healthy foods all year long. No matter how cheap food and shelter are, there will always be people who can not acquire them. Halting all human progress until the last human is fed and sheltered is a recipe for stagnation. Other cultures handle this with strong family bonds - those few who can not acquire f…

Cheap depends on how we define the cost. In relative terms, food is more expensive than ever: https://en.wikipedia.org/wiki/Baumol_effect

Food is not Baumol, productivity increases is how we went from 80% of the population working in primary food production to 1%. These increases have not stopped.

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

#140

Post by amluto »

gowld wrote: post #117
amluto wrote: post #68

Earlier quoted context omitted.

From what I’ve read, addressing homelessness effectively requires competence more than it requires vast sums of money. Here’s one article: https://calmatters.org/housing/2023/06/california-homeless-t... Note that Houston’s approach seems to be largely working. It’s not exactly cheap, but the costs are not even in the same ballpark as AI capital expenses. Also, upzoning doesn’t require public funding at all.

Houston has less homelessness than California because people at the edge of homelessness prefer to live in California than Houston.

I’m not a person on the edge of homelessness, but I did an extremely quick comparison. California cities near the coast have dramatically better weather, but Houston has rents that are so much lower than big California cities that it’s kind of absurd.

If I had to live outdoors in one of these places, all other thing being equal, I would pick CA for the weather. But if I had trouble affording housing, I think Houston wins by a huge margin.

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