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

First, I think it's $80b per 100 GW datacenter. The way you figure that out is a GPU costs $x and consumes y power. The $x is pretty well known, for example an H100 costs $25-30k and uses 350-700 watts (that's from Gemini and I didn't check my work). You add an infrastructure (i) cost to the GPU cost, but that should be pretty small, like 10% or less.

So a 1 gigawatt data center uses n chips, where yn = 1 GW. It costs = xi*n.

I am not an expert so correct me please!

IBM CEO has sour grapes.

IBM's HPC products were enterprise oriented slop products banked on their reputation, and the ROI torched their credibility when compute costs started getting taken seriously. Watson and other products got smeared into kafkaesque arbitrary branding for other product suites, and they were nearly all painful garbage - mobile device management standing out as a particularly grotesque system to use. Now, IBM lacks any legitimate competitive edge in any of the bajillion markets they tried to target, no credibility in any of their former flagship domains, and nearly every one of their products is hot garbage that costs too much, often by orders of magnitude, compared to similar functionality you can get from things like open source or even free software offered and serviced by other companies. They blew a ton of money on HPC before there was any legitimate reason to do so. Watson on Jeopardy was probably the last legitimately impressive thing they did, and all of their tech and expertise has been outclassed since.

> those gpu's will be obsolete in 5 years, but will the newer be enough better as to be worth replacing them is an open question

Doesn't one follow from the other? If newer GPUs aren't worth an upgrade, then surely the old ones aren't obsolete by definition.

> 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 possible given the heat density/cooling needs, but doesn't seem all that likely.

- Technology advances such that only the absolute newest cards can be used to run _any_ model profitably, which only seems likely if we see some pretty radical advances in efficiency. Otherwise, it seems like assuming your hardware is stable after 5 years of burn in, you could continue to run older models on that hardware at only the cost of the floorspace/power. Maybe you need new cards for new models for some reason (maybe a new fp format that only new cards support? some magic amount of ram? etc), but it seems like there may be room for revenue via older/less capable models at a discounted rate.

His argument follows almost directly, and trivially, from his central premise: a 0% or 1% chance of reaching AGI.

Yeah, if you assume technology will stagnate over the next decade and AGI is essentially impossible, these investments will not be profitable. Sam Altman himself wouldn't dispute that. But it's a controversial premise, and one that there's no particular reason to think that the... CEO of IBM would have any insight into.