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The AI bubble is popping; we just don't know it yet

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Re: The AI bubble is popping; we just don't know it yet

#71

Post by sysguest »

delecti wrote: post #57
thepasch wrote: post #24

Earlier quoted context omitted.

Nvidia has hordes of raucous gamers on the prowl waiting to tear their chips out of their hands the moment hyperscaler demand falters; plus, China has made sure there will always be plenty of open models to run for hobbyists and neoclouds, even if training compute were to drop off a cliff. They'll be just fine.

The market for video game hardware is absolutely puny in comparison to the datacenter GPU boom. I saw it put quite well in a comment on reddit: > In 2020, the gaming segment was 47% of revenue at around 8 billion. Today it's doubled to 16 billion, or 7% of revenue. That's right, data center went from 6 billion 2020 to around 198 billion today. Even if gaming revenue doubles again when the AI bubble pops, their total…

yeah you can't expect gamers to pay enormous "investment bank money" just to play games...

plus, even old gpus run games fine

Re: The AI bubble is popping; we just don't know it yet

#72

Post by ckastner »

cmiles8 wrote: post #53
energy123 wrote: post #46

Earlier quoted context omitted.

> infrastructure that looks increasingly unneeded This is the crux that needs to be substantiated. Without substantiation none of your other arguments hold up.

Are you saying people haven’t been throwing unneeded GPU capacity on the market? That is happening. Frankly it’s the opposite scenario (that’s there’s all this demand) which is struggling for any hard evidence.

> Are you saying people haven’t been throwing unneeded GPU capacity on the market? That is happening.

That, by itself, doesn't have to mean anything.

AWS is far more compute capacity than Amazon needs, but that's not because Amazon misjudged how much capacity they need. They built it out to sell it to others, leveraging know-how and economies of scale to do so very profitably.

Re: The AI bubble is popping; we just don't know it yet

#73

Post by FrustratedMonky »

hajile wrote: post #67
FrustratedMonky wrote: post #48

Earlier quoted context omitted.

Yep, that is what the bet is. The build out will continue, even if it looks different. The Internet was a 'bubble' at one point, and after it crashed in 2000, it didn't go away, it continued to build out. We're still using the Internet after the Internet bubble popped.

On a $100B AI datacenter, some 60-70% of the center needs to be replaced every 2-6 years. These companies claim the hardware lasts 6 years while simultaneously claiming they are relying on new hardware to lower inference costs (implying much more frequent updates). Over 40 years, that's 7-20 hardware changes, that turns into between $420B and $1.4T of ongoing investment (not accounting for inflation). The $30B that i…

I've been through several network upgrades. You are saying the fiber in the ground lasts a long time, but all the equipment on either end gets replaced every ~5 years. I agree this build out seems pretty crazy, but people were saying the same thing with the internet. Arguing if the equipment has a replacement rate of 2-6 years or 30-40 years, I think isn't the part that makes this a bubble.

Re: The AI bubble is popping; we just don't know it yet

#74

Post by hajile »

tremon wrote: post #17
sysguest wrote: post #5

well if bubble pops, everyone will die EXCEPT google UNLESS openAI/etc actually succeeds in making AGI that never hallucinates and goes over the current LLM limitations as for google... well they own the web (+google has plenty of other revenue sources, so it can just pay out its AI survival) if you're a website owner, would you welcome chatgpt/etc's data-collection bots? but... as for google's bots... you need your…

I expect Nvidia to survive the crash on its own, and everyone else except Softbank to be bailed out with US taxpayer money.

Nvidia already seems to be pivoting to "Local inferencing" with stuff like RTX Spark laptops.

The problem is that local inference machines won't allow anywhere close to their current margins or gross sales figures. At the same time, the huge overbuild of GPUs is going to crash server sales and prices for around a half-decade as companies try to avoid hardware upgrades or buy cheap, used equipment to save costs.

I think Nvidia will survive, but they'll be back to something like a 1T (or lower) valuation.

Re: The AI bubble is popping; we just don't know it yet

#75

Post by abirch »

feverzsj wrote: post #3

It's obvious. Most people were expecting this.

"The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities ¾ that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future ¾ will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands." Warren Buffett 2000 https://www.berkshirehathaway.com/2000ar/2000letter.html

Re: The AI bubble is popping; we just don't know it yet

#76

Post by energy123 »

cmiles8 wrote: post #70
prodigycorp wrote: post #65

Earlier quoted context omitted.

Which players, specifically, are you talking about? Everything you said is opinion passed off as fact.

SpaceX has put a ton of excess capacity on the market. Meta tanked chip stocks by saying it was considering the same. Worries about compute overcapacity, via folks saying they want to offload capacity, is literally the thing that nuked the “situational awareness” fund last week. It’s long term demand that matters, not just “price.” High prices without true demand is the literal definition of a bubble.

SpaceX is selling compute to a willing buyer. You can't point to one side of the trade as evidence for under/over capacity. The way we usually judge such things is the price. If the price for compute is going up, which it is, then that's the thing to look at.

Re: The AI bubble is popping; we just don't know it yet

#77

Post by kibwen »

novia wrote: post #43
Cthulhu_ wrote: post #19

Earlier quoted context omitted.

Robotics in the household has been the realm of science fiction for decades and it still hasn't happened. We get dedicated, compact machines like dishwashers and washing machine/dryers, that's it. Most recent innovation has been the automatic vacuum. If you want someone else to do household chores, hire someone. You can pay someone to do your house chores for years for the cost that these things will have initially.

What it we would prefer that there were not other people in our homes for interpersonal reasons?

All robotic home appliances will feature cameras with which people will be watching you and microphones with which people will be listening to you, all the time, forever.

Re: The AI bubble is popping; we just don't know it yet

#78

Post by surgical_fire »

ckastner wrote: post #72
cmiles8 wrote: post #53

Earlier quoted context omitted.

Are you saying people haven’t been throwing unneeded GPU capacity on the market? That is happening. Frankly it’s the opposite scenario (that’s there’s all this demand) which is struggling for any hard evidence.

> Are you saying people haven’t been throwing unneeded GPU capacity on the market? That is happening. That, by itself, doesn't have to mean anything. AWS is far more compute capacity than Amazon needs, but that's not because Amazon misjudged how much capacity they need. They built it out to sell it to others, leveraging know-how and economies of scale to do so very profitably.

They only need companies to suddenly need their GPU compute if those committed contracts don't make it.

How hard can that be?

Re: The AI bubble is popping; we just don't know it yet

#79

Post by goalieca »

KeplerBoy wrote: post #25
lluisantoni wrote: post #21

Earlier quoted context omitted.

Also, something else to add. At first I thought no one wants to build data centers in hotter areas in the middle of deserts (many places in the American continent). So nobody would spend money building a data center in the Chihuahuan Desert for instance. However, a game of latencies will either require cover llm access from these areas, or make people move closer to the other data centers. In the former, llm prices w…

Who cares about a few ms more latency on an LLM API? Maybe for voice, but most other use-cases are quite latency insensitive.

Yeah, the customer support use case is already grinding me even worse than offshoring to India.

Re: The AI bubble is popping; we just don't know it yet

#80

Post by Waterluvian »

digitcatphd wrote: post #14

I would argue we still have not even really gotten started. What do we have in the decade ahead? Robotics in every household, models 10x+ faster and more intelligent than today. Really no significant impact in life sciences, R&D, and 'offline' world / robotics today as of yet, which is where most of the value will live.

The absolutely massive scale and influence of the Web happened after the dot com burst.
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