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Don’t forget that the data centres are owned by dedicated data centre companies and funded by loans issued based on the (declining) value of the GPUs that will be installed there, by the promised future sales of the datacentre resources to AI companies that lose more money with every additional query sent to their service, and also funded by rebates offered by the companies that are selling the GPUs, which will only pay out of the datacenre company buys enough GPUs.
It’s a fucking catastrophe.
Apparently these companies are spending 500b+ on a field that makes up to 20b in revenue.
They need 50x more revenue to pay off just the data centers.
Plus companies are creating holding companies to hold their debt on this financing so that their balance sheets look better. I would bet that Trump will let them write that off and bail them out though.
They need 50x more revenue to pay off just the data centers.
The product is already expensive; there’s been minimal tangible cost savings as a result of using AI and they still have the problem where more usage directly correlates with more cost. We’re not creating NYT Online where the cost of development is spread across n users and approaches $0 per user as it grows. This is much more like non-tech scaling costs. For every 200 people using the service in a given day, we need a new A380. If they use the service twice, we need to fuel the plane twice.
A new report just came out which shows that AI created the same amount of CO2 in 2025 as the entirety of New York City. So there’s also that. Add it to the pile.
It’s a fucking catastrophe
if you mean this particular situation: no, that’s just a bubble
if you mean capitalism: hell yeah—f*ckin catastrophe
Totally not a bubble. Totally!
That’s a whole foam party at this point
The difference is that this time industrial giants with infinite revenue are the ones invested, so it’s gonna keep going till the earth is burned to the ground ig
AI has just become another version of crypto.
self serving actions by a cartel of people to artificially inflate the value of something before dumping it for massive payout.
But SO MUCH worse. Crypto was much easier to ignore.
Was it though?
It was the same basic bullshit.
Crushed hardware demand, spiked prices, ridiculous wasteful energy consumption, etc etc.
Yes, it was. It wasn’t clumsily integrated into every aspect of life.
Forgetting how stores and everyone jumped on the crypto hype and suddenly were accepting crypto for payment everywhere?
Which died very fast due to the crypto instability and even the few second delay between you handing over crypto, and them immediately turning it into real money could result in massive losses.
That was so much less than what AI is now.
I very rarely saw crypto stuff in my day to day life. AI is everywhere.
During the rest of the year, florists or tulip traders, signed forward contracts before a notary to buy tulips at the end of the season… Tulip mania reached its peak during the winter of 1636–37, when some contracts were changing hands five times. No deliveries were ever made to fulfill these contracts, because in February 1637, tulip bulb contract prices collapsed abruptly and the trade of tulips ground to a halt.
Except unlike the Dutch who had a diverse trading economy and overseas empire, ours is crumbling and is largely underpinned on these massive speculative AI gambles on whatever Sam Altman says it will be worth in ten years time.
So very rational, much innovative market forces, totally different. Pay no attention to Blue Owl Capital’s $10 billion nervous flinch the other day, our data center economy is strong 💪
I wonder who will pay for all this mess?
slash s?
The tax payers. The tax payers will be funding the bailout, and are already funding the absurd tax incentives AI companies are being given
Wait till they learn that you need a system of governance you can trust to uphold contracts.
Its interesting cause this is really only an issue becuase the manufacturers aren’t willing to manufacture more for the increased demand as if they don’t believe it will be permanent demand.
Clearly, manufacturers can‘t just „produce more“ based on current trends. It takes years to scale the production.
True, but also notice the big 3 made no announcements of even plans to build any more, there is no long term future planned for this. They just shuffled machines around to produce more of a specific type of memory.
Open AI bought WAFERS not finished RAM. They don’t even want it, they just want to keep it out of the market to stop their competition.
No one buys unfinished wafers without a plan or capability to make a finished product. It’s unheard of. There is a decent chance all this product sits in a warehouse at open AI collecting dust.
https://medium.com/predict/openai-crashed-the-global-memory-supply-4cc7136c3e73
I’m no economy scientist, but this seems legit.
Borrowing money against the would be occurrence of everything stated above.
It’s a sloppy circlejerk.
Speculation in the market in a nutshell.
I like some of Henry George’s ideas about property tax. I believe a national property tax could be helpful under certain conditions. It’s generally considered to be a more regressive tax than income tax, and on It’s own, would disproportionately burden lower-income families.
A few ways around this might include:
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Adding a deduction for a fraction of the local, average property value on one primary residence. This would essentially mean no new taxes for the lower class.
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Allowing landlords to claim the deduction for tenants (Ugh, I know, but hear me out). This essentially imposes a penalty on empty housing, making hoarding a liability rather than an asset.
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Adding the deduction for privately owned businesses that are worth a fraction of the national average. That is, no new taxes on very small businesses, “mom and pop shops.”
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Adding a separate deduction for publicly owned businesses to the extent they are employee-owned with a weight factor for the standard deviation of the distribution. That is, if the CEO owns 99% and the other employees share the remaining 1, yes, that’s technically employee-owned and should get a very, very, tiny deduction. If everybody gets an equal share, maximum deduction/minimized (nonzero) tax.
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Creating a sovereign wealth fund into which this property tax goes directly and exclusively, overseen by an independent board. Board positions are one-time, 16-year terms, nominated by the head of government, and appointed or refused by a legislative majority within 120 days or else the appointment is automatic. Terms are staggered/overlapping among members so, one new member is appointed every 8 years. Removal procedure is by the standard legislative process used to remove the head of government. The board is tasked with investing and distributing funds.
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Using the board to distribute funds. One third goes into traditional welfare programs like Healthcare, unemployment, pensions, etc. One third goes into a basic income for the lower quartile of income, and one third goes into an income tax deduction for the lower 2 income quintiles. Hopefully this forms a conveyor belt for most recipients straight into the middle class, without abandoning those who just aren’t going to make it, for whatever reason.
I could go on for a few hundred more words, but you get the idea.
In conclusion, I like Henry George’s work, and I would like to see a modernized, progressive implementation. Property should not enjoy superior rights and privileges than people, especially not parking lots.
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Not really. All that AND the companies decided to voluntarylily make less.
They’re reallocating existing production to other other sales channels, output hasn’t been reduced.
BUT production isn’t getting scaled up either, which just shows hardware manufacturers think AI is a bubble too.
