[miki123211]

Because:

1. Factories take time to build.

2. Building factories requires capital to be invested now.

3. The return-on-capital will only be obtained in the next n years.

4. But if demand goes down, we'll have much more supply than demand, leading to a cutthroat price competition, which could prevent the factory costs from ever being recouped.

[HerbManic]

No 4 is why nobody is willing to really move on new fascilities.

China is doing it but that was for merely creating tech independence.

[itopaloglu83]

5. There are only limited number of suppliers and they’re making a killing from all of this.

Didn’t these companies collude before? I’m sorry but I don’t believe that they’re also using this opportunity to make as much money as possible as well.

[Modified3019]

And to add to that 4th point, there is a very real chance that many the “AI” companies that are buying all this hardware could go bankrupt at anytime and in rapid succession, leaving drive/memory manufactures with a bunch of unpaid orders and a second hand market now saturated with liquidated equipment.

Much like the GPU/crypto boom/bust some years ago, but on an even larger scale.

[rolandog]

> 4. But if demand goes down, we'll have much more supply than demand, leading to a cutthroat price competition, which could prevent the factory costs from ever being recouped.

Why not normalize that, if things don't work out, the government steps in, buys the business, and offers a better regulated version of the business?

Capitalism is generally touted as useful for innovation; but haven't we paid collectively for the initial investment for many businesses many times over now that there's little innovation done? By definition there's no innovation once the only thing happening in a business sector is consolidation.

So, I'd conclude that capitalism isn't useful to us at that point, and actually harmfully inefficient (too costly for consumers), so we'd be wise to do away with it by that point in favor of a more efficiently run operational/economic system... That would actually be innovative! What that system looks like, I'm not sure, but I imagine it's something like a cooperative.