5 ms·

"So you have on one end the token revenue trending down, on the other end the training cost going up for the next frontier models, and you need to pay back your

"So you have on one end the token revenue trending down, on the other end the training cost going up for the next frontier models, and you need to pay back your 10y debt." Not necessarily, the bond holders could simply take a massive hair cut and lose shitloads of money. On the topic of bubbles and exuberance, Jeff Bezos made the salient point that there was a massive over-invested biotech boom in the 1990s and tons of sophisticated investors ended up losing lots of money. But humanity still kept the medical advancements made by the boom. Stocks going down didn't un-research drugs, and it won't un-research new GPUs or un-build datacenters.

biztos 5mo ago
In order to not un-build the data centers, they at least have to make more than it costs to operate them, and also not have some attractive liquidation value (the land, maybe). I could imagine something like “inference is done at home or in China, that’s the price to beat” and it’s not worth keeping all those GPUs cool out in Nevada.
- missedthecue 5mo ago
  But the parent comment was that one of the bigger costs in these data centers was the interest expense on the borrowed money. A restructuring removes or heavily reduces that amount. The fiber laid during the dotcom bubble never paid back the investors or lenders, but it's still profitably connecting customers all these years later.
  - nothercastle 5mo ago
    It’s true once built the data center can operate right up to a financed data center value of zero. The investors will loose money but the costs of AI will go down as they do
  - lazide 5mo ago
    Yup, that is the real economic benefit of bankruptcy - a reset.
  - HWR_14 5mo ago
    Isn't something like 90% of the fiber laid during the dot com bubble still dark?
solatic 5mo ago
> Stocks going down didn't un-research drugs Drugs cost pennies to manufacture after they are researched and make their way through the approval pipeline. There are many generic drug manufacturers who can work off the existing formulas. The more apt comparison is that LLMs won't be un-trained. Opus 4.8 now exists. Even if Anthropic somehow went bankrupt, that particular asset could, at the very least, be sold for proverbial pennies on the dollar to a "generic" inference provider.
- eecc 5mo ago
  Or locked away in litigation for decades… See what became of the Amiga
- saalweachter 5mo ago
  Research does get lost over time. The whole point of the patent system is keeping that from happening; if the drug company goes bankrupt, even if they lose all their internal documentation in the process, hopefully the patents and other public paperwork provides enough information for an unrelated company -- either having acquired the patent rights, or after the patent period ends -- to reconstruct the processes with less investment then the original research. If a bankrupt AI company maintains enough of a skeleton crew to consolidate and archive its intellectual property it could be sold off to another company, but there are also timelines where it all ends up digital dust in the wind.
  - alfiedotwtf 5mo ago
    > If a bankrupt AI company maintains enough of a skeleton crew to consolidate and archive its intellectual property it could be sold off to another company, but there are also timelines where it all ends up digital dust in the wind. Only if that skeleton crew had deep deep pockets. If Anthropic closed their doors tomorrow because the market collectively saw that AI was not profitable and so open sourced everything, there wouldn't be any money to train Opus 5.0... it would then have to fall on governments to put money into the hat (which I can't see happening unless it was Europe)
20k 5mo ago
Datacentres aren't the same as infrastructure or research though. All the hardware in them has a finite, useful lifespan. In 10 years time it'll be totally useless Hardware fails, and also scales out in terms of efficacy to run it as more power efficient, modern hardware turns up. It requires constant investment to keep it useful, and cost efficient When AI pops, we'll temporarily have some extra compute capacity that will be horrendously uneconomical to run due to the high grid load and low consumer demand, before they get shutdown. There's simply no real use for them at this scale
dgellow 5mo ago
Those data centers are specifically for AI workloads. Let’s say everything crashes and we now have all the data centers, what do you do with them? GPU are pretty specialized hardware, without AI a data center full of outdated graphics cards isn’t really too valuable. It’s really not obvious the infrastructure we are building for AI stuff is something that will benefit humanity over time. Without talking about the fact that bubbles are extremely destructive. Bezos is obviously someone who came out ok from the dotcom bubble but we are talking about something that destroys a lot of value globally. That has real, direct consequences, not just investors losing some money. The US economy is currently only growing because of the AI bet
- inemesitaffia 5mo ago
  You sell the GPU's to remote gaming companies. Replace servers with regular compute.
  - __alexs 5mo ago
    Nvidia would have to ship game ready drivers for H100s but it could work.
    - xyzsparetimexyz 5mo ago
      They don't have display-out. You'd have to send back the screen data over pcie to the motherboard for display.
      - __alexs 5mo ago
        Not exactly a problem for cloud gaming.
        xyzsparetimexyz 5mo ago
        Has there ever been a market for cloud gaming apart from middle class people with macbooks who casually want to play one particular game but not enough to pay for a whole PC or console?
Frieren 5mo ago
> Jeff Bezos made the salient point... Big AI investor tells us that investing in AI is good. Oh, the surprise! Does that invalidate this point? Yes. Because it makes no sense. The big money is not going to R&D but to build infrastructure that will be outdated in 5 years.
- missedthecue 5mo ago
  No, that's not the right read. He said bubbles and exuberance still produce lasting value for humanity, even when investors lose money. Big money is going to build infrastructure which is fundamentally required for R&D. They aren't separate, they are the same thing. It sounds like you're complaining that Pfizer isn't investing in drug research, they are buying mass spectrometers and micron fidelity microscopes. Same thing!
  - Frieren 5mo ago
    > bubbles and exuberance still produce lasting value for humanity Citation needed: Bubbles destroy value, assign resources to wasteful endeavors. Just look at the financial bubble of 2008. So many people lost their jobs, so much money was moved from the average worker pocket to banks, people lost their homes, etc. A focus on construction will have provided millions with homes, a focus on finance and money stole them of it. The .com bubble wasted billions in bogus projects and scams. The web didn't became to improve until after the money run out and competition between companies took over. > Big money is going to build infrastructure which is fundamentally required for R&D. That is never true. Big money extracts value from society. It is the small investors, pension funds, etc. that move the economy. It is everyday's working class spending. It is educated people pursuing their passion that creates value. Big money are parasites that steal from society. That pee-in-a-bottle Bezos is trying to convince people of the opposite is unsurprising.

biztos 5mo ago

In order to not un-build the data centers, they at least have to make more than it costs to operate them, and also not have some attractive liquidation value (the land, maybe). I could imagine something like “inference is done at home or in China, that’s the price to beat” and it’s not worth keeping all those GPUs cool out in Nevada.

missedthecue 5mo ago
But the parent comment was that one of the bigger costs in these data centers was the interest expense on the borrowed money. A restructuring removes or heavily reduces that amount. The fiber laid during the dotcom bubble never paid back the investors or lenders, but it's still profitably connecting customers all these years later.
- nothercastle 5mo ago
  It’s true once built the data center can operate right up to a financed data center value of zero. The investors will loose money but the costs of AI will go down as they do
- lazide 5mo ago
  Yup, that is the real economic benefit of bankruptcy - a reset.
- HWR_14 5mo ago
  Isn't something like 90% of the fiber laid during the dot com bubble still dark?

solatic 5mo ago

> Stocks going down didn't un-research drugs Drugs cost pennies to manufacture after they are researched and make their way through the approval pipeline. There are many generic drug manufacturers who can work off the existing formulas. The more apt comparison is that LLMs won't be un-trained. Opus 4.8 now exists. Even if Anthropic somehow went bankrupt, that particular asset could, at the very least, be sold for proverbial pennies on the dollar to a "generic" inference provider.

eecc 5mo ago
Or locked away in litigation for decades… See what became of the Amiga
saalweachter 5mo ago
Research does get lost over time. The whole point of the patent system is keeping that from happening; if the drug company goes bankrupt, even if they lose all their internal documentation in the process, hopefully the patents and other public paperwork provides enough information for an unrelated company -- either having acquired the patent rights, or after the patent period ends -- to reconstruct the processes with less investment then the original research. If a bankrupt AI company maintains enough of a skeleton crew to consolidate and archive its intellectual property it could be sold off to another company, but there are also timelines where it all ends up digital dust in the wind.
- alfiedotwtf 5mo ago
  > If a bankrupt AI company maintains enough of a skeleton crew to consolidate and archive its intellectual property it could be sold off to another company, but there are also timelines where it all ends up digital dust in the wind. Only if that skeleton crew had deep deep pockets. If Anthropic closed their doors tomorrow because the market collectively saw that AI was not profitable and so open sourced everything, there wouldn't be any money to train Opus 5.0... it would then have to fall on governments to put money into the hat (which I can't see happening unless it was Europe)

20k 5mo ago

Datacentres aren't the same as infrastructure or research though. All the hardware in them has a finite, useful lifespan. In 10 years time it'll be totally useless Hardware fails, and also scales out in terms of efficacy to run it as more power efficient, modern hardware turns up. It requires constant investment to keep it useful, and cost efficient When AI pops, we'll temporarily have some extra compute capacity that will be horrendously uneconomical to run due to the high grid load and low consumer demand, before they get shutdown. There's simply no real use for them at this scale

dgellow 5mo ago

Those data centers are specifically for AI workloads. Let’s say everything crashes and we now have all the data centers, what do you do with them? GPU are pretty specialized hardware, without AI a data center full of outdated graphics cards isn’t really too valuable. It’s really not obvious the infrastructure we are building for AI stuff is something that will benefit humanity over time. Without talking about the fact that bubbles are extremely destructive. Bezos is obviously someone who came out ok from the dotcom bubble but we are talking about something that destroys a lot of value globally. That has real, direct consequences, not just investors losing some money. The US economy is currently only growing because of the AI bet

inemesitaffia 5mo ago
You sell the GPU's to remote gaming companies. Replace servers with regular compute.
- __alexs 5mo ago
  Nvidia would have to ship game ready drivers for H100s but it could work.
  - xyzsparetimexyz 5mo ago
    They don't have display-out. You'd have to send back the screen data over pcie to the motherboard for display.
    - __alexs 5mo ago
      Not exactly a problem for cloud gaming.
      - xyzsparetimexyz 5mo ago
        Has there ever been a market for cloud gaming apart from middle class people with macbooks who casually want to play one particular game but not enough to pay for a whole PC or console?

Frieren 5mo ago

> Jeff Bezos made the salient point... Big AI investor tells us that investing in AI is good. Oh, the surprise! Does that invalidate this point? Yes. Because it makes no sense. The big money is not going to R&D but to build infrastructure that will be outdated in 5 years.

missedthecue 5mo ago
No, that's not the right read. He said bubbles and exuberance still produce lasting value for humanity, even when investors lose money. Big money is going to build infrastructure which is fundamentally required for R&D. They aren't separate, they are the same thing. It sounds like you're complaining that Pfizer isn't investing in drug research, they are buying mass spectrometers and micron fidelity microscopes. Same thing!
- Frieren 5mo ago
  > bubbles and exuberance still produce lasting value for humanity Citation needed: Bubbles destroy value, assign resources to wasteful endeavors. Just look at the financial bubble of 2008. So many people lost their jobs, so much money was moved from the average worker pocket to banks, people lost their homes, etc. A focus on construction will have provided millions with homes, a focus on finance and money stole them of it. The .com bubble wasted billions in bogus projects and scams. The web didn't became to improve until after the money run out and competition between companies took over. > Big money is going to build infrastructure which is fundamentally required for R&D. That is never true. Big money extracts value from society. It is the small investors, pension funds, etc. that move the economy. It is everyday's working class spending. It is educated people pursuing their passion that creates value. Big money are parasites that steal from society. That pee-in-a-bottle Bezos is trying to convince people of the opposite is unsurprising.