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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

#561

Post by hansmayer »

echelon wrote: post #471
mattacular wrote: post #432

Earlier quoted context omitted.

What does that have to do with the current CEO's assessment of the situation?

IBM sees the funding bubble bursting and the next wave of AI innovation as about to begin. IBM was too early with "Watson" to really participate in the 2018-2025 rapid scaling growth phase, but they want to be present for the next round of more sensible investment. IBM's CEO is attempting to poison the well for funding, startups, and other ventures so IBM can collect itself and take advantage of any opportunities to…

How exactly are they poisoning the well..? OpenAI committed to 1.4 trillion investements...with a revenue of ~13B - how is IBM CEO contributing to that absolutely already poisoned situation? Steve Jobs did not care about naysayers when he introduced iPhone - because his product was so innovative for the time. According to AI boosters, we now have a segment of supposedly incredibly powerful and at the same time "dangerous" AI products. Why are they not sweeping the floor off with the "negators", "luddites", "laggards" etc... After so many hundreds of billions of dollars and supposedly so many "smart" AI researchers...Where are the groundbreaking results man? Where are the billion-dollar startups launched by single persons (heck, I'd settle even for a small team)...Where are the ultimate applications..etc?

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

#562

Post by sethops1 »

roncesvalles wrote: post #475
prodigycorp wrote: post #249

Earlier quoted context omitted.

also because the market (correctly) rewards ibm for nothing, so if they’re going to sit around twiddling their fingers, they may as well do it in a capex-lite way.

I'm still flumoxed by how IBM stock went from ~$130 to $300 in the last few years for essentially no change in their fundamentals (in fact, a decline). IBM's stock price to me is the single most alarming sign of either extreme shadow inflation, or an equities bubble. Why do you say the market correctly prices it this way?

IBM has been quietly leading the charge in offshoaring to India. Investors are happy with the reduced costs.

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

#563

Post by blablabla123 »

delaminator wrote: post #543
blablabla123 wrote: post #533

Despite the flashy title that's the first "sober" analysis from a CEO I read about the technology. While not even really news, it's also worth mentioning that the energy requirements are impossible to fulfill Also now using ChatGPT intensely since months for all kinds of tasks and having tried Claude etc. None of this is on par with a human. The code snippets are straight out of Stackoverflow...

Your assessment of Claude simply isn’t true. Or Stackoverflow is really good. I’m producing multiple projects per week that are weeks of work each.

Sure but these are likely just variations of existing things. And yet the quality is still behind the original

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

#564

Post by jstummbillig »

written-beyond wrote: post #554
delaminator wrote: post #543

Earlier quoted context omitted.

Your assessment of Claude simply isn’t true. Or Stackoverflow is really good. I’m producing multiple projects per week that are weeks of work each.

I'm just as much of an avid llm code generator fan as you may be but I do wonder about the practicality of spending time making projects anymore. Why build them if other can just generate them too, where is the value of making so many projects? If the value is in who can sell it the best to people who can't generate it, isn't it just a matter of time before someone else will generate one and they may become better th…

The value is that we need a lot more software and now, because building software has gotten so much less time consuming, you can sell software to people that could/would not have paid for it previously at a different price point.

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

#565

Post by writebetterc »

koliber wrote: post #558

NOTE: People pointed out that it's $800 billion to cover interest, not $8 billion, as I wrote below. My mistake. That adds 2 more zeroes to all figures, which makes it a lot more crazy. Original comment below... $8 billion / US adult adult population of of 270 million comes out to about $3000 per adult per year. That's only to cover cost of interest, let alone other costs and profits. That sounds crazy, but let's thi…

You're saying $8 billion to cover interest, another commenter said 80, but the actual article says ""$8 trillion of CapEx means you need roughly $800 billion of profit just to pay for the interest". Eight HUNDRED billion. Where does the eight come from, from 90% of these companies failing to make a return? If a few AI companies survive and thrive (which tbh, sure, why not?) then we're still gonna fall face down into concrete.

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

#566

Post by baq »

hollerith wrote: post #372
mike50 wrote: post #370

Earlier quoted context omitted.

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?

Hardware was part of the service, obviously.

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

#567

Post by rc1 »

koliber wrote: post #558

NOTE: People pointed out that it's $800 billion to cover interest, not $8 billion, as I wrote below. My mistake. That adds 2 more zeroes to all figures, which makes it a lot more crazy. Original comment below... $8 billion / US adult adult population of of 270 million comes out to about $3000 per adult per year. That's only to cover cost of interest, let alone other costs and profits. That sounds crazy, but let's thi…

Nit: its $800 billion in interest, your comment starts with $8 billion

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

#568

Post by noobermin »

EagnaIonat wrote: post #524
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…

$800B, to be clear is the claim, not $80B.

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

#569

Post by piva00 »

lumost wrote: post #238
austin-cheney wrote: post #36

Earlier quoted context omitted.

It’s not about assumptions on the hardware. It’s about the current demands for computation and expected growth of business needs. Since we have a couple years to measure against it should be extremely straightforward to predict. As such I have no reason to doubt the stated projections.

Networking gear was famously overbought. Enterprise hardware is tricky as there isn’t much of a resale market for this gear once all is said and done. The only valid use case for all of this compute which could reasonably replace ai is btc mining. I’m uncertain if the increased mining capacity would harm the market or not.

BTC mining on GPUs haven't been profitable for a long time, it's mostly ASICs, GPUs can be used for some other altcoins which makes the potential market for used previous generation GPUs even smaller.

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

#570

Post by rsynnott »

bigwheels wrote: post #205
slashdave wrote: post #169

Earlier quoted context omitted.

5 years is long, actually. This is not a GPU thing. It's standard for server hardware.

Because usually it's more efficient for companies to retire the hardware and put in new stuff. Meanwhile, my 10-15 year old server hardware keeps chugging along just fine in the rack in my garage.

"Just fine". Presumably you're not super-concerned with the energy costs? People who run data centres pretty much _have_ to be.
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