Don’t forget that the data centres are owned by dedicated data centre companies and funded by loans issued based on the (declining) value of the GPUs that will be installed there, by the promised future sales of the datacentre resources to AI companies that lose more money with every additional query sent to their service, and also funded by rebates offered by the companies that are selling the GPUs, which will only pay out of the datacenre company buys enough GPUs.
Apparently these companies are spending 500b+ on a field that makes up to 20b in revenue.
They need 50x more revenue to pay off just the data centers.
Plus companies are creating holding companies to hold their debt on this financing so that their balance sheets look better. I would bet that Trump will let them write that off and bail them out though.
They need 50x more revenue to pay off just the data centers.
The product is already expensive; there’s been minimal tangible cost savings as a result of using AI and they still have the problem where more usage directly correlates with more cost. We’re not creating NYT Online where the cost of development is spread across n users and approaches $0 per user as it grows. This is much more like non-tech scaling costs. For every 200 people using the service in a given day, we need a new A380. If they use the service twice, we need to fuel the plane twice.
A new report just came out which shows that AI created the same amount of CO2 in 2025 as the entirety of New York City. So there’s also that. Add it to the pile.
Don’t forget that the data centres are owned by dedicated data centre companies and funded by loans issued based on the (declining) value of the GPUs that will be installed there, by the promised future sales of the datacentre resources to AI companies that lose more money with every additional query sent to their service, and also funded by rebates offered by the companies that are selling the GPUs, which will only pay out of the datacenre company buys enough GPUs.
It’s a fucking catastrophe.
Apparently these companies are spending 500b+ on a field that makes up to 20b in revenue.
They need 50x more revenue to pay off just the data centers.
Plus companies are creating holding companies to hold their debt on this financing so that their balance sheets look better. I would bet that Trump will let them write that off and bail them out though.
The product is already expensive; there’s been minimal tangible cost savings as a result of using AI and they still have the problem where more usage directly correlates with more cost. We’re not creating NYT Online where the cost of development is spread across n users and approaches $0 per user as it grows. This is much more like non-tech scaling costs. For every 200 people using the service in a given day, we need a new A380. If they use the service twice, we need to fuel the plane twice.
A new report just came out which shows that AI created the same amount of CO2 in 2025 as the entirety of New York City. So there’s also that. Add it to the pile.
if you mean this particular situation: no, that’s just a bubble
if you mean capitalism: hell yeah—f*ckin catastrophe
Disaster!