Remember when we needed 200 servers for an enterprise website because Apache used one process or thread per connection - and Nginx collapsed that into a single box overnight? That moment for LLMs is near. It’s going to move us from the big iron era of AI to small portable brains. Nature has already proved it’s possible with 20 watts and very little heat generation. And I think the data center buildout will end in car…
Everyone keeps repeating this who doesn’t understand the underlying technology. Small llms are still way more efficiently server on big GPUs. Sharing server capacity takes advantage of the massive parallel throughput and sharing of memory bandwidth. You are sharing the GPUs with thousands of concurrent users.
Many analysts (and Microsoft) think even now that if everything committed gets built there will be considerable oversupply and there is not the revenue to pay for it.
If small models do continue to improve in unusual ways (I think there are limits) then the marginal need for cloud AI compute could fall precipitously beyond current estimates. The marginal need for consumer AI could almost totally collapse if someone makes good progress on very small reasoning and tool-calling models (which is a modestly big if)
The possibility of the data centre boom resembling the Chinese real estate bubble is not inconsiderable.