Big corporations are not in the business of selling things and making profits. Their whole line of business is gaming financial markets.

In that regard, datacentres don’t need to do anything. It just needs to demonstrate some material ‘investment’ into Making AI Happen, presenting a potential for super duper revenues in the glorious future, and thereby securing outlandish valuations today.

I remember seeing an interview of Satya Nadella saying that he has thousands of GPUs he’s just sitting on, waiting to get enough power infrastructure to plug then in, so in short, they’re hoarding.

A few things:

• I think nation states anticipate this new wave of machine learning will enable unfathombly large surveillance and a new age of hurk cyber warfare.
• Some investors seem to believe that basically all fields will adopt “ai” with the same enthusiam and level as software. The film industry alone would need a hideous amount of computer hardware if that disturbing fantasy of everyone living in their own solipsistic culture bubble came to life.
• Humanoid robot wierdos are anticipating applying deep learning and computer vision to copy movements etc from humans with camera’s strapped to their faces (part of the reason glasses are being pushed again). Some of the anticipate enormous fleets of robots doing everything from manufacturing to warfare. This would need a lot of compute
• Nobody actually has any idea how to direct businesses or run nations, and a considerable amount of people at just following everyone else because everyone else can’t be wrong.

Oh also it’s entirely possible to make huge amounts of money in a bad idea as long as you get out first. I suspect a lot of investors and banks are anticipating being that person. Capitalism is hilarious.

You mean the government surveillance centers? All questions like there’s while you still can.

Maybe it’s to keep the existing assets from cratering in value. Storage and RAM prices have gone up in value, if all those assets returned to their sane values then many more loans would be upside down.

I think it is a combination of VCs really believing this is the next big gold rush and radical innovation which will change the world plus a few true believers who think we need all the … compute (I dislike the word) to run the acausalrobotgod who will fix all our problems (and ‘We’ need to prepare so China doesnt build it first).

To go back to the first group, when they say ‘dont get left behind’ they are bot addressing you or me, but other capitalists (as in people with money, not just people who believe the ideology is best)

Edit: wow this question attracted a lot of conspiracy theorists.

It’s a bubble in a specific subcategory of commercial real estate, and commercial real estate usually eats shit first when a recession hits. The tech essentially serves the same purpose as American consumer credit did in the runup to 2008, just one step removed.

mass surveillance, and dynamic pricing/ad targeting.

My personal conspiracy theory is the AI companies are being used as a front for a new Manhattan Project for the surveillance dragnet. All those flock camera feeds gotta go somewhere. Imagine being able to look up who, what, where, and when (and infer why) for any person or place in the US, linking online interaction to physical places in near-real time.

Here’s who it’s being built for.

ETA: What I see happening over the next decade, the AI bubble ‘pops,’ government quietly absorbs the (by then) mostly complete facilities and hardware as part of the bailout, then news outlets go silent about data centers and ICE activity while we fall deeper into a fascist hellpit.

Imagine Hitler’s reign, but this time there will be no Anne Frank’s.

They are for training new models, not running existing ones

My theory is that the data centers are just shell companies for farming tax credits. The various gov officials are all NDA’d and can’t won’t say what kind of deals they cut nor the kickbacks they’re harvesting.

Because the rich people that have invested into it want AI to be too big to fail. That way we’re forced to keep moving forward on AI, and the rich can achieve their dream of not paying workers.

They lose money, of course.

https://seekingalpha.com/news/4653029-coreweave-collapses-after-gartner-predicts-80-percent-of-neoclouds-will-evaporate-by-2030

The large tech companies (Meta, Microsoft, Google, Amazon) all know that software companies are going to go bankrupt. People will start creating things like Windows with LLM. Windows and software is obsolete. So these big companies that are sitting on hordes of cash, and know their days are limited, need to make a pivot. They also know that all the countries of the world are deeply in debt, and inflation is going to continue. Cell phones are becoming expensive, and will only get worse as inflation continues, and countries start devaluing their currencies. So the push is going to be (and Elon Musk said this flat out on Joe Rogan), new inexpensive devices will replace cellphones. They wont have a CPU or much RAM, because all the apps will be cast from Data Centers. The world will return to the terminal servers of the 70s. So Data Centers will have a use, for steaming all the apps. But the other thing is that the worldwide electrical grid is old, and can’t handle all the new power that’s needed for the Data Centers, and Electrical Vehicles. I saw a millionaire call the rebuilding of the Electrical Grid that’s taking place a modern day Industrial Revolution. So, the bigger part behind each data center is going to be the SMR (Small Modular Reactors) The small modular reactors are built in the same style as the nuclear reactors inside a nuclear submarine, or an aircraft carrier. They are mass produced, built like interlocking Legos, self contained, and run for 20-30 years without needing any more nuclear fuel added. They will power the data centers, and MORE IMPORTANTLY, they will be connected to the grid! So these large companies like Microsoft who bough the 3 mile Island reactor, will become hybrid tech companies, selling app subscriptions, cloud space, utility companies, selling electricity back into the system. It’s also important to get the cost of electricity down using the SMR, because the average person is going to be a lot poorer in the future. Here you go, the full scoop, you won’t hear on the news.

There is also a token shortage, Anthropic at least started noticeably throttling users like 6ish months ago.

Not saying there is demand at API price points since the majority of use still comes from sub’s, but still.