IBM CEO says there is 'no way' spending trillions on AI data centers will pay off at today's infrastructure costs
IBM CEO has doubts that Big Tech's AI spending spree will pay off
IBM CEO Arvind Krishna walked through some napkin math on Big Tech's AI data center spending — and raised some doubts on if it'll prove profitable.Henry Chandonnet (Business Insider)
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sepi
in reply to Chris Remington • • •NuXCOM_90Percent
in reply to Chris Remington • • •There are layers to this.
Yes, there is zero chance any of these investments are going to turn a profit.
But research and technology is fundamentally built around developing capabilities for long term power (soft or hard). That is WHY governments invest so much into university groups and research divisions at companies to develop features of interest. You are never going to make back the money that funded hundreds of PhD students to develop a slightly more durable polymer compound. But you will benefit because you now have hundreds of new graduates aligned with fields of interest AND a slightly better grip on your military grade sybian.
And, regardless of what people want to believe, AI genuinely does have some great uses (primarily pattern matching and human interfaces). And... those have very big implications both in terms of military capability and soft power where the entire world is dependent on one nation's companies for basic functionality.
Of course, the problem is that the "AI craze" isn't really being driven by state governments at this point. It
... Show more...There are layers to this.
Yes, there is zero chance any of these investments are going to turn a profit.
But research and technology is fundamentally built around developing capabilities for long term power (soft or hard). That is WHY governments invest so much into university groups and research divisions at companies to develop features of interest. You are never going to make back the money that funded hundreds of PhD students to develop a slightly more durable polymer compound. But you will benefit because you now have hundreds of new graduates aligned with fields of interest AND a slightly better grip on your military grade sybian.
And, regardless of what people want to believe, AI genuinely does have some great uses (primarily pattern matching and human interfaces). And... those have very big implications both in terms of military capability and soft power where the entire world is dependent on one nation's companies for basic functionality.
Of course, the problem is that the "AI craze" isn't really being driven by state governments at this point. It is being driven by the tech companies themselves and the politicians who profit off of them. Hence why we are so focused on insanely expensive search engine replacements and "AI powered toaster ovens" rather than developing the core technologies and capabilities that will make this more power efficient and more feasible for edge computing.
And... when one of (if not ) the super powers is actively divesting itself of all soft power at an alarming rate.... yeah.
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BlameThePeacock
in reply to NuXCOM_90Percent • • •"There is zero chance any of these investments are going to turn a profit."
This isn't accurate. There's a zero chance ALL of them turn a profit, but there's actually good chance that one or more of them will return a huge profit.
If I invest $100 in a hundred companies, and 99 of those companies fail, you may think I'm a terrible investor. If that 1 company returns $50,000 on my investment though, I'm actually a fucking genius.
That's how venture capital works.
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ViatorOmnium
in reply to BlameThePeacock • • •LLMs are evolutionary dead ends. Very expensive ones at that.
Even the companies doing things where LLMs are actually good at, rely on companies like OpenAI so when OpenAI goes down so will they.
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tempest
in reply to ViatorOmnium • • •The real issue and what those AI dependent companies are banking on is that they can capture a user base and when OpenAI starts to reach the end of the road with LLM improvements and moves to the extract phase it can buy these little companies to ingest their user base.
Everyone else in that space will be instantly fucked since they will now be competing directly with openai while paying their margin but that's the bet they are making.
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CatsPajamas
in reply to tempest • • •lukewarm_tauntaun
in reply to NuXCOM_90Percent • • •SeeMarkFly
in reply to Chris Remington • • •It doesn't do any good if the artificial intelligence is operated by organic stupidity.
They cancel each other out.
megopie
in reply to Chris Remington • • •Because it’s not about the companies being profitable, it’s not about making products people want to use or pay for.
It’s about riding the hype cycle to maximize share price. Because the people making decisions are not payed based on the success of the company, but on the success of the share price and market cap.
fascicle
in reply to megopie • • •like this
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reksas
in reply to Chris Remington • • •Ech
in reply to reksas • • •like this
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DragonTypeWyvern
in reply to Ech • • •becausechemistry
in reply to Chris Remington • • •I used to work at IBM. This guy is a classic case of manager brainrot and has filled the top few tiers of the company with the same. The only reason they make money is the rank and file know how to feed them trendy bullshit that makes them feel smart, which happens to also be a good way of separating other companies’ dumb C-suite types from their money.
But even a blind squirrel finds an acorn every once in a while.
Tollana1234567
in reply to Chris Remington • • •