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Besides the tariffs added to buildout cost... > Investors are also growing wary of an overcapacity spike. As Bloomberg notes, tech giants including Microsoft a
by neilv 1y ago
Besides the tariffs added to buildout cost...
> Investors are also growing wary of an overcapacity spike. As Bloomberg notes, tech giants including Microsoft and Amazon have adjusted their data center strategies, in some cases pulling back on construction projects.
Is "overcapacity" concern here bundling up all the other effects of disruptions by the current administration?
And are there significant concerns about Stargate and OpenAI specifically, separate from those traceable to the administration or economy?
- rsynnott 1y agoEven before Trump's trade war, there was some pullback there. I'd assume that some of the hyperscalers are just getting nervous that the bubble may have peaked.
- tim333 1y agoI think a lot of the concern is OpenAI and others have provided LLMs cheap or free which has led to a large take up and a lot of demand for data center capacity. But at some point they'll have to charge something related to their costs which would reduce demand a fair bit leading to overcapacity. I'm guessing it'll go something like the fiber build out in the dot com boom. Huge build out up to 2000 using investor money with losses on the business, 2000-2005 companies go bust, restructured, 2005 on something like equilibrium between cost and income.