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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

#461

Post by killingtime74 »

rchaud wrote: post #254
stevenjgarner wrote: post #240

"It is 1958. IBM passes up the chance to buy a young, fledgling company that has invented a new technology called xerography. Two years later, Xerox is born, and IBM has been kicking themselves ever since. It is ten years later, the late '60s. Digital Equipment DEC and others invent the minicomputer. IBM dismisses the minicomputer as too small to do serious computing and, therefore, unimportant to their business. DEC…

Got anything vis-a-vis the message as opposed to the messenger? I'm not sure these examples are even the gotchas you're positing them as. Xerox is a dinosaur that was last relevant at the turn of the century, and IBM is a $300bn company. And if it wasn't obvious, the Apple II never made a dent in the corporate market, while IBM and later Windows PCs did. In any case, these examples are almost half a century old and d…

Would you read this if I (a nobody) told you and not the "CEO of IBM"? In that case it's completely fair to question the messenger.

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

#464

Post by physicsguy »

chii wrote: post #453
physicsguy wrote: post #449

Earlier quoted context omitted.

Data centre cards a don’t have fans and don’t have video out these days.

i dont mean consumer market for video cards - i mean a consumer buying ai chips to run themselves so they can have it locally. If i can buy a $10k ai card for less than $5000 dollars, i probably would, if i can use it to run an open model myself.

Ah well yes to a degree that’s possible but at least at the moment you’d still be better off buying a $5k Mac Studio if it’s just inference you’re doing

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

#465

Post by zozbot234 »

matt-p wrote: post #243
PunchyHamster wrote: post #175

Earlier quoted context omitted.

Eh, not exactly. If you don't run CPU at 70%+ the rest of the machine isn't that much more inefficient that model generation or two behind. It used to be that new server could use half power of the old one at idle but vendors figured out that servers also need proper power management a while ago and it is much better. Last few gens increase could be summed up to "low % increase in efficiency, with TDP, memory channel…

Definitely single thread performance and storage are the main reasons not to use an old server. A 6 year old server didn't have nvme drives, so SATA SSD at best. That's a major slow down if disk is important. Aside from that there's no reason to not use a dual socket server from 5 years ago instead of a single socket server of today. Power and reliability maybe not as good.

NVMe is just a different form factor for what's essentially a PCIe connection, and adapters are widely available to bridge these formats. Surely old servers will still support PCIe?

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

#466

Post by IgorPartola »

stevenjgarner wrote: post #272
rchaud wrote: post #254

Earlier quoted context omitted.

Got anything vis-a-vis the message as opposed to the messenger? I'm not sure these examples are even the gotchas you're positing them as. Xerox is a dinosaur that was last relevant at the turn of the century, and IBM is a $300bn company. And if it wasn't obvious, the Apple II never made a dent in the corporate market, while IBM and later Windows PCs did. In any case, these examples are almost half a century old and d…

If it's not obvious, Steve's quote is ENTIRELY about capex ROI, and I feel his quote is more relevant to what is happening today than anything Arvind Krishna is imagining. The quote is posted in my comment not to grandstand Apple in any sense, but to grandstand just how consistently wrong IBM has been about so many opportunities that they have failed to read correctly - reprography, mini computers and microcomputers…

I have no horse in this race.

I don’t think this is really a fair assessment. IBM is in fact a huge company today and it is possible that they are because they took the conservative approach in some of their acquisition strategy.

It is a bit like watching someone play poker and fold and then it turns out they had the high hand after all. In hindsight you could of course know that the risk would have been worth it but at the moment perhaps it did not seem like it given the money the first player would be risking.

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

#467

Post by Atheros »

PrairieFire wrote: post #147
Atheros wrote: post #129

Earlier quoted context omitted.

> likely would have otherwise been put toward stock buybacks Stock buybacks from who ? When stock gets bought the money doesn't disappear into thin air; the same cash is now in someone else's hands. Those people would then want to invest it in something and then we're back to square one. You assert that if not for AI, wealth wouldn't have been spent on materials, land, trades, ect. But I don't think you have any reas…

Totally agree that the money doesn’t vanish. My point isn’t “buybacks literally destroy capital,” it’s about how that capital tends to get redeployed and by whom. Buybacks concentrate cash in the hands of existing shareholders, which are already disproportionately wealthy and already heavily allocated to financial assets. A big chunk of that cash just gets recycled into more financial claims (index funds, private equ…

I really don't think any of that is true; it's just popular rhetoric.

For example: "Buybacks concentrate cash in the hands of existing shareholders" is obviously false: the shareholders (via the company) did have cash and now they don't. The cash is distributed to the market. The quoted statement is precisely backwards.

> A big chunk of that cash just gets recycled

That doesn't mean anything.

> more financial claims (index funds, private equity, secondary shares, etc)

And do they sit on it? No, of course not. They invest it in things. Real actual things.

> buybacks

Already discussed

> M&A

If they use cash to pay for a merger, then the former owners now have cash that they will reinvest.

> balance sheets

Money on a balance sheet is actually money sitting in J.P. Morgan or whoever. Via fractional reserve lending, J.P. Morgan lends that money to businesses and home owners and real actual houses (or whatever) get built with it.

The counterfactual for AI spending really is other real actual hard spending.

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

#468

Post by octoberfranklin »

throwaway31131 wrote: post #204
myaccountonhn wrote: post #17

> In an October letter to the White House's Office of Science and Technology Policy, OpenAI CEO Sam Altman recommended that the US add 100 gigawatts in energy capacity every year. > 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. And people think the clima…

100GW per year is not going to happen. The largest plant in the world is the Three Gorges Dam in China at 22GW and it’s off the scales huge. We’re not building the equivalent of four of those every year. Unless the plan is to power it off Sam Altman’s hot air. That could work. :) https://en.wikipedia.org/wiki/List_of_largest_power_stations

Gigawatts? Pshaw. We have SamaWatts.

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

#469

Post by roncesvalles »

badmonster wrote: post #54

[flagged]

They discuss it in the podcast. Laid fiber is different because you can charge rent for it essentially forever. It seems some people swooped in when it crashed and now own a perpetual money machine.

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

#470

Post by tombert »

lmm wrote: post #451
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…

> 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 ... Many of those are acquisitions. In-house developed ones tend to be the most marginal on that list, and many of their most visibly high-effort in-house products have been dramatic failures (e.g. Google+, Glass, Fiber).

I was extremely surprised that Google+ didn't catch on. The week before Google+ launched, me and all my friends agreed that Facebook is toast, Google will do the same thing but better, and everyone has a Gmail account so there will be basically zero barrier to entry. Obviously, we were wrong; Google+ managed to snatch defeat out of the jaws of victory, Google+ never got significant traction, and Facebook managed to keep growing and now they're yet another Big Evil Tech Corporation.

Honestly, I still don't really know how Google managed to mess that up.

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