IBM CEO says there is 'no way' spending on AI data centers will pay off • Hacker News Board

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

#571

Post by randomNumber7 » Wed, Dec 03, 2025, 8:40 AM UTC

diziet wrote: post #165

atmavatar wrote: post #132

Earlier quoted context omitted.

The US federal budget in 2024 had outlays of 6.8 trillion dollars [1]. nVidia's current market cap (nearly all AI investment) is currently 4.4 trillion dollars [2][3]. While that's hardly an exact or exhaustive accounting of AI spending, I believe it does demonstrate that AI investment is clearly in the same order of magnitude as government spending, and it wouldn't surprise me if it's actually surpassed government s…

> NVIDIA's total annual revenue for its fiscal year 2025 (ended January 26, 2025) was $130.5 billion It is clearly not in the same order of magnitude

You need to look at turnover also.

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

#572

Post by koliber » Wed, Dec 03, 2025, 8:41 AM UTC

rc1 wrote: post #567

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

right. My goof. That adds two more zeroes across all the math. More crazy, but I think in the realm of "maybe, if we squint hard." But my eyes are hurting from squinting that hard, so I agree that it's just crazy.

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

#573

Post by [deleted] » Wed, Dec 03, 2025, 8:41 AM UTC

ta12653421 wrote: post #536

EagnaIonat wrote: post #524

Earlier quoted context omitted.

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…

>> There is even a recent paper that points out that LLMs will never become AGI. can you share a link?

[deleted]

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

#574

Post by koliber » Wed, Dec 03, 2025, 8:41 AM UTC

writebetterc wrote: post #565

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…

right. My goof. That adds two more zeroes across all the math. More crazy, but I think in the realm of "maybe, if we squint hard."

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

#575

Post by [deleted] » Wed, Dec 03, 2025, 8:42 AM UTC

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…

[deleted]

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

#576

Post by will4274 » Wed, Dec 03, 2025, 8:42 AM UTC

EagnaIonat wrote: post #553

ta12653421 wrote: post #536

Earlier quoted context omitted.

>> There is even a recent paper that points out that LLMs will never become AGI. can you share a link?

Took me a while to find again, as there are a lot of such papers in this area. https://www.arxiv.org/pdf/2511.18517

Is this AI paper written by a reputable subject matter expert? It seems to be written by a physicist and also be the only academic work by this author in English

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

#577

Post by esseph » Wed, Dec 03, 2025, 8:42 AM UTC

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…

Yet here they are at the front of Quantum Computing research

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

#578

Post by mkl » Wed, Dec 03, 2025, 8:43 AM UTC

EagnaIonat wrote: post #553

ta12653421 wrote: post #536

Earlier quoted context omitted.

>> There is even a recent paper that points out that LLMs will never become AGI. can you share a link?

Took me a while to find again, as there are a lot of such papers in this area. https://www.arxiv.org/pdf/2511.18517

A single author, in a physics department. Seems unlikely to be groundbreaking or authoritative.

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

#579

Post by esseph » Wed, Dec 03, 2025, 8:44 AM UTC

carlmr wrote: post #529

Aperocky wrote: post #522

Earlier quoted context omitted.

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.

IBM is not a failing company though, they are a Goliath in the Enterprise space.

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

#580

Post by blackenedgem » Wed, Dec 03, 2025, 8:46 AM UTC

monster_truck wrote: post #212

PunchyHamster wrote: post #177

Earlier quoted context omitted.

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

Seriously. 24/7 adds up faster than most realize! The idle wattage per module has shrunk from 2.5-3W down to 1-1.2 between DDR3 & DDR5. Assuming a 1.3W difference (so 10.4W for 8760 hours), a DDR3 machine with 8 sticks would increase your yearly power consumption by almost 1% (assuming avg 10,500kWh/yr household) That's only a couple dollars in most cases but the gap is only larger in every other instance. When I upg…

The one thing to be careful with Zen 2 onwards is that if your server is going to be idling most of the time then the majority of your power usage comes from the IO die. Quite a few times you'd be better off with the "less efficient" Intel chips because they save 10-20 Watts when doing nothing.