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> Oil is a finite resource that comes out of the ground Yes but the chips, hardware, copper cables, silicon and all the rest of the components that make up a s

> Oil is a finite resource that comes out of the ground Yes but the chips, hardware, copper cables, silicon and all the rest of the components that make up a server are finite. Unless these magically appear from outer space, we'll face the same resource constraints as everything else that is pulled out of the ground. These components are also far more fragile to source, see COVID and the collapse of global supply chains. Also the factories to create these components are expensive to build and fragile to maintain. See the Dutch company that seems to be the sole supply of certain manufacturing skills.[1] > I would bet a lot of money that the price of LLM assistance will go down, not up, as the hardware and software advance. My bet would be that it would fuel the profits of AI companies and not make the price of AI come down. Over supply makes price come down but if supply is kept artificially low, then prices stay high. That's the comparison to OPEC and oil. There is plenty of oil to go around yet the supply is capped and thereby prices kept high. There is no guarantee that savings in hardware or supply will be passed on by AI corps. Indeed there is no guarantee that there will be serious competition in the market, OPEC is a monopoly so why not have an AI monopoly? At the moment, all major players in AI are based in the same geopolitical sphere, making a monopoly more likely, IMHO. In the end, it's all speculation what will happen. It just depends on which fairy tail one believes in. [1]: https://en.wikipedia.org/wiki/ASML_Holding https://en.wikipedia.org/wiki/ASML_Holding

Aurornis 7mo ago
> Yes but the chips, hardware, copper cables, silicon and all the rest of the components that make up a server are finite. Unless these magically appear from outer space, we'll face the same resource constraints as everything else that is pulled out of the ground. Raw material cost is not a driver of datacenter GPU costs. > Over supply makes price come down but if supply is kept artificially low, then prices stay high. Where are you getting "supply kept artificially low" when we're in the middle of an explosion of datacenter buildouts and AI companies? We're in a race to the bottom on pricing. I haven't seen a realistic argument for why you think prices are going to go up. You're starting with a conclusion and trying to find reasons it might be true.
- Towaway69 7mo ago
  > Where are you getting "supply kept artificially low" If a resource is controlled by a small group of coordinated folks (for example, large US controlled corporations who have/are these datacenters), the resource may be limited artificially because access to these resources are controlled by said corporations. Exploding datacenters and AI companies yes, but true competition probably not. Most AI companies are using the datacenters from said corporations, if those corporations decide that compute costs one cent more, then all AI providers will become more expensive. What we should learn from OPEC and oil is that not resource amounts that define the price, it is access to the resource that defines the price.

Aurornis 7mo ago

> Yes but the chips, hardware, copper cables, silicon and all the rest of the components that make up a server are finite. Unless these magically appear from outer space, we'll face the same resource constraints as everything else that is pulled out of the ground. Raw material cost is not a driver of datacenter GPU costs. > Over supply makes price come down but if supply is kept artificially low, then prices stay high. Where are you getting "supply kept artificially low" when we're in the middle of an explosion of datacenter buildouts and AI companies? We're in a race to the bottom on pricing. I haven't seen a realistic argument for why you think prices are going to go up. You're starting with a conclusion and trying to find reasons it might be true.

Towaway69 7mo ago
> Where are you getting "supply kept artificially low" If a resource is controlled by a small group of coordinated folks (for example, large US controlled corporations who have/are these datacenters), the resource may be limited artificially because access to these resources are controlled by said corporations. Exploding datacenters and AI companies yes, but true competition probably not. Most AI companies are using the datacenters from said corporations, if those corporations decide that compute costs one cent more, then all AI providers will become more expensive. What we should learn from OPEC and oil is that not resource amounts that define the price, it is access to the resource that defines the price.