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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

#681

Post by axegon_ »

bodge5000 wrote: post #675
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…

This is the exact kind of thinking that got us into this mess in the first place, and I'm not blaming you for it, it seems to be something all of us do to an extent. We don't look to Meta, who only a few years ago thought that the Metaverse would be the "next big thing" as an example of failure to identify the future, we look to IBM who made that mistake almost 30 years ago. Underestimating a technology seems to stic…

The amount of hate I've received here for similar statements is astonishing. What is even more astonishing is that it takes 3-rd grade math skills to work out that the current AI(even ignoring the fact that there is nothing intelligent about the current AI) costs are astronomical and they do not deliver on the promises and everyone is operating at wild loses. At the moment we are at "if you owe 100k to your bank, you have a problem but if you owe 100M to your bank, your bank has a problem". It's the exact same bullshitter economy that people like musk have been exploiting for decades: promise a ton, never deliver, make a secondary promise for "next year", rinse and repeat -> infinite profit. Especially when you rope in fanatical followers.

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

#682

Post by BoredPositron »

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…

Hot Hand Fallacy.

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

#683

Post by properbrew »

gloosx wrote: post #638
bloppe wrote: post #590

Earlier quoted context omitted.

Would you mind sharing some of these projects? I've found Claude's usefulness is highly variable, though somewhat predictable. It can write `jq` filters flawlessly every time, whereas I would normally spend 30 minutes scanning docs because nobody memorizes `jq` syntax. And it can comb through server logs in every pod of my k8s clusters extremely fast. But it often struggles making quality code changes in a large code…

It is always "I'm producing 300 projects in a nanosecond" but it's almost never about sharing or actually deploying these ;)

I also see a lot of this so I can't blame you for thinking it! See my other post about some projects build _only_ using LLMs.

https://news.ycombinator.com/item?id=46133458

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

#684

Post by rbanffy »

marliechiller wrote: post #557
carlmr wrote: post #529

Earlier quoted context omitted.

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.

> A failing company may still be right in identifying other companies failure modes. Agreed if this is what they are doing, but what if theyre spewing claims to try and discredit an industry in order to quell their shareholder concerns?

They are not the only ones looking at the money spent in AI datacentres and concluding most of the investment will not be recovered anytime soon.

A lot of the silicon being deployed is great for training, but inefficient for inference and the training to inference ratio for usage shows a clear tendency to go the inference way. Furthermore, that silicon, with the workloads it runs, doesn’t last long and needs replacement.

The first ones to go online might recover the investment, but the followers better have a plan to pivot to other uses.

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

#685

Post by rbanffy »

catwell wrote: post #665
Glemkloksdjf wrote: post #652

Earlier quoted context omitted.

For the fact that they invented Deep Blue, they are really struggling with AI

Their Granite family of models is actually pretty good! They just aren't working on the mainstream large LLMs that capture all the attention.

IBM is always very conscious of what their clients need (and the large consultancy business provides a very comprehensive view). It just turns out their clients don’t need IBM to invest in large frontier models.

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

#686

Post by fuzzfactor »

somenameforme wrote: post #484
stevenjgarner wrote: post #272

Earlier quoted context omitted.

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…

A big difference is that in the past things like the potential of the PC were somewhat widely underestimated. And then the internet was again as well. But in modern times it's rather the opposite scenario. The average entity is diving head first into AI simply expecting a revolutionary jump in capability that a more 'informed', for lack of any less snooty term, perspective would suggest is quite unlikely to occur any…

>things like the potential of the PC were somewhat widely underestimated.

The potential of the AI that comes within reach at maximum expenditure levels may just be more widely overestimated.

The potential to make "that much money" even more challenging.

A very opposite scenario.

I think so many corporations are looking at how expensive actual humans always have been, and can be sure will always be, so much so that it's a major cost item that can not be ignored. AI opens up the possibility of a whole new level of automation or outright replacement for the routine simple-minded tasks, to a degree that never existed before. More jobs could possibly be eliminated than previous waves of mechanical and digital automation.

When you do the business math, the savings could be enormous.

But you can only realistically save as much as you are actually wasting, otherwise if you go too far you shoot yourself in the foot.

Even with all that money to work with, if you're in practice hunkering down for savings because you can't afford real people any more, you surely can't say the sky's the limit. Not like selling PC's or anything that's capable of more unbridled growth.

When PC's arrived they flew off the shelf even at their high initial retail prices.

People in droves (but not the silent majority) are shunning free AI and the movement is growing with backlash in proportion to the foisting.

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

#687

Post by liampulles »

Hypothetically speaking, if the AI hype bubble pops (or just returns to normalcy), would it be profitable to retarget the compute towards some kind of crypto mining? If so, could we expect the cryptocurrency supply to soar and the price to tank in short succession?

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

#688

Post by busssard »

newsclues wrote: post #669
ReptileMan wrote: post #662

Earlier quoted context omitted.

The hdd being dead will surely come as a surprise to the couple of 12TB rusties spinning joyously in my case right now.

HDDs would be much more important today if flash storage didn’t exist.

did you know that SSD are not memory stable if they dont get electricity every now and again...

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

#689

Post by mistersquid »

bodge5000 wrote: post #675
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…

This is the exact kind of thinking that got us into this mess in the first place, and I'm not blaming you for it, it seems to be something all of us do to an extent. We don't look to Meta, who only a few years ago thought that the Metaverse would be the "next big thing" as an example of failure to identify the future, we look to IBM who made that mistake almost 30 years ago. Underestimating a technology seems to stic…

> We don't look to Meta, who only a few years ago thought that the Metaverse would be the "next big thing" as an example of failure to identify the future, we look to IBM who made that mistake almost 30 years ago.

The grandparent points to a pattern of failures whereas you point to Meta’s big miss. What you miss about Meta, and I am no fan, is that Facebook purchased Whatsapp and Instagram.

In other words, two out of three ain’t bad; IBM is zero for three.

While that’s not the thrust of your argument, which is about jumping on the problem of jumping on every hype train, the post to which you reply is not on about hype cycle. Rather, that post calls out IBM for a failure to understand the future of technology and does so by pointing to a history of failures.

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

#690

Post by ActionHank »

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…

Cool story, but it’s more than just the opinion of this CEO. It’s logic.

Hardware is not like building railroads, the hardware is already out of date once deployed and the clock has started ticking on writing off the expense or turning a profit on it.

There are fundamental discoveries needed to make the current tech financially viable and an entire next generation of discoveries needed to deliver on the over inflated promises already made.

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