5 ms·

The biggest problem is the infrastructure left behind from the Dotcom boom that laid the path for the current world (the high speed fiber) doesn't translate to

The biggest problem is the infrastructure left behind from the Dotcom boom that laid the path for the current world (the high speed fiber) doesn't translate to computer chips. Are you still using intel chips from 1998? And the chips are such a huge cost, and being backed by debt but they depreciate in value exponentially. It's not the same because so much of the current debt fueled spending is on an asset that has very short shelf life. I think AI will be huge, I don't doubt the endgame once it matures. But the bubble now, spending huge amounts on these data centers using debt without a path to profitability (and inordinate spending on these chips) is dangerous. You can think AI will be huge and see how dangerous the current manifestation of the bubble is. A lot of people will get hurt very very badly. This is going to maim the economy in a generational way.

hibikir 1y ago
If you look at year over year chip improvements in 2025 vs 1998, it's clear that modern hardware just has a longer shelf life than it used to. The difficulties in getting more performance for the same power expenditure are just very different than back in the day. There's still depreciation, but it's not the same. Also look at other forms of hardware, like RAM, and the bonus electrical capacity being built.
- lomase 1y ago
  In 1998 to transfer a megabyte over telephone lines was expensive and 5 years later is was almost free. I have not seen the prices of GPUs, CPU or RAM going down, on the contrary, each day it gets more expensive.
  - lemonlearnings 1y ago
    But why not measure $ per intelligence. In 2020 you'd need a billion dollars to get your computer to write good code, now it is practically free.
  - fragmede 1y ago
    In 1998, 16 MiB of RAM was ~$200, in 2025, 16 GiB of ram is about $50. A Pentium II in 1998 at 459 MHz was $600. Today, a AMD Ryzen 7 9800X can be had for $500. That Ryzen is maybe 100 times as powerful as the Pentium II. What's available at what price point has changed, but it's ridiculous how much computing I can get for $150 at Best Buy, and it's also ridiculous how little I can do with that much computing power. Wirth’s law still holds: software is getting slower more rapidly than hardware is getting faster.
rhetocj23 1y ago
Personally I think people should stop trying to reason from the past. As tempting as it is, it leads to false outcomes because you are not thinking about how this particular situation is going to impact society and the economy. Its much harder to reason this way, but isnt that the point? personally I dont want to hear or read analogies based on the past - I want to see and read stuff that comes from original thinking.
- munk-a 1y ago
  Doesn't that line of reasoning leave you in danger of being largely ignorant? There's a wonderful quote from Twain "History doesn't repeat itself but it often rhymes" there are two critical things I'd highlight in that quote - first off the contrast between repetition and rhyming is drawing attention to the fact that things are never exactly the same - there's just a gist of similarities - the second is that it often but doesn't always rhyme - this sure looks like a bubble but it might not be and it might be something entirely new. _That all said_ it's important to learn from history because there are clear echoes of history in events because we, people in general, don't change that fundamentally.
- deleted 1y ago
  [deleted]
- rootusrootus 1y ago
  IME the number of times where people have said "this time it's different" and been wrong is a lot higher than the number of times they've said "this time is the same as the last" and been wrong. In fact, it is the increasing prevalence of the idea that "this time it's different" that makes me batten down the hatches and invest somewhere with more stability.
- rhetocj23 1y ago
  With all due respect, Im not here to teach people how to think. This guy gets it - https://www.youtube.com/watch?v=kxLCTA5wQow https://www.youtube.com/watch?v=kxLCTA5wQow Instead of plainly jumping on the bubble bandwagon he actually goes through a thorough analysis.
hx8 1y ago
A lot of the infrastructure made during the Dotcom boom was shortly discarded. How many dial-up modems were sold in the 90s? The current AI bubble is leading to trained models that won't be feasible to retrain for a decade or longer after the bubble bursts.
- zerosizedweasle 1y ago
  The wealth the Dotcom boom left behind wasn't in dial up modems or internet over the telephone, it was in the huge amounts of high speed fiber optic networks that were laid down. I think a lot of that infrastructure is still in use today, fiber optic cables can last 30 years or more.
  - triceratops 1y ago
    > fiber optic cables can last 30 years or more The trenches for the cables even longer than that.
  - deleted 1y ago
    [deleted]
  - ecommerceguy 1y ago
    How much of it is still dark?
- yeasku 1y ago
  Honestly, not that many people had modems.
  - jorts 1y ago
    In the late 90s to 2001? Many people were still using modems at that time. Cable or DSL wasn't even an option for a considerable percentage of the population.
    - yeasku 1y ago
      In 2000 6% of the population had access to internet. In 2002 I was woking making webs and setting up linux servers and I did not have internet at home.
simonw 1y ago
That's true for the GPUs themselves, but the data centers with their electricity infrastructure and cooling and suchlike won't become obsolete nearly as quickly.
- davnicwil 1y ago
  this is a good point, and it would be interesting to see the relative value of this building and housing 'plumbing' overhead Vs the chips themselves. I guess another example of the same thing is power generation capacity, although this comes online so much more slowly I'm not sure the dynamics would work in the same way.
  - SoftTalker 1y ago
    The data centers built in 1998 don't have nearly enough power or cooling capacity to run today's infrastructure. I'd be surprised if very many of them are even still in use. Cheaper to build new than upgrade.
    - bialpio 1y ago
      How come? I'd expect that efficiency gains would lower power and thus cooling demands - are we packing more servers into the same space now or losing those gains elsewhere?
      - alchemism 1y ago
        Yes - blades-of-servers replacing what was 2 or 3 rack mount servers. Both air exchange and power requirements are radically different in order to fill that rack as it was before.
      - fc417fc802 1y ago
        It's just an educated guess, but I expect that power density has gone up quite a bit as a form of optimization. Efficiency gains permit both lower power (mobile) and higher compute (server) parts. How tightly you pack those server parts in is an entirely different matter. How many H100s can you fit on average per 1U of space?
wmf 1y ago
They're only replacing GPUs because investors will give "free" money to do so. Once the bubble pops people will realize that GPUs actually last a while.
bilsbie 1y ago
We don’t have moores law anymore. Why are the chips obseleting so quickly?
- myhf 1y ago
  FLOP/s/$ is still increasing exponentially, even if the specific components don't match Moore's original phrasing. Markets for electronics have momentum, and estimating that momentum is how chip producers plan for investment in manufacturing capacity, and how chip consumers plan for deprecation.
- o11c 1y ago
  They kind of aren't. If you actually look at "how many dollars am I spending per month on electricity", there's a good chance it's not worth upgrading even if your computer is 10 years old. Of course this does make some moderate assumptions that it was a solid build in the first place, not a flimsy laptop, not artificially made obsolete/slow, etc. Even then, "install an SSD" and "install more RAM" is most of everything. Of course, if you are a developer you should avoid doing these things so you won't get encouraged to write crappy programs.
ch4s3 1y ago
There are probably a lot of cool and useful things you could do with a bunch of data centers full of GPUs. - better weather forecasts - modeling intermittent generation on the grid to get more solar online - drug discovery - economic modeling - low cost streaming games - simulation of all types
- amatecha 1y ago
  - cloud gaming service? :D
  - mort96 1y ago
    Eh not really. Maybe retro cloud gaming services. But games haven't stopped getting more demanding every year. Not only are the AI GPUs focused on achieving clusters with great compute performance per watt and dollar rather than making singular GPUs with great raster performance; even the GPUs which are powerful enough for current games won't be powerful enough for games in 5 years. Not to mean that we're still nowhere near close to solving the broadband coverage problem, especially in less developed countries like the US and most of the third world. If anything, it seems like we're moving towards satellite internet and cellular for areas outside of the urban centers, and those are terrible for latency-sensitive applications like game streaming.
    - fooker 1y ago
      > But games haven't stopped getting more demanding every year. This is not particularly true. Even top of the line AAA games make sure they can be played on the current generation consoles which have been around for the last N years. Right now N=5. Sure you’ll get much better graphics with a high end PC, but those looking for cloud gaming would likely be satisfied with PS5 level graphics which can be pretty good.
downrightmike 1y ago
Intel chips from 2008, as there is no real improvements.
rootusrootus 1y ago
> This is going to maim the economy in a generational way. Just as I'm getting to the point where I can see retirement coming from off in the distance. Ugh.
donmcronald 1y ago
And a lot of the gains from the Dotcom boom are being paid back in negative value for the average person at this point. We have automated systems that waste our time when we need support, product features that should have a one-time-cost being turned into subscriptions, a complete usurping of the ability to distribute software or build compatible replacements, etc.. The Dotcom boom was probably good for everyone in some way, but it was much, much better for the extremely wealthy people that have gained control of everything.
- actionfromafar 1y ago
  Don’t say that, you’ll hasten the Antichrist!
  - Terr_ 1y ago
    (For those who missed it: https://www.theverge.com/ai-artificial-intelligence/785407/peter-thiel-antichrist-tech-regulation https://www.theverge.com/ai-artificial-intelligence/785407/p... )
- hattmall 1y ago
  AI itself is a manifestation of that too, a huge time waster for a lot of people. Getting randomly generated wrong but sounding right information is very frustrating. Start asking AI questions you already know the answer too and the issues can become very obvious.
- xmprt 1y ago
  If you're ever been to a third world country then you'd see how this is completely untrue. The dotcom boom has revolutionized the way of life for people in countries like India. Even for the average person in America, the ability to do so many activities online that would have taken hours otherwise (eg. shopping, research, DMV/government activities, etc). The fact that we see negative consequences of this like social network polarization or brainrot doesn't negate the positives that have been brought about.
  - 1y ago
deleted 1y ago
[deleted]
elbasti 1y ago
About 40% of AI infrastructure spending is the physical datacenter itself and the associated energy production. 60% is the chips. That 40% has a very long shelf life. Unfortunately, the energy component is almost entirely fossil fuels, so the global warming impact is pretty significant. At this point, geoengineering is the only thing that can earn us a bit of time to figure...idk, something out, and we can only hope the oceans don't acidify too much in the meantime.
- Naklin 1y ago
  Interesting. Do you have any sources for this 60/40 split? And while I agree that the infrastructure has a long shelf life, it seems to me like an AI bubble burst would greatly depreciate the value of this infrastructure as the demand for it plummets, no?
smj-edison 1y ago
> the current debt fueled spending Honestly I think the most surprising thing about this latest investment boom has been how little debt there is. VC spending and big tech's deep pockets keep banks from being too tangled in all of this, so the fallout will be much more gentle imo.
lemonlearnings 1y ago
I am not still using the same 1Mbps token ring from 1998 or the same dial up connecting to some 10Mbps backbone. I am using x86 chips though.
mountainriver 1y ago
This won’t even come close to maiming the economy, that’s one of the more extreme takes I’ve heard. AI is already making us wildly more productive. I vibe coded 5 deep ML libraries over the last month or so. This would have taken me maybe years before when I was manually coding as an MLE. We have clearly hit the stage of exponential improvement, and to not invest basically everything we have in it would be crazy. Anyone who doesn’t see that is missing the bigger picture.
- rhetocj23 1y ago
  Go ahead and post what youve done fella so we can critique. Why is it all these kinds of posts never come with any attachments? We are all interested to see it m8.
  - mountainriver 1y ago
    Because they are private and I can’t make them public. I have no self interest here, I’m an MLE by trade and this technology threatens my job. I had been mostly opposed to vibe coding for a long time, autocomplete was fine but full agentic coding just made a mess. That’s changed now, this stuff is genuinely working on really hard problems.
    - rhetocj23 1y ago
      So you have nothing to show. Typical
      - mountainriver 1y ago
        You can go use Codex on high and try it yourself, but I'm sure you'll prove yourself right
        rhetocj23 1y ago
        ZZZ show something or stop posting fella.
BurningFrog 1y ago
One thing to note about modern social media is that the most negative comment tends to become the most upvoted. You can see that all across this discussion.
tmaly 1y ago
my 486sx with math co-processor is long gone.
NathanaelRea 1y ago
Companies want GW data centers, which are a new thing that will last decades, even if GPUs are consumable and have high failure rates. Also, depending on how far it takes us, it could upgrade the electric grid, make electricity cheaper. And there will also be software infrastructure which could be durable. There will be improvements to software tooling and the ecosystem. We will have enormous pre-trained foundation models. These model weight artifacts could be copied for free, distilled, or fine tuned for a fraction of the cost.
cgio 1y ago
I think you partially answer to yourself though. Is the value in the depreciating chips, or in the huge datacenters, with cooling, energy supply, at such scale etc. ?
kqr 1y ago
While yes, I sure look forward to the flood of cheap graphics cards we will see 5-10 years from now. I don't need the newest card, but I don't mind the five-year old top-of-the-line at discount prices.

hibikir 1y ago

If you look at year over year chip improvements in 2025 vs 1998, it's clear that modern hardware just has a longer shelf life than it used to. The difficulties in getting more performance for the same power expenditure are just very different than back in the day. There's still depreciation, but it's not the same. Also look at other forms of hardware, like RAM, and the bonus electrical capacity being built.

lomase 1y ago
In 1998 to transfer a megabyte over telephone lines was expensive and 5 years later is was almost free. I have not seen the prices of GPUs, CPU or RAM going down, on the contrary, each day it gets more expensive.
- lemonlearnings 1y ago
  But why not measure $ per intelligence. In 2020 you'd need a billion dollars to get your computer to write good code, now it is practically free.
- fragmede 1y ago
  In 1998, 16 MiB of RAM was ~$200, in 2025, 16 GiB of ram is about $50. A Pentium II in 1998 at 459 MHz was $600. Today, a AMD Ryzen 7 9800X can be had for $500. That Ryzen is maybe 100 times as powerful as the Pentium II. What's available at what price point has changed, but it's ridiculous how much computing I can get for $150 at Best Buy, and it's also ridiculous how little I can do with that much computing power. Wirth’s law still holds: software is getting slower more rapidly than hardware is getting faster.

rhetocj23 1y ago

Personally I think people should stop trying to reason from the past. As tempting as it is, it leads to false outcomes because you are not thinking about how this particular situation is going to impact society and the economy. Its much harder to reason this way, but isnt that the point? personally I dont want to hear or read analogies based on the past - I want to see and read stuff that comes from original thinking.

munk-a 1y ago
Doesn't that line of reasoning leave you in danger of being largely ignorant? There's a wonderful quote from Twain "History doesn't repeat itself but it often rhymes" there are two critical things I'd highlight in that quote - first off the contrast between repetition and rhyming is drawing attention to the fact that things are never exactly the same - there's just a gist of similarities - the second is that it often but doesn't always rhyme - this sure looks like a bubble but it might not be and it might be something entirely new. _That all said_ it's important to learn from history because there are clear echoes of history in events because we, people in general, don't change that fundamentally.
deleted 1y ago
[deleted]
rootusrootus 1y ago
IME the number of times where people have said "this time it's different" and been wrong is a lot higher than the number of times they've said "this time is the same as the last" and been wrong. In fact, it is the increasing prevalence of the idea that "this time it's different" that makes me batten down the hatches and invest somewhere with more stability.
rhetocj23 1y ago
With all due respect, Im not here to teach people how to think. This guy gets it - https://www.youtube.com/watch?v=kxLCTA5wQow https://www.youtube.com/watch?v=kxLCTA5wQow Instead of plainly jumping on the bubble bandwagon he actually goes through a thorough analysis.

hx8 1y ago

A lot of the infrastructure made during the Dotcom boom was shortly discarded. How many dial-up modems were sold in the 90s? The current AI bubble is leading to trained models that won't be feasible to retrain for a decade or longer after the bubble bursts.

zerosizedweasle 1y ago
The wealth the Dotcom boom left behind wasn't in dial up modems or internet over the telephone, it was in the huge amounts of high speed fiber optic networks that were laid down. I think a lot of that infrastructure is still in use today, fiber optic cables can last 30 years or more.
- triceratops 1y ago
  > fiber optic cables can last 30 years or more The trenches for the cables even longer than that.
- deleted 1y ago
  [deleted]
- ecommerceguy 1y ago
  How much of it is still dark?
yeasku 1y ago
Honestly, not that many people had modems.
- jorts 1y ago
  In the late 90s to 2001? Many people were still using modems at that time. Cable or DSL wasn't even an option for a considerable percentage of the population.
  - yeasku 1y ago
    In 2000 6% of the population had access to internet. In 2002 I was woking making webs and setting up linux servers and I did not have internet at home.

simonw 1y ago

That's true for the GPUs themselves, but the data centers with their electricity infrastructure and cooling and suchlike won't become obsolete nearly as quickly.

davnicwil 1y ago
this is a good point, and it would be interesting to see the relative value of this building and housing 'plumbing' overhead Vs the chips themselves. I guess another example of the same thing is power generation capacity, although this comes online so much more slowly I'm not sure the dynamics would work in the same way.
- SoftTalker 1y ago
  The data centers built in 1998 don't have nearly enough power or cooling capacity to run today's infrastructure. I'd be surprised if very many of them are even still in use. Cheaper to build new than upgrade.
  - bialpio 1y ago
    How come? I'd expect that efficiency gains would lower power and thus cooling demands - are we packing more servers into the same space now or losing those gains elsewhere?
    - alchemism 1y ago
      Yes - blades-of-servers replacing what was 2 or 3 rack mount servers. Both air exchange and power requirements are radically different in order to fill that rack as it was before.
    - fc417fc802 1y ago
      It's just an educated guess, but I expect that power density has gone up quite a bit as a form of optimization. Efficiency gains permit both lower power (mobile) and higher compute (server) parts. How tightly you pack those server parts in is an entirely different matter. How many H100s can you fit on average per 1U of space?

wmf 1y ago

They're only replacing GPUs because investors will give "free" money to do so. Once the bubble pops people will realize that GPUs actually last a while.

bilsbie 1y ago

We don’t have moores law anymore. Why are the chips obseleting so quickly?

myhf 1y ago
FLOP/s/$ is still increasing exponentially, even if the specific components don't match Moore's original phrasing. Markets for electronics have momentum, and estimating that momentum is how chip producers plan for investment in manufacturing capacity, and how chip consumers plan for deprecation.
o11c 1y ago
They kind of aren't. If you actually look at "how many dollars am I spending per month on electricity", there's a good chance it's not worth upgrading even if your computer is 10 years old. Of course this does make some moderate assumptions that it was a solid build in the first place, not a flimsy laptop, not artificially made obsolete/slow, etc. Even then, "install an SSD" and "install more RAM" is most of everything. Of course, if you are a developer you should avoid doing these things so you won't get encouraged to write crappy programs.

ch4s3 1y ago

There are probably a lot of cool and useful things you could do with a bunch of data centers full of GPUs. - better weather forecasts - modeling intermittent generation on the grid to get more solar online - drug discovery - economic modeling - low cost streaming games - simulation of all types

amatecha 1y ago
- cloud gaming service? :D
- mort96 1y ago
  Eh not really. Maybe retro cloud gaming services. But games haven't stopped getting more demanding every year. Not only are the AI GPUs focused on achieving clusters with great compute performance per watt and dollar rather than making singular GPUs with great raster performance; even the GPUs which are powerful enough for current games won't be powerful enough for games in 5 years. Not to mean that we're still nowhere near close to solving the broadband coverage problem, especially in less developed countries like the US and most of the third world. If anything, it seems like we're moving towards satellite internet and cellular for areas outside of the urban centers, and those are terrible for latency-sensitive applications like game streaming.
  - fooker 1y ago
    > But games haven't stopped getting more demanding every year. This is not particularly true. Even top of the line AAA games make sure they can be played on the current generation consoles which have been around for the last N years. Right now N=5. Sure you’ll get much better graphics with a high end PC, but those looking for cloud gaming would likely be satisfied with PS5 level graphics which can be pretty good.

downrightmike 1y ago

Intel chips from 2008, as there is no real improvements.

rootusrootus 1y ago

> This is going to maim the economy in a generational way. Just as I'm getting to the point where I can see retirement coming from off in the distance. Ugh.

donmcronald 1y ago

And a lot of the gains from the Dotcom boom are being paid back in negative value for the average person at this point. We have automated systems that waste our time when we need support, product features that should have a one-time-cost being turned into subscriptions, a complete usurping of the ability to distribute software or build compatible replacements, etc.. The Dotcom boom was probably good for everyone in some way, but it was much, much better for the extremely wealthy people that have gained control of everything.

actionfromafar 1y ago
Don’t say that, you’ll hasten the Antichrist!
- Terr_ 1y ago
  (For those who missed it: https://www.theverge.com/ai-artificial-intelligence/785407/peter-thiel-antichrist-tech-regulation https://www.theverge.com/ai-artificial-intelligence/785407/p... )
hattmall 1y ago
AI itself is a manifestation of that too, a huge time waster for a lot of people. Getting randomly generated wrong but sounding right information is very frustrating. Start asking AI questions you already know the answer too and the issues can become very obvious.
xmprt 1y ago
If you're ever been to a third world country then you'd see how this is completely untrue. The dotcom boom has revolutionized the way of life for people in countries like India. Even for the average person in America, the ability to do so many activities online that would have taken hours otherwise (eg. shopping, research, DMV/government activities, etc). The fact that we see negative consequences of this like social network polarization or brainrot doesn't negate the positives that have been brought about.
- 1y ago

deleted 1y ago

[deleted]

elbasti 1y ago

About 40% of AI infrastructure spending is the physical datacenter itself and the associated energy production. 60% is the chips. That 40% has a very long shelf life. Unfortunately, the energy component is almost entirely fossil fuels, so the global warming impact is pretty significant. At this point, geoengineering is the only thing that can earn us a bit of time to figure...idk, something out, and we can only hope the oceans don't acidify too much in the meantime.

Naklin 1y ago
Interesting. Do you have any sources for this 60/40 split? And while I agree that the infrastructure has a long shelf life, it seems to me like an AI bubble burst would greatly depreciate the value of this infrastructure as the demand for it plummets, no?

smj-edison 1y ago

> the current debt fueled spending Honestly I think the most surprising thing about this latest investment boom has been how little debt there is. VC spending and big tech's deep pockets keep banks from being too tangled in all of this, so the fallout will be much more gentle imo.

lemonlearnings 1y ago

I am not still using the same 1Mbps token ring from 1998 or the same dial up connecting to some 10Mbps backbone. I am using x86 chips though.

mountainriver 1y ago

This won’t even come close to maiming the economy, that’s one of the more extreme takes I’ve heard. AI is already making us wildly more productive. I vibe coded 5 deep ML libraries over the last month or so. This would have taken me maybe years before when I was manually coding as an MLE. We have clearly hit the stage of exponential improvement, and to not invest basically everything we have in it would be crazy. Anyone who doesn’t see that is missing the bigger picture.

rhetocj23 1y ago
Go ahead and post what youve done fella so we can critique. Why is it all these kinds of posts never come with any attachments? We are all interested to see it m8.
- mountainriver 1y ago
  Because they are private and I can’t make them public. I have no self interest here, I’m an MLE by trade and this technology threatens my job. I had been mostly opposed to vibe coding for a long time, autocomplete was fine but full agentic coding just made a mess. That’s changed now, this stuff is genuinely working on really hard problems.
  - rhetocj23 1y ago
    So you have nothing to show. Typical
    - mountainriver 1y ago
      You can go use Codex on high and try it yourself, but I'm sure you'll prove yourself right
      - rhetocj23 1y ago
        ZZZ show something or stop posting fella.

BurningFrog 1y ago

One thing to note about modern social media is that the most negative comment tends to become the most upvoted. You can see that all across this discussion.

tmaly 1y ago

my 486sx with math co-processor is long gone.

NathanaelRea 1y ago

Companies want GW data centers, which are a new thing that will last decades, even if GPUs are consumable and have high failure rates. Also, depending on how far it takes us, it could upgrade the electric grid, make electricity cheaper. And there will also be software infrastructure which could be durable. There will be improvements to software tooling and the ecosystem. We will have enormous pre-trained foundation models. These model weight artifacts could be copied for free, distilled, or fine tuned for a fraction of the cost.

cgio 1y ago

I think you partially answer to yourself though. Is the value in the depreciating chips, or in the huge datacenters, with cooling, energy supply, at such scale etc. ?

kqr 1y ago

While yes, I sure look forward to the flood of cheap graphics cards we will see 5-10 years from now. I don't need the newest card, but I don't mind the five-year old top-of-the-line at discount prices.