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> There is little indication that in 2028 situation will be any better unless something drastic happens like AI crash. China. This market situation is a perfe

> There is little indication that in 2028 situation will be any better unless something drastic happens like AI crash. China. This market situation is a perfect storm for chinese manufacturers to step up. They don't have to chase latest-and-greatest, price-performance is one of the strongest demand drivers in consumer segment. They need a viable alternative, offer it at a reasonable price - which is much easier to achieve under current heavily inflated conditions - and that would quickly entrench them as a household brand. Remember, it's not that there's no chinese lithography tech at all, it's just not advanced enough to yield mass production silicon at commercially viable prices. It might be the case that at current market conditions this caveat does not hold and all they need to do is ship. Even if the current prices mean they do it at break-even it would still be an enormously massive win. Again, they don't have to compete at the flagship level from the get go, they need something commercially viable. There are tons of Chinese companies in the west and probably even more western on the outside chinese white-label goods. Chinese government has enough weight to push domestic silicon on those companies to create domestic silicon industry that can make the unit economies work. All in all, there is a very likely scenario where this current AI boom and the resulting crunch on silicon supply creates a competitive silicon industry in China. If you think something in the realm of "I would not buy chinese silicon even if it was cheaper" it does not matter. Look at smartphone market share outside of USA, Japan and West Europe: in majority of the world Apple+Samsung barely touches 50%. What this "rest of the world" lacks in individual purchasing power it more than makes up for in numbers.

midas89 1mo ago
Here is what I'll push back with: Even if somehow you had the super hero ability to create this silicon out of thin air and even double it, I'd argue that it wouldn't drive down prices. Simply because both the AI datacenter's need and their ability to pay is bigger then the consumer market. So far it seems that the more silicon you throw at AI, then the better your reasoning output. So the cheaper the chips, the more these datacenters will buy. Arguably they would buy even more because then you can tell investors that you have more powerful models (due to more compute) and your price per output is cheaper (because average hardware is cheaper).
- cedilla 1mo ago
  Isn't too early to see if the Gigadatacenters will really pay off? I'm not trying to be an AI doomer here, but I thought the new really large DCs are just not yet online.
- friendzis 1mo ago
  Your argument relies on two assumptions: 1. That a new player would offer enterprise level product, instead of consumer grade. IMO it's very likely that if such a scenario unfolded, the market would be segmented into enterprise/consumer not only at the product level, but at the supplier level too. At least initially. 2. That AI compute demand is essentially unlimited AND silicon production capacity is and will remain bottleneck in datacenter buildouts. IMO we are much closer to the point where physical infrastructure becomes the apparent bottleneck than it would seem, IF political climate allows. Datacenter buildout is THE talking point in Ohio elections and if the dems win, datacenters will become THE talking point in the whole USofA. In just a couple of months the landscape they are operating in could become very different.

midas89 1mo ago

Here is what I'll push back with: Even if somehow you had the super hero ability to create this silicon out of thin air and even double it, I'd argue that it wouldn't drive down prices. Simply because both the AI datacenter's need and their ability to pay is bigger then the consumer market. So far it seems that the more silicon you throw at AI, then the better your reasoning output. So the cheaper the chips, the more these datacenters will buy. Arguably they would buy even more because then you can tell investors that you have more powerful models (due to more compute) and your price per output is cheaper (because average hardware is cheaper).

cedilla 1mo ago
Isn't too early to see if the Gigadatacenters will really pay off? I'm not trying to be an AI doomer here, but I thought the new really large DCs are just not yet online.
friendzis 1mo ago
Your argument relies on two assumptions: 1. That a new player would offer enterprise level product, instead of consumer grade. IMO it's very likely that if such a scenario unfolded, the market would be segmented into enterprise/consumer not only at the product level, but at the supplier level too. At least initially. 2. That AI compute demand is essentially unlimited AND silicon production capacity is and will remain bottleneck in datacenter buildouts. IMO we are much closer to the point where physical infrastructure becomes the apparent bottleneck than it would seem, IF political climate allows. Datacenter buildout is THE talking point in Ohio elections and if the dems win, datacenters will become THE talking point in the whole USofA. In just a couple of months the landscape they are operating in could become very different.