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

businessinsider.com

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

#331

Post by mikepurvis »

stingraycharles wrote: post #282
jimmar wrote: post #275

Earlier quoted context omitted.

I don't know that I'd trust IBM when they are pitching their own stuff. But if anybody has experience with the difficulty of making money off of cutting-edge technology, it's IBM. They were early to AI, early to cloud computing, etc. And yet they failed to capture market share and grow revenues sufficiently in those areas. Cool tech demos (like the Watson Jeopardy) mimic some AI demos today (6-second videos). Yeah, i…

Xerox was also famously early with a lot of things but failed to create proper products out of it. Google falls somewhere in the middle. They have great R&D but just can’t make products. It took OpenAI to show them how to do it, and the managed to catch up fast .

Google was especially well positioned to catch up because they have a lot of the hardware and expertise and they have a captive audience in gsuite and at google.com.

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

#332

Post by overfeed »

Octoth0rpe wrote: post #31
mcculley wrote: post #22

Earlier quoted context omitted.

But if your competitor is running newer chips that consume less power per operation, aren't you forced to upgrade as well and dispose of the old hardware?

Sure, assuming the power cost reduction or capability increase justifies the expenditure. It's not clear that that will be the case. That's one of the shaky assumptions I'm referring to. It may be that the 2030 nvidia accelerators will save you $2000 in electricity per month per rack, and you can upgrade the whole rack for the low, low price of $800,000! That may not be worth it at all. If it saves you $200k/per rack…

> Sure, assuming the power cost reduction or capability increase justifies the expenditure. It's not clear that that will be the case.

Share price is a bigger consideration than any +/- differences[1] between expenditure vs productivity delta. GAAP allows some flexibility in how servers are depreciated, so depending on what the company wants to signal to shareholders (investing in infra for futur returns vs curtailing costs), it may make sense to shorten or lengthen depreciation time regardless of the actual TCOO keep/refresh cost comparisons.

1. Hypothetical scenario: a hardware refresh costs $80B, actual performance increase is only worth $8B, but the share price increases the value of org's holding of its own shares by $150B. As a CEO/CFO, which action would you recommend- without even considering your own bonus that's implicitly or explicitly tied to share price performance.

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

#333

Post by raw_anon_1111 »

ekropotin wrote: post #236
1vuio0pswjnm7 wrote: post #176

One thing we saw with the dot-com bust is how certain individuals were able to cash in on the failures, e.g., low cost hardware, domain names, etc. (NB. prices may exceed $2) Perhaps people are already thinking about they can cash in on the floor space and HVAC systems that will be left in the wake of failed "AI" hype

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

GPUs have a very high failure rate…

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

#336

Post by jayd16 »

johncolanduoni wrote: post #304
broodbucket wrote: post #290

Earlier quoted context omitted.

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.

You expect somebody to be heavily invested currently and also completely openly pessimistic about it?

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

#337

Post by Forgeties79 »

jayd16 wrote: post #336
johncolanduoni wrote: post #304

Earlier quoted context omitted.

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.

You expect somebody to be heavily invested currently and also completely openly pessimistic about it?

Yeah I was going to say the same thing ha. I get what they’re (the commenter) saying, but one could also argue IBM is putting their money where their mouth is by not investing.

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

#338

Post by ohhnoodont »

reactordev wrote: post #159
saulpw wrote: post #102

Earlier quoted context omitted.

What does it mean to throw in the towel, in your case? Divesting from the stock market? Moving to a hobby farm? Giving up on humanity?

Any dream of owning a home, having retirement, even a career after a couple years when it’s clear I’m over the hump. I’m trying to squeeze as much as I can before that happens and squirrel it away so at least I can have a van down by a river.

What does squirreling it away mean though? A pile of cash instead of investments? The reality is that you don’t get to throw in the towel.

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

#339

Post by SamvitJ »

stingraycharles wrote: post #282
jimmar wrote: post #275

Earlier quoted context omitted.

I don't know that I'd trust IBM when they are pitching their own stuff. But if anybody has experience with the difficulty of making money off of cutting-edge technology, it's IBM. They were early to AI, early to cloud computing, etc. And yet they failed to capture market share and grow revenues sufficiently in those areas. Cool tech demos (like the Watson Jeopardy) mimic some AI demos today (6-second videos). Yeah, i…

Xerox was also famously early with a lot of things but failed to create proper products out of it. Google falls somewhere in the middle. They have great R&D but just can’t make products. It took OpenAI to show them how to do it, and the managed to catch up fast .

"They have great R&D but just can’t make products"

Is this just something you repeat without thinking? It seems to be a popular sentiment here on Hacker News, but really makes no sense if you think about it.

Products: Search, Gmail, Chrome, Android, Maps, Youtube, Workspace (Drive, Docs, Sheets, Calendar, Meet), Photos, Play Store, Chromebook, Pixel ... not to mention Cloud, Waymo, and Gemini ...

So many widely adopted products. How many other companies can say the same?

What am I missing?

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