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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

#371

Post by cheema33 »

boxedemp wrote: post #361

Nobody really knows the future. What were originally consumer graphics expansion cards turned out useful in delivering more compute than traditional CPUs. Now that compute is being used for transformers and machine learning, but we really don't know what it'll be used for in 10 years. It might all be for naught, or maybe transformers will become more useful, or maybe something else. 'no way' is very absolute. Unlikel…

> What were originally consumer graphics expansion cards turned out useful in delivering more compute than traditional CPUs.

Graphics cards were relatively inexpensive. When one got old, you tossed it out and move on to the new hotness.

Here when you have spent $1 trillion on AI graphics cards and a new hotness comes around that renders your current hardware obsolete, what do you do?

Either people are failing to do simple math here or are expecting, nay hoping, that trillions of $$$ in value can be extracted out of the current hardware, before the new hotness comes along.

This would be a bad bet even if the likes of OpenAI were actually making money today. It is an exceptionally bad bet when they are losing money on everything they sell, by a lot. And the state of competition is such that they cannot raise prices. Nobody has a real moat. AI has become a commodity. And competition is only getting stronger with each passing day.

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

#372

Post by hollerith »

mike50 wrote: post #370
jimmar wrote: post #275

Earlier quoted context omitted.

I don't know that I'd trust IBM when they are pitching their own stuff. But if anybody has experience with the difficulty of making money off of cutting-edge technology, it's IBM. They were early to AI, early to cloud computing, etc. And yet they failed to capture market share and grow revenues sufficiently in those areas. Cool tech demos (like the Watson Jeopardy) mimic some AI demos today (6-second videos). Yeah, i…

They were selling software as a service in the IBM 360 days. Relabeling a concept and buying Redhat don't count as investments.

What is your reason for believing that IBM was selling software as a service in the IBM 360 days?

What hardware did the users of this service use to connect to the service?

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

#373

Post by mike50 »

SamvitJ wrote: post #339
stingraycharles wrote: post #282

Earlier quoted context omitted.

Xerox was also famously early with a lot of things but failed to create proper products out of it. Google falls somewhere in the middle. They have great R&D but just can’t make products. It took OpenAI to show them how to do it, and the managed to catch up fast .

"They have great R&D but just can’t make products" Is this just something you repeat without thinking? It seems to be a popular sentiment here on Hacker News, but really makes no sense if you think about it. Products: Search, Gmail, Chrome, Android, Maps, Youtube, Workspace (Drive, Docs, Sheets, Calendar, Meet), Photos, Play Store, Chromebook, Pixel ... not to mention Cloud, Waymo, and Gemini ... So many widely adopt…

Search was the only mostly original product. With the exception of YouTube which was a purchase, Android and ChromeOS all the other products were initially clones.

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

#374

Post by cmrdporcupine »

The investors in these companies and all this infrastructure are not so much concerned with whether any specific companies pays off with profits, necessarily.

They are gambling instead that these investments pay out it in a different way: by shattering high labour costs for intellectual labour and de-skilling our profession (and others like it) -- "proletarianising" in the 19th century sense.

Thereby increasing profits across the whole sector and breaking the bargaining power (and outsized political power, as well) of upper middle class technology workers.

Put another way this is an economy wide investment in a manner similar to early 20th century mass factory industrialization. It's not expected that today's big investments are tomorrow's winners, but nobody wants to be left behind in the transformation, and lots of political and economic power is highly interested in the idea of automating away the remnants of the Alvin Toffler "Information Economy" fantasy.

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

#375

Post by mike50 »

edm0nd wrote: post #278
getnormality wrote: post #265

A decade ago, IBM was spending enormous amounts of money to tell me stuff like "cognitive finance is here" in big screen-hogging ads on nytimes.com. They were advertising Watson, vaporware which no one talks about today. Are they bitter that someone else has actually made the AI hype take off?

Honestly I'm not even sure what IBM does these days. Seems like one company that has slowly been dying for decades. but when I look at their stock, its at all time highs lol no idea

Basic research and mainframe support contracts. Also they bought RedHat.

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

#376

Post by 7thaccount »

SamvitJ wrote: post #339
stingraycharles wrote: post #282

Earlier quoted context omitted.

Xerox was also famously early with a lot of things but failed to create proper products out of it. Google falls somewhere in the middle. They have great R&D but just can’t make products. It took OpenAI to show them how to do it, and the managed to catch up fast .

"They have great R&D but just can’t make products" Is this just something you repeat without thinking? It seems to be a popular sentiment here on Hacker News, but really makes no sense if you think about it. Products: Search, Gmail, Chrome, Android, Maps, Youtube, Workspace (Drive, Docs, Sheets, Calendar, Meet), Photos, Play Store, Chromebook, Pixel ... not to mention Cloud, Waymo, and Gemini ... So many widely adopt…

They come up with tons and tons of products like Google Glass and Google+ and so on and immediately abandon them. It is easy to see that there is no real vision. They make money off AdSense and their cloud services. That's about it.

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

#377

Post by 7thaccount »

stingraycharles wrote: post #277
getnormality wrote: post #265

A decade ago, IBM was spending enormous amounts of money to tell me stuff like "cognitive finance is here" in big screen-hogging ads on nytimes.com. They were advertising Watson, vaporware which no one talks about today. Are they bitter that someone else has actually made the AI hype take off?

I still have PTSD from how much Watson was being pushed by external consultants to C levels despite it being absolutely useless and incredibly expensive. A/B testing? Watson. Search engine? Watson. Analytics? Watson. No code? Watson. I spent days, weeks arguing against it and ended up having to dedicate resources to build a PoC just to show it didn’t work, which could have been used elsewhere.

This is going on all over again.

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

#378

Post by nunez »

getnormality wrote: post #265

A decade ago, IBM was spending enormous amounts of money to tell me stuff like "cognitive finance is here" in big screen-hogging ads on nytimes.com. They were advertising Watson, vaporware which no one talks about today. Are they bitter that someone else has actually made the AI hype take off?

IBM has been "quietly" churning out their Granite models, with the latest of which performing quite well against LLaMa and DeepSeek. So not Anthropic-level hype but not sitting it out completely either. They also provide IP indemnification for their models, which is interesting (Google Cloud does the same).

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

#379

Post by falcor84 »

SamvitJ wrote: post #339
stingraycharles wrote: post #282

Earlier quoted context omitted.

Xerox was also famously early with a lot of things but failed to create proper products out of it. Google falls somewhere in the middle. They have great R&D but just can’t make products. It took OpenAI to show them how to do it, and the managed to catch up fast .

"They have great R&D but just can’t make products" Is this just something you repeat without thinking? It seems to be a popular sentiment here on Hacker News, but really makes no sense if you think about it. Products: Search, Gmail, Chrome, Android, Maps, Youtube, Workspace (Drive, Docs, Sheets, Calendar, Meet), Photos, Play Store, Chromebook, Pixel ... not to mention Cloud, Waymo, and Gemini ... So many widely adopt…

Notably all other than Gemini are from a decade or more ago. They used to know how to make products, but then they apparently took an arrow in the knee.

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

#380

Post by projektfu »

Esras wrote: post #347
SamvitJ wrote: post #339

Earlier quoted context omitted.

"They have great R&D but just can’t make products" Is this just something you repeat without thinking? It seems to be a popular sentiment here on Hacker News, but really makes no sense if you think about it. Products: Search, Gmail, Chrome, Android, Maps, Youtube, Workspace (Drive, Docs, Sheets, Calendar, Meet), Photos, Play Store, Chromebook, Pixel ... not to mention Cloud, Waymo, and Gemini ... So many widely adopt…

I think the sentiment is usually paired with discussion about those products as long-lasting, revenue-generating things. Many of those ended up feeding back into Search and Ads. As an exercise, out of the list you described, how many of those are meaningfully-revenue-generating, without ads? A phrasing I've heard is "Google regularly kills billion-dollar businesses because that doesn't move the needle compared to an…

Before Google touched Android it was a cool concept but not what we think of today. Apparently it didn't even run on Linux. That concept came after the acquisition.
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