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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

#521

Post by EagnaIonat »

vlovich123 wrote: post #494
pacifika wrote: post #487

Earlier quoted context omitted.

50 year grudges are not relevant there is no one still at ibm that worked there in 1977, IMHO.

It’s the ship of Theseus in corporate form. Even if all the people are gone but the culture hasn’t changed, is the criticism inaccurate?

> Even if all the people are gone but the culture hasn’t changed

Can you expand on this? What was the culture then versus now?

For example back then it was the culture to have suit inspectors ensure you had the right clothes on and even measure your socks. (PBS Triumph of the Nerds)

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

#522

Post by Aperocky »

helsinkiandrew wrote: post #514
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…

> IBM has not exactly had a stellar record at identifying the future. IBM invented/developed/introduced magnetic stripe cards, UPC Barcodes, the modern ATM, Hard drives, floppies, DRAM, SQL, the 360 Family of Mainframes, the PC, Apollo guidance computers, Deep Blue. IBM created a far share of the future we're living in. I'm no fan of much of what IBM is doing at the moment but it could be argued that its consultancy/…

The other way to look at it is that the entire consulting industry is teetering on catastrophe. And IBM, being largely a consulting company now, is not being spared.

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

#523

Post by [deleted] »

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…

[deleted]

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

#524

Post by EagnaIonat »

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…

I read the actual article.

He is pointing out that the current costs to create the data centres means you will never be able to make a profit to cover those costs. $800 Billion just to cover the interest.

OpenAI is already haemorrhaging money and the space data centres has already been debunked. There is even a recent paper that points out that LLMs will never become AGI.

The article also finishes out with some other experts giving the same results.

[edit] Fixed $80 to $800

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

#525

Post by elktown »

sho wrote: post #480
cjonas wrote: post #421

Earlier quoted context omitted.

I think it's a bit different because a rental car generates direct revenue that covers its cost. These GPU data centers are being used to train models (which themselves quickly become obsolete) and provide inference at a loss. Nothing in the current chain is profitable except selling the GPUs.

> and provide inference at a loss You say this like it's some sort of established fact. My understanding is the exact opposite and that inference is plenty profitable - the reason the companies are perpetually in the red is that they're always heavily investing in the next, larger generation. I'm not Anthropic's CFO so i can't really prove who's right one way or the other, but I will note that your version relies on…

“like it's some sort of established fact” -> “My understanding”?! a.k.a pure speculation. Some of you AI fans really need to read your posts out loud before posting them.

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

#527

Post by matwood »

mbreese wrote: post #62

I would add an addendum to this -- there is no way the announced spending on AI data centers will all come to fruition. I have no doubt that there will be a massive build-out of infrastructure, but it can't reach the levels that have been announced. The power requirements alone will stop that from happening.

I think you're spot on. OpenAI alone has committed to spending $1.4T on various hardware/DCs. They have nowhere near that amount of money and when pushed Altman gets defensive.

https://techcrunch.com/2025/11/02/sam-altman-says-enough-to-...

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

#528

Post by taneq »

PunchyHamster wrote: post #177
taneq wrote: post #171

Earlier quoted context omitted.

Same, the bang for buck on a 5yo server is insane. I got an old Dell a year ago (to replace our 15yo one that finally died) and it was $1200 AUD for a maxed out recently-retired server with 72TB of hard drives and something like 292GB of RAM.

Just not too old. Easy to get into "power usage makes it not worth it" for any use case when it runs 24/7

To be clear, this server is very lightly loaded, it's just running our internal network services (file server, VPN/DNS, various web apps, SVN etc.) so it's not like we're flogging a room full of GeForce 1080Ti cards instead of buying a new 4090Ti or whatever. Also it's at work so it doesn't impact the home power bill. :D

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

#529

Post by carlmr »

Aperocky wrote: post #522
helsinkiandrew wrote: post #514

Earlier quoted context omitted.

> IBM has not exactly had a stellar record at identifying the future. IBM invented/developed/introduced magnetic stripe cards, UPC Barcodes, the modern ATM, Hard drives, floppies, DRAM, SQL, the 360 Family of Mainframes, the PC, Apollo guidance computers, Deep Blue. IBM created a far share of the future we're living in. I'm no fan of much of what IBM is doing at the moment but it could be argued that its consultancy/…

The other way to look at it is that the entire consulting industry is teetering on catastrophe. And IBM, being largely a consulting company now, is not being spared.

This is a separate argument though. A failing company may still be right in identifying other companies failure modes.

You can be prescient about failure in one area and still fail yourself. There's no gotcha.

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