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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

#751

Post by rmoriz »

singpolyma3 wrote: post #320
rmoriz wrote: post #318

The second buyer will make truckloads of money, remember the data center and fiber network liquidation of 2001+ - smart investors collected the overcapacity and after a couple of years the money printer worked. This time it will be the same, only the single purpose hardware (LLM specific GPUs) will probably end on a landfill.

Are they LLM specific?

Deep down technically probably not, but they are optimized for this workload and business model. I doubt that once the AI bubble busts, another business model is viable. While datacenters can be downsized or partially shut down until demand picks up again, high end hardware is just losing money by the second.

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

#752

Post by m101 »

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…

Given power and price constraints, it's not that you cannot run them in 5 years time it's that you don't want to run them in 5 years time and neither will anyone else that doesn't have free power.

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

#753

Post by mark_l_watson »

blablabla123 wrote: post #533

Despite the flashy title that's the first "sober" analysis from a CEO I read about the technology. While not even really news, it's also worth mentioning that the energy requirements are impossible to fulfill Also now using ChatGPT intensely since months for all kinds of tasks and having tried Claude etc. None of this is on par with a human. The code snippets are straight out of Stackoverflow...

I agree. re: energy and other resource use: the analogy I like is with driving cars: we use cars for transportation knowing the environmental costs so we don’t usually just go on two hour drives for the fun of it, rather we drive to get to work, go shopping. I use Gemini 3 but only in specific high value use cases. When I use commercial models I think a little about the societal costs.

In the USA we have lost the thread here: we don’t maximize the use of small tuned models throughout society and industry, instead we use the pursuit of advanced AI as a distraction to the reality that our economy and competitiveness are failing.

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

#754

Post by carefulfungi »

forty wrote: post #735
properbrew wrote: post #676

Earlier quoted context omitted.

Not the OP you're replying to, but I've put together quite a few projects using only LLMs, no hand crafted code anywhere (I couldn't do it!) https://dnbfamily.com https://eventme.app https://blazingbanana.com https://play.google.com/store/apps/details?id=com.blazingban... https://play.google.com/store/apps/details?id=com.blazingban... https://play.google.com/store/apps/details?id=com.blazingban... Are they perfect? N…

Maybe the most depressing part of all this is if people start thinking they would not have been able to do things without the LLM. Of course they would have, it's not like LLMs can do anything that you cannot. Maybe it would have taken more time at least the first time and you would have learned a few things in the process.

It would be more depressing if our imagination didn't exceed the finite time we have to learn and master new skills.

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

#755

Post by VerminOctopus1 »

Glemkloksdjf wrote: post #653
EagnaIonat wrote: post #524

Earlier quoted context omitted.

I read the actual article. He is pointing out that the current costs to create the data centres means you will never be able to make a profit to cover those costs. $800 Billion just to cover the interest. OpenAI is already haemorrhaging money and the space data centres has already been debunked. There is even a recent paper that points out that LLMs will never become AGI. The article also finishes out with some other…

Sry to say but the fact that you argue with LLMs never become AGI, you are not up-to-date. People don't assume LLM will be AGI, people assume that World Models will lead us to AGI. I personally never asumed LLM will become AGI, i always assumed that LLM broke the dam for investment and research into massivce scale compute ML learning and LLMs are very very good in showing were the future goes because they are already…

Are OpenAI or Anthropic et al seriously building towards “world models”? I haven’t seen any real evidence of that. It seems more like they are all in on milking LLMs for all they are worth.

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

#756

Post by knollimar »

brookst wrote: post #717
wartywhoa23 wrote: post #660

Earlier quoted context omitted.

They really should have been supplying at least a week worth of readymade "projects" to every freelance AI promoter out there to demonstrate x9000 AI productivity gains for the skeptics. Because vibing the air about those gains without any evidence looks too shilly.

As opposed to ad hominems and handwave dismissals, which are highly credible?

I handwave dismiss bigfoot, too

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

#757

Post by m101 »

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…

How about check out how many companies exist today vs existed in 1958? If you look at it that way then just surviving is an achievement in itself and then you might interpret their actions as extremely astute business acumen.

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

#758

Post by rmoriz »

nialse wrote: post #321
rmoriz wrote: post #318

The second buyer will make truckloads of money, remember the data center and fiber network liquidation of 2001+ - smart investors collected the overcapacity and after a couple of years the money printer worked. This time it will be the same, only the single purpose hardware (LLM specific GPUs) will probably end on a landfill.

The game is getting OpenAI to owe you as much money as you can. When they fail to pay back, you own OpenAI.

You are talking about the circular investments in the segment? Yes, but assume NVIDIA can get cheap access to IP and products of failing AI unicorns through contracts, this does not mean the LLM business can be operated profitably by them. Models are like fresh food, they start to rot by the training cut off date and lose value. The process of re-training a model will always be very expensive.

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

#759

Post by m101 »

bayindirh wrote: post #518
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…

IBM is an interesting beast when it comes to business decisions. While I can't give exact details, their business intelligence and ability to predict monetary things is uncannily spot-on at times. So, when their CEO says that this investment will not pay off, I tend to believe them, because they most probably have the knowledge, insight and data to back that claim, and they have ran the numbers. Oh, also, please let'…

As evidenced by the fact that they are a 100+ year old company that still exists. People forget that.
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