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Jowi Morales is a tech enthusiast with years of experience working in the industry. He\u2019s been writing with several tech publications since 2021, where he\u2019s been interested in tech hardware and consumer electronics. ","collapsible":{"enabled":true,"maxHeight":250,"readMoreText":"Read more","readLessText":"Read less"}}), "https://slice.vanilla.futurecdn.net/13-4-25/js/authorBio.js"); } else { console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); } Jowi Morales Social Links Navigation Contributing Writer Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.
vanadiel007 I think any sane person understands that investments of this magnitude can only continue if there is a profit margin involved. This cannot continue based on possible profit in the future. Even the largest investors with very deep pockets will eventually stop investing if this does not pay off. Reply
ezst036 vanadiel007 said: I think any sane person understands that investments of this magnitude can only continue if there is a profit margin involved. This cannot continue based on possible profit in the future. Even the largest investors with very deep pockets will eventually stop investing if this does not pay off. It has legs because of our jobs they keep destroying. Many of those jobs will simply never return. Whole careers vanished, permanently. Reply
JamesJones44 There is basically no end in sight for the growth in capex Yeah, there is. A lot of these companies have started to go cashflow negative. That means they won't have the cash on hand and are going to have to start issuing debt via bonds to continue the build out at the current rate. Those bonds will further strain cashflow due to interest payments. Either they decide their business will be borked by all the debt and slow spending voluntarily to try to correct it or they won't be able issue debt anymore because their credit rating is causing massive interest payments on the debt that bound buyers won't believe can be paid. Either way, this pace can't continue forever and anyone with a simple understanding of business finance can see that. I'm not saying it will end tomorrow, but in 18 to 36 months I would put money down in Kalshi/Vegas that companies slow spending due to worsening cashflow issues Reply
JimHH WHY?! We already know that this Second Wave of AI R&D Statistical Learning] is and will remain _insufficient_ to accurately emulate human cognition. Yes, of course such models are still useful, but we _know_ they are fundamentally, systemically flawed. We should be investing one-tenth this amount into laying the foundations for the necessary Third Wave Contextual Adaptation] which is not based on 2nd Wave, any more than LLMs are based on First Wave Handcrafted Knowledge] systems. This hypestorm is insane. Our first AI winter was hard enough to work through, if you remember. The blowback when this fails to meet all the hype will dwarf those bad years, probably for _decades_ to come! Truly insane and a waste of time, effort, and credibility for this vital field of research. DARPA: -O01G3tSYpU View: https://www.youtube.com/watch?v=-O01G3tSYpU UPDATE: OPFSXSZmeOQ View: https://www.youtube.com/watch?v=OPFSXSZmeOQ Reply
timsSOFTWARE A couple years ago, when the claims were being made – and a lot of people believed – that "the singularity" would be achieved in 18 months and nothing else would matter after that, it sort of made sense. Ie., if everything else is going away in a year and a half, whatever it costs it's probably not too much. But as time has gone on, it's become clear that reality is different – but the spending has continued. Reply
Stomx Big Tech does not care is it 1 Trillion or 10. It is you and me who eventually pay for all that, not Big Tech companies which are all public companies. They just issue stocks and all lend them their money. And if they fail it is you and me who will lose our finances. Not clear now what will happen if they win, could be that the whole humanity will lose even more Reply
DougMcC JamesJones44 said: Yeah, there is. A lot of these companies have started to go cashflow negative. That means they won't have the cash on hand and are going to have to start issuing debt via bonds to continue the build out at the current rate. Those bonds will further strain cashflow due to interest payments. Either they decide their business will be borked by all the debt and slow spending voluntarily to try to correct it or they won't be able issue debt anymore because their credit rating is causing massive interest payments on the debt that bound buyers won't believe can be paid. Either way, this pace can't continue forever and anyone with a simple understanding of business finance can see that. I'm not saying it will end tomorrow, but in 18 to 36 months I would put money down in Kalshi/Vegas that companies slow spending due to worsening cashflow issues It will depend on whether they can make back any of their investment. Microsoft went from dropping 11B two quarters back to 2B on an 8B quarterly revenue increase. Alphabet dropped 6B but that's their first negative ever and they have 100+ B to spare. Meta 'only' added 9B in cash and has 80+B. All 3 companies can reasonably sustain these data center investment paces for 5+ years without breaking a sweat, even if we assume the market would not allow them any equity raise. The only real threat to the AI bubble is a technical breakthrough undermining the compute or memory demand. Reply
Zaranthos So much doom and gloom here. I'm having a lot of fun with AI and I can't wait for more and more improvements. Reply
CelicaGT Zaranthos said: So much doom and gloom here. I'm having a lot of fun with AI and I can't wait for more and more improvements. Fun doesn't pay the bills. AI is fine, it's the business model that's unsustainable. Many seem to confuse that when the naysayers say nay. Collectively AI companies owe investors around 2.4 trillion USD and NONE of them have turned a dime into the black. It cannot continue. Reply
USAFRet Zaranthos said: So much doom and gloom here. I'm having a lot of fun with AI and I can't wait for more and more improvements. How much actual $$ do you personally contribute back into the AI collective? Reply
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/big-tech/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/big-tech/big-tech-spends-more-than-usd1-trillion-on-ai-infrastructure-additional-usd745-billion-expected-to-be-added-to-the-figure-in-2026-alone#main
- https://www.tomshardware.com/membership
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Informational only. No financial advice. Do your own research.