Dot com era crash on the cards for AI datacenter spending? It's a 'risk' Those who ignore history are destined to repeat mistakes of the past and, with signs of an inflating bit barn spending bubble, comparisons are being made with the infamous dotcom bust a quarter of a century ago. Rather more recently, Synergy Research Group said in January that mergers and acquisitions of datacenter businesses …
When projects cannot point to a business case for their investments, I would hesitate to invest.
During the dot.com bubble, it was not so much the Internet that didn't deliver, but 99% of the investment opportunities were unable to come up with a way to earn money. They didn't known it when they started, and they didn't find it when they had to deliver.
I see the same now. Massive amounts of money are invested into AI projects that have no clue who will pay them for what products. Some will find a market and become the next Google or Amazon. the other 999 (or 9999+) will vanish. Most of the big data centers will go the way of SUN when their gear is not required anymore.
" I would hesitate to invest"
Worth noting that many early stage investors are not in it for the long term, and really, honestly don't care about the long term viability (or otherwise). All they want is to invest a shed-load of cash in a startup run by a handful of geeks, and then to offload that as soon as possible in exchange for the three to ten shed-loads of cash. Obviously this requires a bullish market, and a good supply of credulous mid-stage investors who haven't spotted that most AI investments will go to the wall.
Easy money! No business plan required, no credible product required, no customers required. Which makes me wonder if Liz Holmes is out of clink yet, because her expertise in this area would be useful? Maybe the Orange Felon can issue a presidential pardon - come on MAGA loons, communicate with his Orangeness on "Truth Social" and make it so!
There are some use cases for "AI", like my camera's intelligence where it mostly correctly recognises things and sets up the shot accordingly. Or the photo editor where I can remove things in a way that isn't too horrible - including entire people. It's not perfect but it can do a better job that I could in a fraction of a second.
For the LLMs, it's a toy mostly. Various images from textual prompts that might sort of resemble what you envisaged. It's a quick way to make little images to drop into blog posts to jazz things up a bit. Or a chat bot that sort of gives an answer in the ballpark of correct, if not actually correct. But, then, a few minutes trawling StackOverflow would result in much the same.
It's a fun thing to play with, but I use free offerings with the implied restrictions because fun doesn't justify paying because it isn't a necessity. Therefore, what's the actual business case to justify the vast amounts being spent on hardware and electricity?
> like my camera's intelligence where it mostly correctly recognises things and sets up the shot accordingly.
But that is really not "AI" as we are talking about here, more a fancy chip and some software programming in your camera ....unless of course it has to connect to the cloud before every shot !
Same with photo editing, that sort of stuff has been around for ages.
Although there are a lot of parallels, I wouldn’t compare Ai to the Dot Com Bubble.
During the Dot Com Bubble era, The power was in the hands of a much broader demographic of people. It was much more democratized. People were using the internet to create.
Ai tech is ruled and powered by Big Businesses and their goal is deception (machines pretending to be human) and manipulation to enable monetization. Including replacing human workers with Ai whenever possible. Also, no one was forcing people to adopt the internet or use a specific site or tech back then. Adoption was organic.
In this Ai “situation” we are finding ourselves in, much of the public is actively rejecting the use of Ai. So much so that companies like Google are seeing that not many people were willing to pay for their Ai as a stand alone product. So rather than let the product-that-no-one-wants die on the vine through free market natural selection, they force it on its Google Workspace Subscribers and raise their subscription rates. It’s also forced on the free tier so that Google can essentially use Ai to Hoover-Up more data stored in user’s Spreadsheets and stored documents. This is the way of things now. Demand isn’t coming from the consumer, it’s coming from the supplier.
I am all for using Ai trained on vetted data to use for scientific research and medical diagnosing, etc. But training Ai on garbage internet data in an effort to imitate humans and manipulate them accordingly to make a profit is a bubble that I hope pops before dividing the world into two groups; the ultra rich and the ultra poor.
Market hype is market hype. Bubbles are bubbles.
Often it's wrong to compares apples to oranges, but bubbles in the apple market or orange market are still bubbles. Splitting hairs does not change that.
As for using it for oppression and deception and dependency, yeah, we do not need more of that from the tech douche bros
One sign of being in a bubble, is people trying to explain why it isn't the same as before - the dot com bubble was because of too much money invested chasing herds of unicorns, this time it is different they are only chasing a very few unicorns, troble with unicorns is they are as rare as rocking horse shit. When the crash happens you won't see the big players vanish, but behind the scenes the fallout will damage them and hit their workers and supply chains. I suspect we may even have had the trigger for the bubble popping with the uncertainty around trade.
There's going to be a massive boom in European data centres, but not because of AI, it's because of Trump.
Europe is slowly waking up to the realisation that it's entirely dependent on US organisations for cloud compute, a situation that will have to be undone rapidly as Trump can, and will, shut off whomever he wants. Are you running your infrastructure on AWS and you're in a fight with Trump? All it takes is for the US administration to issue sanctions against your organisation and insist on enforcement through the courts for your entire infrastructure to come crashing down.
Expect over the next 3-6 months to see european governments and organisations ban purchasing critical supporting services from US based suppliers. It's a risk that can no longer be hidden.
Just because so many people fail to understand it is not actually "intelligence", or an oracle.
It is a statistical model spitting back what you've made it ingest, based on the proximity with what you've asked.
No-one will pay as much as bubble makers think they will.
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