It's been amazing to watch how tone-deaf these AI "thought leaders" and CEO's have been during this hype cycle.
"look, we made this thing that's going to put everyone out of work, or destroy 99% of the planet except those of us who have built bunkers, leveraged a massive bet on the entire economy over it, if we're wrong we get bailed out by YOU, and guess what, it's coming to a neighborhood near you!"
and they are surprised at the backlash or that people are tossing molotovs at them? It's just crazy to me the kind of bubble one must live in to not see this coming from a mile away.
I dunno, I think it's mainly because people don't like them, and that's mainly about the first point and the general perception of inequality in the economy. It's a bit hard to argue against that, regardless of how strong your position is.
(IMO the environmental impact of datacenters has been pretty overblown. Water usage is a concern in some places for some datacenters but it's really not a big issue for most of them, the main thing that has some merit on a larger scale is the electricity demand, but the concerns are largely around very optimistic projections of growth of datacenters, not how much they are using today)
Cosmetics market is roughly the size of data centers. Doesn’t seem to be destroying the planet despite using comparable amount of water and orders of magnitude more chemicals.
Other than this being a poor comparison, I’m not stating I actually believe this is true, but sam altman, dario, many other tech execs have repeatedly stated they believe a hyper intelligent AI is a threat to all of humanity. The tone deafness to it is saying that and then following it up with, “let’s now put trillions in investment to it in your backyard.”
Whether or not you believe they are being genuine or this is true is irrelevant. Either a) they’re full of shit, so why should I believe you have my best interests in mind when you build this big datacenter, or b) you’re not full of shit, and also why should I believe you have my best interests in mind when you’re building the thing you’re saying will end us all, and especially people like me?
I think a lot of people out there are being manipulated about things that they don't understand.
I saw some comments from people against a proposed data center at the site of an old power plant. I pointed out that it was a mile from anything. Someone replied saying that that was still too close, and that they wouldn't want to live 50 miles from a data center.
In every good market crash, there's a flash point. In 2008, it was the Lehman Bros collapse and congress refusing the initial bailout. This might be the flashpoint, 75 data centers blocked this year and a supermajority of Americans against their construction.
If stopped before construction, the organizations funding the data centers still have the investment funds and can build in a different location or, worst case, give the money back to investors.
Assuming demand keeps up, owners of already-existing data centers continue to get windfall profits.
It would be like what happens when housing prices go up due to lack of supply.
So much of the current bubble is predicated on the hype train continuing on its current trajectory. If anything lags behind, the bubble deflates.
For one potential path - Less datacenter construction means less GPUs, so less $$$ for Nvidia, which means less for them to spread around to prop up the LLM industrial complex, which means lower valuations, which means OpenAI and Anthropic can't get their trillion dollar valuations, which means VC's race for the exit to cash out, etc, etc.
OpenAI, Anthropic, Google selling equity for the first time since their IPO, all of the downstream consumers of the frontier labs. NVIDIA is perhaps the only one profiting from actually selling something. Who hits a liquidity event before the house of cards blows over?
The original claim was "Their debt load and infrastructure costs compared to their relatively meager earnings..." which is just obviously not applicable to Google and NVIDIA, which both crank out more than $100 billion per year in profits. They can literally take on almost a trillion dollars each in debt to finance data centers and still be in reasonably good financial shape.
OpenAI and Anthropic are not very profitable (yet!), but rely mostly on equity financing, not debt. So no debt load issue there either.
Google search only dies if AI wins, in which case there's no shortage of demand for tokens. NVIDIA's revenue just doubled year-over-year; even if token demand cools off and they slow to say 25% growth, they'll be fine.
OpenAI and Anthropic not making money would be sad for their shareholders, but that's sort of a different topic from whether the "debt load" you originally cited will be any kind of a systemic problem (it won't).
A bubble is a debt-fueled run-up in asset prices driven by over-optimistic projections of future fundamental value.
The housing bubble was people borrowing money (debt-fueled) to buy ever more expensive houses (rising asset prices) on the assumption home values would always keep going up (projection of future value).
'90s tech bubble was similar.
Where are you seeing that now? Which asset is over-valued?
People don't want them stopped entirely, they just want some kind of reasonable tradeoff or restrictions. The current government just doesn't care or listen at all. Just say "we hear you, here's what we are doing about your concerns" instead of silence or "fuck you, deal with it".
Here I was thinking it will be somewhere between next-generation Nvidia chips, and inability to get ROI before the end of relatively quick GPU depreciation schedules.
Carbon taxes are a tough sell, but I bet a carbon tax specifically on data centers would pass.
It's been amazing to watch how tone-deaf these AI "thought leaders" and CEO's have been during this hype cycle.
"look, we made this thing that's going to put everyone out of work, or destroy 99% of the planet except those of us who have built bunkers, leveraged a massive bet on the entire economy over it, if we're wrong we get bailed out by YOU, and guess what, it's coming to a neighborhood near you!"
and they are surprised at the backlash or that people are tossing molotovs at them? It's just crazy to me the kind of bubble one must live in to not see this coming from a mile away.
I dunno, I think it's mainly because people don't like them, and that's mainly about the first point and the general perception of inequality in the economy. It's a bit hard to argue against that, regardless of how strong your position is.
(IMO the environmental impact of datacenters has been pretty overblown. Water usage is a concern in some places for some datacenters but it's really not a big issue for most of them, the main thing that has some merit on a larger scale is the electricity demand, but the concerns are largely around very optimistic projections of growth of datacenters, not how much they are using today)
Cosmetics market is roughly the size of data centers. Doesn’t seem to be destroying the planet despite using comparable amount of water and orders of magnitude more chemicals.
Other than this being a poor comparison, I’m not stating I actually believe this is true, but sam altman, dario, many other tech execs have repeatedly stated they believe a hyper intelligent AI is a threat to all of humanity. The tone deafness to it is saying that and then following it up with, “let’s now put trillions in investment to it in your backyard.”
Whether or not you believe they are being genuine or this is true is irrelevant. Either a) they’re full of shit, so why should I believe you have my best interests in mind when you build this big datacenter, or b) you’re not full of shit, and also why should I believe you have my best interests in mind when you’re building the thing you’re saying will end us all, and especially people like me?
I think a lot of people out there are being manipulated about things that they don't understand.
I saw some comments from people against a proposed data center at the site of an old power plant. I pointed out that it was a mile from anything. Someone replied saying that that was still too close, and that they wouldn't want to live 50 miles from a data center.
We are 20 miles from Ashburn.
> Meta CEO Mark Zuckerberg is positioning himself as a positive voice on AI
Given Meta's (and also Mark's) reputation, I wonder how much that is helping the cause and how much its opponents...
In every good market crash, there's a flash point. In 2008, it was the Lehman Bros collapse and congress refusing the initial bailout. This might be the flashpoint, 75 data centers blocked this year and a supermajority of Americans against their construction.
If stopped before construction, the organizations funding the data centers still have the investment funds and can build in a different location or, worst case, give the money back to investors.
Assuming demand keeps up, owners of already-existing data centers continue to get windfall profits.
It would be like what happens when housing prices go up due to lack of supply.
Why would this cause a market crash? A supply crunch in AI will push prices up.
Curiously, Richard Fuld, who was the CEO/chairman of Lehman Brothers, now invests in datacenters.
Him and literally everyone else with investable money.
So much of the current bubble is predicated on the hype train continuing on its current trajectory. If anything lags behind, the bubble deflates.
For one potential path - Less datacenter construction means less GPUs, so less $$$ for Nvidia, which means less for them to spread around to prop up the LLM industrial complex, which means lower valuations, which means OpenAI and Anthropic can't get their trillion dollar valuations, which means VC's race for the exit to cash out, etc, etc.
What specifically is the bubble you're talking about? Like which asset is seeing a runaway increase in valuation detached from fundamental value?
Their debt load and infrastructure costs compared to their relatively meager earnings and widespread public distrust is concerning, no?
Who is "they"? NVIDIA? Google? Anthropic?
OpenAI, Anthropic, Google selling equity for the first time since their IPO, all of the downstream consumers of the frontier labs. NVIDIA is perhaps the only one profiting from actually selling something. Who hits a liquidity event before the house of cards blows over?
The original claim was "Their debt load and infrastructure costs compared to their relatively meager earnings..." which is just obviously not applicable to Google and NVIDIA, which both crank out more than $100 billion per year in profits. They can literally take on almost a trillion dollars each in debt to finance data centers and still be in reasonably good financial shape.
OpenAI and Anthropic are not very profitable (yet!), but rely mostly on equity financing, not debt. So no debt load issue there either.
Oh, wonderful! OpenAI and Anthropic's structural inability to earn a return for there investors should be no problem.
What is NVIDIA's outlook should their customers' funding run out? Or what's the long tail outlook on Google killing its search product?
Google search only dies if AI wins, in which case there's no shortage of demand for tokens. NVIDIA's revenue just doubled year-over-year; even if token demand cools off and they slow to say 25% growth, they'll be fine.
OpenAI and Anthropic not making money would be sad for their shareholders, but that's sort of a different topic from whether the "debt load" you originally cited will be any kind of a systemic problem (it won't).
Onward to robot god nirvana, the dead red rock in the sky and all that then.
... All of it? Does a bubble need to be confined to one vertical? It seems like The Bubble is just the sum of a bunch of other individual bubbles.
A bubble is a debt-fueled run-up in asset prices driven by over-optimistic projections of future fundamental value.
The housing bubble was people borrowing money (debt-fueled) to buy ever more expensive houses (rising asset prices) on the assumption home values would always keep going up (projection of future value).
'90s tech bubble was similar.
Where are you seeing that now? Which asset is over-valued?
Spacex for one. An AI company they say.
People don't want them stopped entirely, they just want some kind of reasonable tradeoff or restrictions. The current government just doesn't care or listen at all. Just say "we hear you, here's what we are doing about your concerns" instead of silence or "fuck you, deal with it".
Here I was thinking it will be somewhere between next-generation Nvidia chips, and inability to get ROI before the end of relatively quick GPU depreciation schedules.
Stopped in an election year. I suspect some politicians may change their minds come December.
[dead]