[voncheese]

Yeah that's a good callout for sure, the spending here is nuts so agree that it's not "just another business that has to price itself right to be competitive".

I guess if the time horizons is long, like 20 years, then maybe the spending, as it begins to amortize, gets more in line?

I was thinking that a comparison could be to cloud providers, each of which had to spend a lot of money to build out datacenter before making money. Difference there is AWS proved the product first, so when Microsoft and Google came along, they knew it would work and be profitable. With AI, nobody has proven it will work and be profitable, they're all competing for that at the same time which is a potentially dangerous mix for the reasons you cited.

[DrewADesign]

The only way that this even vaguely works, best I can tell, would be on that decade-or-two timeline, but therein lies the problem: all this money getting pumped into data centers right now is going to produce data centers that are running old, inefficient, slow GPUs by 5-years-from-now standards. And GPUs are by far the most expensive part of these data centers… having the buildings is barely an asset. We’re investing all the money in right now’s technology in one of the fastest moving hardware segments and for some inexplicable reason, think that will lead to a sustainable advantage. What’s to stop someone 5 years from now, waiting for the dust to settle, then spending way less money for more compute and just mopping the floor with everybody in this sector… and that’s (unreasonably, IMO) assuming that local applications won’t become good enough to take too large a bite from their business before that.

And look at the difference in spending between their building out general-purpose-computing cloud data centers that even then, had potential use cases if the business failed. What are they going to do… start a massive, extremely expensive pre-rendered online gaming service? Only render Disney movies?

I dunno. None of this makes sense to me.

[zozbot234]

These datacenters are already running old, inefficient, slow GPUs from five years ago in addition to newly released cards, because anything newer than that is extremely bottlenecked and they need all the compute they can get. Why should it be any different in five years' time? Even nVidia is rumored to be about to bring back the RTX 3060 which is an Ampere architecture card that got released around 2021. It's just fine.

[DrewADesign]

If those data centers were good enough, they’d save themselves a few billion dollars and just do more of the same, wouldn’t they? Many current video games struggle on the 3060— it’s like 10 times slower for interference than a 4090 even. They’re reintroducing it because their upstream business of selling brand new insanely expensive GPUs required for every new data center is making it impossible for people to buy GPUs for their home computers. It says nothing about data-center-class GPUs except that every company currently has a burning desire to only have the latest and greatest GPUs.

[zozbot234]

The new GPUs are a lot better than the old ones, to be sure. They're also a whole lot harder to get ahold of in quantity. That's no different than the reason for officially reintroducing the 3060.

[DrewADesign]

That doesn’t make this more sustainable or viable in the long term, which is the entire point

[voncheese]

Yeah, conceptually this isn't all that different from new VM SKUs coming out in clouds. The costs and rate of change for AI hardware may be higher, and perhaps enough higher to mess up the math, but conceptually its a model that has been proven to work.

[petra]

Unless some disrutive technology comes along in 5 years time. And many are working on exactly that.