It’s objectively a bad thing when a country’s entire economy is being propped up by seven companies and the vast majority of consumer spending is concentrated in the top 1%.
The most optimistic take I’ve seen: AI is a drain on the entire economy that sucks up all investment and this is why the rest of the economy is basically in a recession. Once the bubble pops, investors will flood back into the real economy and correct the problem.
I’ll play devil’s advocate here: agreed that the rest of the (US) economy seems to be slowing or shrinking but remains buoyed by AI / Mag 7 stocks. That said, a lot of the investment reflected above is in data centers and hardware (Nvidia, Coreweave, Oracle, Microsoft).
The bubble pop will hinge on whether there is value in this data center buildup beyond AI. Unless everyone starts paying fistfulls of cash for AI chat, these companies may be able to find another use for all that compute and avoid a total crash. That could be a target for all that investment you mention.
The hardware is specialized for chatbots, it’s not just something they can plug-and-play for other use cases. That means using it for other computing tasks is even less efficient per kWh and per litre of water, which will make it hard to justify the resource requirements.
Surely some of this hardware can find new life, but assets will be stranded.
It’s objectively a bad thing when a country’s entire economy is being propped up by seven companies and the vast majority of consumer spending is concentrated in the top 1%.
The most optimistic take I’ve seen: AI is a drain on the entire economy that sucks up all investment and this is why the rest of the economy is basically in a recession. Once the bubble pops, investors will flood back into the real economy and correct the problem.
I’m not optimistic.
I’ll play devil’s advocate here: agreed that the rest of the (US) economy seems to be slowing or shrinking but remains buoyed by AI / Mag 7 stocks. That said, a lot of the investment reflected above is in data centers and hardware (Nvidia, Coreweave, Oracle, Microsoft).
The bubble pop will hinge on whether there is value in this data center buildup beyond AI. Unless everyone starts paying fistfulls of cash for AI chat, these companies may be able to find another use for all that compute and avoid a total crash. That could be a target for all that investment you mention.
The hardware is specialized for chatbots, it’s not just something they can plug-and-play for other use cases. That means using it for other computing tasks is even less efficient per kWh and per litre of water, which will make it hard to justify the resource requirements.
Surely some of this hardware can find new life, but assets will be stranded.
Hahaha this is fine, I am fine with this, what could possibly go wrong
Yep it’s such a fragile situation