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Luke James Social Links Navigation Contributor Luke James is a freelance writer and journalist. Although his background is in legal, he has a personal interest in all things tech, especially hardware and microelectronics, and anything regulatory.
tennis2 Where is all the investment money coming from? That's my question. Even if we're only talking about the datacenters' hardware/infrastructure, this is a massive amount of money. Where is it being divested from? Reply
Eximo It isn't, borrowed against stock price collateral. A giant house of cards with the only real winner being the large capital firms getting the interest while it is still growing. They all think that they can find a way to make profit eventually. Reply
SomeoneElse23 I'm hoping the chat agents the public sees and uses aren't a good representation of the gazillions of dollars being poured into this "AI". There's either some nefarious about this, or incredibly dumb. Reply
redgarl AI will be the force generation of capital at the minute proper implementation will become a reality. When robotic will merge with AI, it will be over. We are talking about Defense industry, self-driving technologies, chemical research, medicine, health industry… basically any white collar and warehouse jobs. It is not about making money for now, but boosting efficiency and cutting cost, which is already a reality. We are talking about the biggest companies in the world, they are going to find a way to maintain their objectives to win the AI race, especially with the government backing them. Everyone denying it will be left in the dust. Reply
redgarl tennis2 said: Where is all the investment money coming from? That's my question. Most of the companies involved in the AI race are the biggest market cap companies anyway. The money is not an issue at all. OpenAI is backed by MS owning 27% of the company, not to mention OpenAI having a capital venture of 10% in AMD. These companies want to win the race because they know it will pay off in the future, like Amazon did 10-15 years ago. Unlike the dotcom bubble, the finances are solid, and products do exist. Reply
Eximo redgarl said: Most of the companies involved in the AI race are the biggest market cap companies anyway. The money is not an issue at all. OpenAI is backed by MS owning 27% of the company, not to mention OpenAI having a capital venture of 10% in AMD. These companies want to win the race because they know it will pay off in the future, like Amazon did 10-15 years ago. Unlike the dotcom bubble, the finances are solid, and products do exist. Yes, products exist. The problem is that EVERYONE is trying to be THE company with that product. A few are going to succeed, but a whole lot aren't. Acquisitions will absorb some of it, but a lot of people/investors/suppliers etc are not going to survive. A lot of successful companies came out of the dotcom bubble, but a lot didn't, and they are the source of concern. Reply
redgarl chaz_music said: AI can already make stock market decisions and buy up food futures… You are… so LATE to it… automation tools are already used for decades and don't involve AI. That's why you see bear markets, like 3 weeks ago, being so bipolar. You are just trying to find something to help your narrative. Matter of fact, AI is there to stay and it will get better and better at a faster rate than the adoption of the smart phone. I am already using it all the time instead of doing searches because it provides me links I can verify and offer me a good inquiry above 80% of the time. I was looking at buying a car and I investigated if the engine was reliable. I was able to find if there was recalls, reports and life expectancy of vehicles hosting the engine easily. In 5 minutes, I found more information then if I searched for 2 hours. And this is only for information amalgamation. Just look at what is happening with image recognition and generation lately. All content creators in the industry, either hollywood, game studios or social medias, are all having to face the reality that the technology is forcing them to adapt radically. We are not even talking about Defense, Robotics and Security. I can anticipate what to expect in 10 years. It is going to be a brutal shift. The Ukrainian war has shown us that Modern Warfare is shifting everything that was the standard of the industry. I cannot really understand people denying it beside pure denial and bias toward repercussion linked to their hobby as PC builders. Reply
redgarl Eximo said: Yes, products exist. The problem is that EVERYONE is trying to be THE company with that product. A few are going to succeed, but a whole lot aren't. Acquisitions will absorb some of it, but a lot of people/investors/suppliers etc are not going to survive. A lot of successful companies came out of the dotcom bubble, but a lot didn't, and they are the source of concern. If you want to have the pulse of the industry, you need to check at the semiconductor industry. Everything is in high demand. Waffer, GPUs, Memory, CPUs, server, storage… it is all there and all obvious. What is funny about the whole bubble theory, is that it is coming from SHORTERS who are betting against the technology. Matter of fact is those companies are the biggest money maker in the world. It is not BS money. They are investing in each others because there is an American and Chinese forefront for the AI race. Also, their intend are different. Some are focusing on software, other hardware, some want to maintain a Close ecosystem, others are working for implementing an Open ecosystem. What we are seeing is a vertical integration instead of the usual horizontal expansion. The only thing people are having for argument is the circular aspect of the transactions, which is going against the circular nature of the economy anyway. Money is not created, it is distributed, unless the government is printing money. I don't see the logic behind it beside a bunch of shorters trying to influence and manipulate the markets. They even stated that life cycling of hardware should be around 24 months, which is ludicrous for datacenters, but they are spreading their misconceptions because they are bias to make their narratives with huge money implication for a bet against the markets. Reply
Eximo redgarl said: If you want to have the pulse of the industry, you need to check at the semiconductor industry. Everything is in high demand. Waffer, GPUs, Memory, CPUs, server, storage… it is all there and all obvious. What is funny about the whole bubble theory, is that it is coming from SHORTERS who are betting against the technology. Matter of fact is those companies are the biggest money maker in the world. It is not BS money. They are investing in each others because there is an American and Chinese forefront for the AI race. Also, their intend are different. Some are focusing on software, other hardware, some want to maintain a Close ecosystem, others are working for implementing an Open ecosystem. What we are seeing is a vertical integration instead of the usual horizontal expansion. The only thing people are having for argument is the circular aspect of the transactions, which is going against the circular nature of the economy anyway. Money is not created, it is distributed, unless the government is printing money. I don't see the logic behind it beside a bunch of shorters trying to influence and manipulate the markets. They even stated that life cycling of hardware should be around 24 months, which is ludicrous for datacenters, but they are spreading their misconceptions because they are bias to make their narratives with huge money implication for a bet against the markets. I see you are focusing on the semi-conductor industry. That puts your posts in a different light. They will do quite well regardless, because they can easily shift gears to the next desirable hardware product, along with established markets. Though there will be a period when their biggest competitor is their own used hardware being available. The worry is all the companies over-leveraging themselves to buy that hardware. When that bubble bursts, we well have general economic fallout. Yes, some people who invest in the right companies will win, but lots of people will not. You are right, it is wealth transfer. But lots of losers and only a few winners does not a healthy economy make. 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/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/ibm-ceo-warns-trillion-dollar-ai-boom-unsustainable-at-current-infrastructure-costs#main
- https://www.tomshardware.com
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Informational only. No financial advice. Do your own research.