5 ms·

The problem I've seen described by some is that the industry is resistant to expand capacity right now, because a partial pop of the AI bubble is expected aaany

by lopis 10mo ago

The problem I've seen described by some is that the industry is resistant to expand capacity right now, because a partial pop of the AI bubble is expected aaany time now for months, but it keeps not happening. But if it does happen and they have too much capacity, the whole GPU and RAM industry would not be able to recoup that investment and would collapse.

pm90 10mo ago
Western (+allied) firms should 100% be worried but they are in a difficult spot: risk losing out on market share or risk overcapacity. The Chinese have the full might of Federal/State Governments behind them which may allow them to survive overcapacity, not so for the western firms.
- shuntress 10mo ago
  Can you clarify the point you are trying to make?
jstummbillig 10mo ago
People confuse themselves with the bubble-metaphor. If an AI bubble exists and pops (we need not discuss either) the already existing and on-the-way-demand will not just disappear. Millions of todays users will not just decide that they don't want to use claude code or chatgpt anymore. Instead, an increasing number of people are going to want AI stuff from here on out, forever, because it's proven to be good enough in the eyes of hundreds of millions and that will create continuous hardware demand (at least because of hardware churn, but also because there are a lot of people in the world who currently don't have great access to this technology yet). I don't know how much optimization will drive down hardware per token, but given that most people would rather wait like 5 seconds instead of 15 minutes for answers to their coding problems, I think it's safe to assume that hardware is going to be in demand for a long time, even if, for whatever wild reason, absolutely nothing happens on top of what has already happened.
- FridgeSeal 10mo ago
  > Millions of todays users will not just decide that they don't want to use claude code or chatgpt anymore Won’t they? For a great number of people, LLM’s are in the “nice to have” basket. Execs and hucksters foam at the mouth over them, other people find utility but the vast majority are not upending their life in service of them. I suspect if ChatGPT evaporated tomorrow, the chronically dependent would struggle, most people would shrug and go on with their lives, and any actual use cases would probably spin up a local model and go back to whatever they’re doing. I’m not denying hardware demand will evaporate, it definitely won’t, but interrupt the cycle and “ehh, good enough” will probably go a very long way for a very large percentage of the userbase.
  - jstummbillig 10mo ago
    I am not sure I understand. I agree: If AI were to disappear tomorrow, people would adjust (as they did when AI, or the iPhone or the internet appeared). That's what people do. But now there is user demand. Who or what would take away AI? What is the scenario?
    - lopis 10mo ago
      Lots of companies right now have slapped AI features on their products without extra cost. Some are offering it for free (e.g. search engines). If LLM costs significantly increase, I would expect free AI features to disappear or become extra paid features (already started to happen in some SASS), while any free LLMs become simpler and cheaper.
      - jstummbillig 10mo ago
        This is making the scenario more complicated, because now we also have to consider products without product market fit, which is an entirely different issue. I don't know how to think about that.
        lopis 10mo ago

by lopis 10mo ago

pm90 10mo ago

Western (+allied) firms should 100% be worried but they are in a difficult spot: risk losing out on market share or risk overcapacity. The Chinese have the full might of Federal/State Governments behind them which may allow them to survive overcapacity, not so for the western firms.

shuntress 10mo ago
Can you clarify the point you are trying to make?

jstummbillig 10mo ago

People confuse themselves with the bubble-metaphor. If an AI bubble exists and pops (we need not discuss either) the already existing and on-the-way-demand will not just disappear. Millions of todays users will not just decide that they don't want to use claude code or chatgpt anymore. Instead, an increasing number of people are going to want AI stuff from here on out, forever, because it's proven to be good enough in the eyes of hundreds of millions and that will create continuous hardware demand (at least because of hardware churn, but also because there are a lot of people in the world who currently don't have great access to this technology yet). I don't know how much optimization will drive down hardware per token, but given that most people would rather wait like 5 seconds instead of 15 minutes for answers to their coding problems, I think it's safe to assume that hardware is going to be in demand for a long time, even if, for whatever wild reason, absolutely nothing happens on top of what has already happened.

FridgeSeal 10mo ago
> Millions of todays users will not just decide that they don't want to use claude code or chatgpt anymore Won’t they? For a great number of people, LLM’s are in the “nice to have” basket. Execs and hucksters foam at the mouth over them, other people find utility but the vast majority are not upending their life in service of them. I suspect if ChatGPT evaporated tomorrow, the chronically dependent would struggle, most people would shrug and go on with their lives, and any actual use cases would probably spin up a local model and go back to whatever they’re doing. I’m not denying hardware demand will evaporate, it definitely won’t, but interrupt the cycle and “ehh, good enough” will probably go a very long way for a very large percentage of the userbase.
- jstummbillig 10mo ago
  I am not sure I understand. I agree: If AI were to disappear tomorrow, people would adjust (as they did when AI, or the iPhone or the internet appeared). That's what people do. But now there is user demand. Who or what would take away AI? What is the scenario?
  - lopis 10mo ago
    Lots of companies right now have slapped AI features on their products without extra cost. Some are offering it for free (e.g. search engines). If LLM costs significantly increase, I would expect free AI features to disappear or become extra paid features (already started to happen in some SASS), while any free LLMs become simpler and cheaper.
    - jstummbillig 10mo ago
      This is making the scenario more complicated, because now we also have to consider products without product market fit, which is an entirely different issue. I don't know how to think about that.
      - lopis 10mo ago