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

#981

Post by jldugger » Sun, Dec 07, 2025, 6:41 PM UTC

evanjrowley wrote: post #786

mattlondon wrote: post #771

Earlier quoted context omitted.

Take this "sober" analysis with a big pinch of salt. IBM have totally missed the AI boat, and a large chunk of their revenue comes from selling expensive consultants to clients who do not have the expertise to do IT work themselves - this business model is at a high risk of being disrupted by those clients just using AI agents instead of paying $2-5000/day for a team of 20 barely-qualified new-grads in some far-off c…

Is this true in 2025? Asking because the biggest IT consulting branch of IBM, Global Technology Services (GTS), was spun off into Kyndryl back in 2021[0]. Same goes for some premier software products (including one I consulted for) back in 2019[1]. Anecdotal evidence suggests the consulting part of IBM was already significantly smaller than in the past. It's worth noting that IBM may view these AI companies as compet…

My go-to analysis for these sorts of places is net income per employee. Back in the day, IBM was hovering around $5,000. Today, Kyndryl is still around $5,000 (2025). But the parent company seems to be now at $22,000 (2024). For comparison: Meta is at $800,000, Apple is at $675,000, and Alphabet is at $525,000. And Wal-Mart, the nation's largest private employer, is around $9,250.

Now, probably part of that is just that those other companies hire contractors so their employment figure is lower than reality. But even if you cut the numbers in half, neither side of that spin off is looking amazing.

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

#982

Post by ProllyInfamous » Mon, Dec 08, 2025, 3:25 PM UTC

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

Background: I live within the US Federal Tennessee Valley Authority (TVA), a regional electric grid operator. The majority of energy is generated by nuclear + renewables, with coal and natural gas as peakers. Grid stability is maintained by among the largest batteries in the world, Racoon Mountain Pumped Storage Facility.

Three Gorges Dam is capable of generating more power than all of TVA's nuclear + hydro, combined. In the past decade, TVA's single pumped-storage battery has gone from largest GWh/capcity in the world to not even top ten — largest facilities are now in China.

µFission reactors have recently been approved for TVA commissioning, with locations unconfirmed (but about one-sixth the output of typical TVA nuclear site). Sub-station battery storage sites are beginning to go online, capable of running subdivisions for hours after circuit disconnects.

Tech-funded entities like Helios Energy are promising profitable ¡FusioN! within a few years ("for fifty years").

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All of the above just to say: +100GW over the next decade isn't that crazy a prediction (+20% current supply, similar in size to two additional Texas-es).

https://www.eia.gov/electricity/gridmonitor/dashboard/electr...

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

#983

Post by rbanffy » Tue, Dec 09, 2025, 12:29 PM UTC

mrwrong wrote: post #707

rbanffy wrote: post #692

Earlier quoted context omitted.

While AGI might be the Holy Grail, AI doesn’t need to be general human-level to be useful and profitable.

it just needs us to wait one more year right?

It's already quite useful. While not all AI service providers are profitable, I've worked on projects that saved a lot of money for the company - a lot more than it cost us running the servers.

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

#984

Post by rldjbpin » Wed, Dec 10, 2025, 10:25 AM UTC

the calculation, while simple, does make rational sense if all things remain equal.

regardless, given their past business decisions, this statement can be true for them without thinking about the bottom line.

the entire premise is enterprise compute amped to the max. the sheer expensive nature of the hardware and intensive resource requirements truly challenges what modern data centers can do today.

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

#985

Post by ojr » Thu, Dec 11, 2025, 7:20 PM UTC

dragonwriter wrote: post #635

ojr wrote: post #420

As long as the dollar remains the reserve currency of the world and US retains its hegemony, a lot of the finances will work itself out, the only threat to the US empire crumbling is by losing a major war or extreme civil unrest and that threat is astronomically low. The US is orders of magnitude stronger than the Roman Empire, I don't think people realize the scale or control.

> The US is orders of magnitude stronger than the Roman Empire This would be trivially true even if the US was currently in its death throes (which there is plenty of evidence that the US-as-empire might be, even if the US-as-polity is not), as the Roman Empire fell quite a while ago.

being pedantic doesn’t change the fact of what I said. If I said Obama is a better a leader than Julius Caesar, would you reply well actually, Julius Caesar is dead.