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

#301

Post by scotty79 » Wed, Dec 03, 2025, 1:51 AM UTC

coliveira wrote: post #111

nashashmi wrote: post #93

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.

That would be true for general purpose servers. But what they want is lots of special purpose AI chips. While is still possible to use that for something else, it's very different from having a generic server farm.

I can't imagine everybody suddenly leaving AI like a broken toy and taking all special purpose AI chips offline. AI serves millions of people every day. It's here to stay even if it doesn't get any better than it is it already brings immense value to the users. It will keep being worth something.

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

#302

Post by skippyboxedhero » Wed, Dec 03, 2025, 1:51 AM UTC

scroot wrote: post #24

As an elder millennial, I just don't know what to say. That a once in a generation allocation of capital should go towards...whatever this all will be, is certainly tragic given current state of the world and its problems. Can't help but see it as the latest in a lifelong series of baffling high stakes decisions of dubious social benefit that have necessarily global consequences.

Can you imagine if the US wasn't so unbelievably far ahead of everyone else?

I am sure the goat herders in rural regions of Pakistan will think themselves lucky when they see the terrible sight of shareholder value being wantonly destroyed by speculative investments that enhance the long-term capital base of the US economy. What an uncivilized society.

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

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Post by scotty79 » Wed, Dec 03, 2025, 1:54 AM UTC

qwertyuiop_ wrote: post #11

The question no one seems to be answering is what would be the EOL for these newer GPUs that are being churned out of NVDIA ? What % annual capital expenditures is refresh of GPUs. Will they be perpetually replaced as NVIDIA comes up with newer architectures and the AI companies chase the proverbial lure ?

I think the key to replacing is power efficiency. If Nvidia is not able to make GPUs that are cheaper to run than previous generation theres no point for replacing previous generation. Time doesn't matter.

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

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Post by johncolanduoni » Wed, Dec 03, 2025, 1:54 AM UTC

broodbucket wrote: post #290

getnormality wrote: post #265

A decade ago, IBM was spending enormous amounts of money to tell me stuff like "cognitive finance is here" in big screen-hogging ads on nytimes.com. They were advertising Watson, vaporware which no one talks about today. Are they bitter that someone else has actually made the AI hype take off?

IBM ostensibly failing with Watson (before Krishna was CEO for what it's worth) doesn't inherently invalidate his assessment here

It makes it suspect when combined with the obvious incentive to make the fact that IBM is basically non-existent in the AI space look like an intentional, sagacious choice to investors. It very may well be, but CEOs are fantastically unreliable narrators.

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

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Post by marcosdumay » Wed, Dec 03, 2025, 1:54 AM 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…

Historically, GPUs have improved in efficiency fast enough that people retired their hardware in way less than 5 years.

Also, historically the top of the line fabs were focused on CPUs, not GPUs. That has not been true for a generation, so it's not really clear if the depreciation speed will be maintained.

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

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Post by johncolanduoni » Wed, Dec 03, 2025, 1:58 AM UTC

slashdave wrote: post #283

bigwheels wrote: post #205

Earlier quoted context omitted.

Because usually it's more efficient for companies to retire the hardware and put in new stuff. Meanwhile, my 10-15 year old server hardware keeps chugging along just fine in the rack in my garage.

More than that. The equipment is depreciated on a 5 year schedule on the company balance sheet. It actually costs nothing to discard it.

There’s no marginal tax impact of discarding it or not after 5 years - if it was still net useful to keep it powered, they would keep it. Depreciation doesn’t demand you dispose of or sell the item to see the tax benefit.

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

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Post by matt-p » Wed, Dec 03, 2025, 1:58 AM UTC

Unless we get AGI.

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

#308

Post by stego-tech » Wed, Dec 03, 2025, 1:59 AM UTC

getnormality wrote: post #265

A decade ago, IBM was spending enormous amounts of money to tell me stuff like "cognitive finance is here" in big screen-hogging ads on nytimes.com. They were advertising Watson, vaporware which no one talks about today. Are they bitter that someone else has actually made the AI hype take off?

If anything, the fact they built such tooling might be why they're so sure it won't work. Don't get me wrong, I am incredibly not a fan of their entire product portfolio or business model (only Oracle really beats them out for "most hated enterprise technology company" for me), but these guys have tentacles just as deep into enterprises as Oracle and are coming up dry on the AI front. Their perspective shouldn't be ignored, though it should be considered in the wider context of their position in the marketplace.

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

#309

Post by ekropotin » Wed, Dec 03, 2025, 1:59 AM UTC

jmspring wrote: post #284

ekropotin wrote: post #236

Earlier quoted context omitted.

Can’t wait for all this cheap ddr5 memory and GPUs

I was looking at my Newegg orders recently. 7/18/2023 - 64GB (2 x 32GB) 288-Pin PC RAM DDR5 6000 (PC5 48000) --> $260. Now, $750+.

Don’t even get me started on this. I recently been shopping on eBay for some DDR4 memory. You may think - who’d need this dated stuff besides me? Yet 16Gb 3200Mhz is at least 60$. Which is effectively the price you paid for DDR5 6000. Crazy, right?

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

#310

Post by MangoToupe » Wed, Dec 03, 2025, 2:01 AM UTC

getnormality wrote: post #265

A decade ago, IBM was spending enormous amounts of money to tell me stuff like "cognitive finance is here" in big screen-hogging ads on nytimes.com. They were advertising Watson, vaporware which no one talks about today. Are they bitter that someone else has actually made the AI hype take off?

> Are they bitter that someone else has actually made the AI hype take off?

Does it matter? It’s still a scam.