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Chip stocks slide in US and Asia as AI jitters rattle investors

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Re: Chip stocks slide in US and Asia as AI jitters rattle investors

#21

Post by andix »

cosmicgadget wrote: post #15
elliotec wrote: post #4

I'm cautiously optimistic that this is the beginning of a much needed correction toward sobriety with regards to AI investment. The macro effects of all the money going into AI are apocalyptic. Maybe we can take some deep breaths and move forward a little smarter if the hype fest slows down a tad. And if we're lucky, eventually be able to afford RAM again.

> move forward a little smarter Based on everything I've seen, this is an all-out sprint to whatever the goalpost is - superintelligence, AGI, singularity. Whoever is first will win, everyone else will lose. I don't know if it's true or not, but it seems to explain the current direction of tech and leads me to believe no CEO is going to allow his company to slow down.

At some point the "money people" are going to stop setting huge piles of money on fire.

Big tech can finance a lot of AI investments themselves, but they can't keep up the current investments just by themselves, without compromising their non-AI business.

Re: Chip stocks slide in US and Asia as AI jitters rattle investors

#22

Post by cppluajs »

broodbucket wrote: post #14
greesil wrote: post #8

Earlier quoted context omitted.

Or written by AI. Or commented on by AI.

I'd love a flag for "Show HN"s that indicate the author actually wrote it themselves so I can go back to being impressed by them

I think at this point writing like stream of consciousness / having imperfect grammar acts like a soft signal and I am inclined to pay it more attention.

Re: Chip stocks slide in US and Asia as AI jitters rattle investors

#23

Post by indemnity »

elliotec wrote: post #4

I'm cautiously optimistic that this is the beginning of a much needed correction toward sobriety with regards to AI investment. The macro effects of all the money going into AI are apocalyptic. Maybe we can take some deep breaths and move forward a little smarter if the hype fest slows down a tad. And if we're lucky, eventually be able to afford RAM again.

I had to buy an SSD and some RAM to help my son build a PC.

The SSD cost 30% more than I paid two years ago and was half the capacity (1TB). The RAM cost double what I paid two years ago, was slower, and was half the capacity (32GB).

Re: Chip stocks slide in US and Asia as AI jitters rattle investors

#24

Post by igor47 »

elliotec wrote: post #18
dmix wrote: post #6

Earlier quoted context omitted.

> The macro effects of all the money going into AI are apocalyptic The doomer discourse around AI is about as overhyped as the investors are. It's two parties getting pumped up by social media who will be disappointed it's just some new higher economic tier rather than a quick boom or bust. It always takes twice as long for new markets to fully mature. Industries need to actually adapt technology before they see seri…

I'm mostly talking about incredibly environmentally destructive data centers and energy use on the current trajectory. Not even thinking about water problems, the gas and coal requirements alone are climate disasters. [1] [2] But if it is a bubble, which many would argue is the case, an AI capex bust with it's circular financing collapse is one of, if not THE top threat to global financial stability. ~$725B combined…

Hmm. I'm as big an environmentalist as anyone, but I'm pretty sceptical of the data centers as eco disasters narrative. Your sources indicate that renewables already meet over 50% of new data center demand, and the demand is predicted to drive advancements in technologies like SMRs. The water use of a data center is less than a golf course. Gas and coal cannot compete with renewables on price and speed of deployment, and increased utilization of the existing grid can help cover fixed costs which dominate the cost structure, resulting in decreased prices overall even as we increase deployment of renewables.

Re: Chip stocks slide in US and Asia as AI jitters rattle investors

#25

Post by dmix »

elliotec wrote: post #18
dmix wrote: post #6

Earlier quoted context omitted.

> The macro effects of all the money going into AI are apocalyptic The doomer discourse around AI is about as overhyped as the investors are. It's two parties getting pumped up by social media who will be disappointed it's just some new higher economic tier rather than a quick boom or bust. It always takes twice as long for new markets to fully mature. Industries need to actually adapt technology before they see seri…

I'm mostly talking about incredibly environmentally destructive data centers and energy use on the current trajectory. Not even thinking about water problems, the gas and coal requirements alone are climate disasters. [1] [2] But if it is a bubble, which many would argue is the case, an AI capex bust with it's circular financing collapse is one of, if not THE top threat to global financial stability. ~$725B combined…

China managed to double energy production between 2015-2025 (including 60 nuclear reactors). On paper the west should be able to do the same, tech companies are putting huge money into solar, natural gas, and nuclear. Most of the limitations are as you mention people protesting the whole idea of new industry and energy, which is the source of most of the risk. That plus open model/Chinese competition undercutting some big US IPOs.

The long term investments in datacenters and chip manufacturing will likely coincide with with growth in demand from humanoid robots and self-driving cars, so it is likely going to happen anyway over the next decade.

It just will take longer than people expect which creates financial risk, but US capital markets are more resilient than people think.

Re: Chip stocks slide in US and Asia as AI jitters rattle investors

#26

Post by tehlike »

indemnity wrote: post #23
elliotec wrote: post #4

I'm cautiously optimistic that this is the beginning of a much needed correction toward sobriety with regards to AI investment. The macro effects of all the money going into AI are apocalyptic. Maybe we can take some deep breaths and move forward a little smarter if the hype fest slows down a tad. And if we're lucky, eventually be able to afford RAM again.

I had to buy an SSD and some RAM to help my son build a PC. The SSD cost 30% more than I paid two years ago and was half the capacity (1TB). The RAM cost double what I paid two years ago, was slower, and was half the capacity (32GB).

I bought 12 sticks of 64g lrdimm for about 400.

Now each stick is likely over 240$

Re: Chip stocks slide in US and Asia as AI jitters rattle investors

#27

Post by broodbucket »

cppluajs wrote: post #22
broodbucket wrote: post #14

Earlier quoted context omitted.

I'd love a flag for "Show HN"s that indicate the author actually wrote it themselves so I can go back to being impressed by them

I think at this point writing like stream of consciousness / having imperfect grammar acts like a soft signal and I am inclined to pay it more attention.

I feel for those who genuinely liked using emdashes in their writing

Re: Chip stocks slide in US and Asia as AI jitters rattle investors

#28

Post by torginus »

There is undoubtedly a bubble in the sense that AI is crazy overfinanced, and there's a semiconductor shortage - chip makers usually have like mid to low two digit margins for manufacturers of complex chips like NVIDIA, and single digit for ones commodities like memory.

The fact that these companies are either selling these things at multiples of their previous prices, and even then, their P/E ratios are often 10,20,40 shows there's a bidding war for these chips.

It's too much money chasing a fixed amount of product, and the only way to scale the industry is by scaling the entire supply chain, which is a long and expensive process, and certainly isn't fixed by throwing more money at companies.

If existing hardware was sold at the usual margins, all this stuff would cost a tiny fraction of the current price.

This is clearly a precarious position.

Re: Chip stocks slide in US and Asia as AI jitters rattle investors

#29

Post by wanda »

I do not work in finance, perhaps someone here can tell me if I have the wrong impression on the situation here:

Tech giants with AI interests, hyperscalers, have used "special purpose vehicles" — shell companies — to quietly issue credit to AI companies, and these AI companies have used this line of credit to purchase/lease compute hardware/infrastructure primarily from their creditors, inflating the demand and price of said hardware.

And much of the future infrastructure has yet to be constructed, and the hardware available now will at some point become obsolete or at least decrease in collateral value.

But the credit doesn't actually come from the hyperscalers themselves, as it exceeds their actual cashflow, so it comes from investment banks and/or private investors/lenders... who actually absorb the majority of the risk then?

And the big banks are currently offloading their loans at discounted rates, while simultaneously trading in swaps against hyperscalers?

I presume the reason for the shell companies/private funding shadiness, is to keep debt off-the-record and perhaps avoid regulation / exceed risk tolerance limits.

Just how exposed are the banks and the hyperscalers in all this?

Re: Chip stocks slide in US and Asia as AI jitters rattle investors

#30

Post by grey-area »

broodbucket wrote: post #27
cppluajs wrote: post #22

Earlier quoted context omitted.

I think at this point writing like stream of consciousness / having imperfect grammar acts like a soft signal and I am inclined to pay it more attention.

I feel for those who genuinely liked using emdashes in their writing

Em dashes are not the problem, nobody cares about their use. Shoddy and melodramatic writing that doesn’t even make sense is the problem.
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