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

Post by lmm » Wed, Dec 03, 2025, 5:23 AM UTC

SamvitJ wrote: post #339

stingraycharles wrote: post #282

Earlier quoted context omitted.

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 adopt…

Post by chii » Wed, Dec 03, 2025, 5:25 AM UTC

physicsguy wrote: post #449

chii wrote: post #425

Earlier quoted context omitted.

> 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.

Data centre cards a don’t have fans and don’t have video out these days.

Post by coliveira » Wed, Dec 03, 2025, 5:29 AM UTC

scotty79 wrote: post #301

coliveira wrote: post #111

Earlier quoted context omitted.

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.

Post by beeflet » Wed, Dec 03, 2025, 5:33 AM UTC

arisAlexis wrote: post #66

mbreese wrote: post #62

I would add an addendum to this -- there is no way the announced spending on AI data centers will all come to fruition. I have no doubt that there will be a massive build-out of infrastructure, but it can't reach the levels that have been announced. The power requirements alone will stop that from happening.

[flagged]

Post by qnleigh » Wed, Dec 03, 2025, 5:38 AM UTC

Multiplayer wrote: post #256

mywittyname wrote: post #167

Earlier quoted context omitted.

Tokens are, roughly speaking, how you pay for AI. So you can approximate revenue by multiplying tokens per year by the revenue for a token. (6.29 10^16 tokens a year) * ($10 per 10^6 tokens) = $6.29 10^11 = $629,000,000,000 per year in revenue Per the article > "It's my view that there's no way you're going to get a return on that, because $8 trillion of capex means you need roughly $800 billion of profit just to pay…

The math here is mixing categories. The token calculation for a single 1-GW datacenter is fine, but then it gets compared to the entire industry’s projected $8T capex, which makes the conclusion meaningless. It’s like taking the annual revenue of one factory and using it to argue that an entire global build-out can’t be profitable. On top of that, the revenue estimate uses retail GPT-5.1 pricing, which is the absolut…