[rfv6723]

The massive investment in power grids and data centers provides a permanent physical backbone that outlives any specific silicon generation. This infrastructure serves as a durable shell for the model design knowledge and chip architectural IP gained through each iteration. Capital is effectively funding a structural moat built on energy access and engineering mastery.

[DrewADesign]

Seems like there’s a lot of resources being dumped into those data centers that will not be very useful. Saying it will all be worthwhile because we’ll have the buildings and the modest power grid updates (which are largely paid for by tax payers, anyway,) feels like saying a PS5 is a good long-term investment because the cords and box will still be good long ag after the PS5 has outlived its usefulness.

[rfv6723]

The "PS5" analogy fails to account for how "useless" hardware often triggers the next paradigm shift. For decades, traditionalists dismissed high-end GPUs as expensive toys for gamers, yet that specific architecture became the accidental engine of the AI revolution.

[DrewADesign]

And you imagine these incredibly expensive-to-operate, environmentally damaging, highly specialized, years-outdated GPUs will trigger some sort of technological revolution that won’t be infinitely better served by the shiny new GPUs of the day that will not only be dramatically more powerful, but offer a ton more compute for the amount of electricity used?

The AI use of GPUs didn’t stem from a glut of outdated, discarded units with nearly no market value. All of those old discarded GPUs were, and still are, worthless digital refuse.

The closest analog i can think of to what you’re referring to is cluster computing with old commodity PCs that got companies like Google and Hotmail off the ground… for a few years until they could afford big boy servers and now all of those, and most current PCs on the verge of obsolescence, are also worthless digital refuse.

The big difference is that Google et al chose those PC clusters because they were cheap, commodity pieces right off-the-bat, not because they were narrowly scoped specialty hardware pieces that collectively cost hundreds of billions of dollars.

Your supposition fails to account for our history with hardware in any reasonable way.

[rfv6723]

Focusing exclusively on the physical decay and replacement cycle of hardware is a classic case of tunnel vision. It ignores the fact that the semiconductor industry’s true value lies in the evolution of manufacturing processes and architectural design rather than the lifespan of a specific unit. While individual chips eventually become obsolete, the compounding breakthroughs in logic and efficiency are what actually drive the technological revolution you are discounting.

[DrewADesign]

Tunnel vision is ignoring the astonishing amount of money and environmental resources our society is dumping into these very physical, very temporally useful chips and their housing because… of what we learn by doing that. We should have dumped 1/100th of that money into research and we’d have been further along.

This isn’t a normal tech expenditure— the scale of this threatens the economy in a serious way if they get it wrong. That’s 401ks, IRAs, pension plans, houses foreclosed on, jobs lost, surgeries skipped… if we took a tiny fraction of this race-to-hypeland and put towards childhood food insecurity, we could be living in a fundamentally different looking society. The big takeaway from this whole ordeal has nothing to do with semiconductors — it is that rich guys playing with other people’s money singularly focused on becoming king of the hill are still terrible stewards of our financial system.

[rfv6723]

Dismissing massive capital expenditure as "hypeland" ignores the historical reality that speculative bubbles often build the physical foundation for the next century. The Panic of 1873 saw a catastrophic evaporation of debt-driven capital, yet the "worthless" railroads built during that frenzy remained in the ground. That redundant, overbuilt infrastructure became the literal backbone of American industrialization, providing the logistics required for a global economic shift that far outlasted the initial financial ruin.

Divorcing research from "learning by doing" is a recipe for a bureaucratic ivory tower. If you only funnel money into pure research without the messy, expensive, and often "wasteful" reality of large-scale deployment, you end up with an economy of academic metrics rather than industrial power.

The most damning evidence against the "research-only" model is the birth of the Transformer architecture. It did not emerge from an ivory tower funded by bureaucratic grants or academic peer-review cycles; it was forged in the fires of industrial practice.

History shows that a fixation on immediate social utility or "rational" cost analysis can be a strategic trap. During the same era, Qing Dynasty bureaucrats employed your exact logic, arguing that the astronomical costs of industrialization and rail were a waste of resources better spent elsewhere. By prioritizing short-term stability over "expensive" technological leaps, they missed the industrial window entirely. Two decades later, they faced an industrialized Japan in 1894 and suffered a total collapse. The "waste" of one generation is frequently the essential infrastructure of the next.