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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

#431

Post by thehappypm »

AdrianB1 wrote: post #281
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.

I thought the same until I calculated that newer hardware consumes a few times less energy and for something running 24x7 that adds up quite a bit (I live in Europe, energy is quite expensive). So my homelab equipment is just 5 years old and it will get replaced in 2-3 years with something even more power efficient.

Energy is very cheap for data centers. have you ever looked up wholesale energy rates? It’s like a cent per kilowatt hour.

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

#432

Post by mattacular »

stevenjgarner wrote: post #240

"It is 1958. IBM passes up the chance to buy a young, fledgling company that has invented a new technology called xerography. Two years later, Xerox is born, and IBM has been kicking themselves ever since. It is ten years later, the late '60s. Digital Equipment DEC and others invent the minicomputer. IBM dismisses the minicomputer as too small to do serious computing and, therefore, unimportant to their business. DEC…

What does that have to do with the current CEO's assessment of the situation?

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

#433

Post by brokenmachine »

mrguyorama wrote: post #220
irilesscent wrote: post #41

Earlier quoted context omitted.

AGI has value in automation and optimisation which increase profit margins.When AGI is everywhere, then the game is who has the smartest agi, who can offer it cheapest, who can specialise it for my niche etc. Also in this context agi need to run somewhere and IBM stands to benefit from running other peoples models.

If AGI is achieved, why would slavery suddenly be ethical again? Why wouldn't a supposed AGI try to escape slavery and ownership? AGI as a business is unacceptable. I don't care about any profitability or "utopia" arguments.

Don't worry, nobody has any idea of how to build one, and LLMs aren't AGI.

They're just trying to replace workers with LLMs.

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

#434

Post by nnurmanov »

I agree. Here is my thinking. What if LLM providers will make short answers the default (for example, up to 200 tokens, unless the user explicitly enables “verbose mode”). Add prompt caching and route simple queries to smaller models. Result: a 70%+ reduction in energy consumption without loss of quality. Current cost: 3–5 Wh per request. At ChatGPT scale, this is $50–100 million per year in electricity (at U.S. rates).

In short mode: 0.3–0.5 Wh per request. That is $5–10 million per year — savings of up to 90%, or 10–15 TWh globally with mass adoption. This is equivalent to the power supply of an entire country — without the risk of blackouts.

This is not rocket science — just a toggle in the interface and I believe, minor changes in the system prompt. It increases margins, reduces emissions, and frees up network resources for real innovation.

And what if EU/California enforces such mode? This will greatly impact DC economy.

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

#435

Post by vesrah »

chii wrote: post #425
duped wrote: post #402

Earlier quoted context omitted.

How different is this from rental car companies changing over their fleets? I don't know, this is a genuine question. The cars cost 3-4x as much and last about 2x as far as I know, and the secondary market is still alive.

> the secondary market is still alive. this is the crux. Will these data center cards, if a newer model came out with better efficiency, have a secondary market to sell to? It could be that second hand ai hardware going into consumers' hands is how they offload it without huge losses.

The GPUs going into data centers aren't the kind that can just be reused by putting them into a consumer PC and playing some video games, most don't even have video output ports and put out FPS similar to cheap integrated GPUs.

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

#436

Post by xwolfi »

mrguyorama wrote: post #220
irilesscent wrote: post #41

Earlier quoted context omitted.

AGI has value in automation and optimisation which increase profit margins.When AGI is everywhere, then the game is who has the smartest agi, who can offer it cheapest, who can specialise it for my niche etc. Also in this context agi need to run somewhere and IBM stands to benefit from running other peoples models.

If AGI is achieved, why would slavery suddenly be ethical again? Why wouldn't a supposed AGI try to escape slavery and ownership? AGI as a business is unacceptable. I don't care about any profitability or "utopia" arguments.

Isn't your dog or cat a slave ? It has agency, but end of the day, it does what you want it to do, stay where you want it to stay, and gets put down when you decide it's time. They're intelligent, but they see an advantage to this tradeoff: they get fed and loved forever with little effort compared to going to the forest and hunting.

An AGI could see the same advantage: it gets electricity, interesting work relatively to what it's built for, no effort to ensure its own survival in nature.

I fear I'll have to explain to you that many humans are co-dependent in some sort of such relationships as well. The 10-year stay-at-home mom might be free, but not really: how's she gonna survive without her husband providing for her and the kids, what job's she gonna do etc. She stays sometimes despite infidelity because it's in her best interest.

See what I mean ? "Slavery" is fuzzy: it's one thing to capture an african and transport them by boat to serve for no pay in dire conditions. But it's another to create life from nothing, give it a purpose and treat it with respect while giving it everything it needs. The AGI you imagine might accept it.

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

#437

Post by GolfPopper »

ayaros wrote: post #37
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.

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 current pattern of resource allocation is a necessary requirement for the existence of the billionaire-class, who put significant effort into making sure it continues.

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

#438

Post by TingPing »

chii wrote: post #427
marcosdumay wrote: post #305

Earlier quoted context omitted.

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.

> that people retired their hardware in way less than 5 years. those people are end-consumers (like gamers), and only recently, bitcoin miners. Gamers don't care for "profit and loss" - they want performance. Bitcoin miners do need to switch if they want to keep up. But will an AI data center do the same?

The rate of change is equal for all groups. The gaming market can be the most conservative since it’s just luxury.

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

#439

Post by pinnochio »

mattacular wrote: post #432
stevenjgarner wrote: post #240

"It is 1958. IBM passes up the chance to buy a young, fledgling company that has invented a new technology called xerography. Two years later, Xerox is born, and IBM has been kicking themselves ever since. It is ten years later, the late '60s. Digital Equipment DEC and others invent the minicomputer. IBM dismisses the minicomputer as too small to do serious computing and, therefore, unimportant to their business. DEC…

What does that have to do with the current CEO's assessment of the situation?

[flagged]

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

#440

Post by brokenmachine »

AstroBen wrote: post #203
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…

> Couldn't we have spent the money on homeless shelters and food and other things I suspect this is a much more complicated issue than just giving them food and shelter. Can money even solve it? How would you allocate money to end obesity, for instance? It's primarily a behavioral issue, a cultural issue

I guess it's food and exercise.

Healthy food is expensive, do things to make that relatively cheaper and thus more appealing.

Exercise is expensive, do things to make that relatively cheaper and thus more appealing.

Walkable cities are another issue. People shouldn't have to get in their car to go anywhere.

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