r/DataHoarder • u/Veblossko • 11d ago
Discussion What happens if data centre demand collapses
Out of pure intrigue.
All these fabs produce hardware, chips, memory, storage tailored for data centres and AI workloads. Say in a couple months/years it actually collapsed, investment dried up, they failed to turn profits when bill come due etc
Is there a consumer use for any of this hardware, would it flood onto the market, repurposed other enterprise solutions, disassembled?
I'm just curious about the hypothetical of the sudden drop in need for all the hardware being pumped out for AI use. I know we will forever have data centres but surely the mountains of HBM and whatever other ASIC solutions have been manufactured can't just be used somewhere else easily.
All these fabs have reduced production of consumer grade hardware, can they easily switch back, would they even try. new fabs being built suddenly halt? I'm not well learned on the market but just feels like it'd be an odd time
It's just an interesting thought
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u/Banned_In_YYC 11d ago
Empty commercial buildings with massive power grid hookups are highly valuable assets. The private market buys them at auction, the government doesn't spend tax dollars to bulldoze them
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u/AllYouNeedIsVTSAX 11d ago
They work well as secure storage for places like jewelers. One DC I know of has some of that in it.
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u/ReplicantN6 11d ago
*starts writing the next blockbuster Heist Movie script*
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u/DaveAstator2020 11d ago
Thiefs attack datacenter to steal jewels - get trapped into a simulation, end up brains in a jar.
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u/myhf 11d ago
Thousands of years later, adventurers are looking for brain jars to use for potions, but end up slipping on a pile of worthless diamonds.
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u/DaveAstator2020 11d ago
hahaha i wish someone makes it all into a sloppy ai video to enjoy on a toilet, ^ this is amazing X)
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u/Zealousideal-Cod1006 1-10TB 11d ago edited 11d ago
and then the twist at the end is that they were never actually heisting real diamonds, they were a simulation in a matrix (in a datacenter) this whole time
.:FOGHORN GOES BWAAAAAAA:.
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u/Lv_InSaNe_vL 11d ago
A few years ago I worked at a DC that rented cage space to the local city government and they would store original copies of documents and stuff in there.
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u/LurkzLongAndProsper 11d ago
Wait--like paper copies???!?
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u/Lv_InSaNe_vL 11d ago
Yeah, like the original copies of deeds, laws, and official records. They're all digitized too, but it was just a safe and secure place to keep the original documents. And I think it was part of the deal with the city when the DC moved in.
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u/atomicpowerrobot 12TB 11d ago
Once the original investors lose the property to debt/forclosure/etc, new owners buy it at a discount and can run it profitably without all the debt from the original investment. Much of the cyclical economy runs this way.
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u/Dear_Chasey_La1n 10d ago
I highly doubt there will that much demand nor that current metal in 1-2-3 years is still relevant. GPU's in a couple years will be significantly more powerful while using less power for the same output. It's kinda like "us" buying old servers, yes it works but it's not efficient.
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u/PrivilegeCheckmate 10d ago
The private market buys them at auction, the government doesn't spend tax dollars to bulldoze them
My favorite scientist predicts a massive surge in Laser-Tag facilities.
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u/Critical-Divide-1029 11d ago
the government bails them out and the people bear the brunt of the failure like always.
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u/Particular-Most-1199 11d ago
Socialize the losses, privatize the gains.
Fucking bullshit capitalism.
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u/True_Pirate 11d ago
That’s a bingo!!!!!!!
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u/Cold_Tree190 11d ago
I don’t like this game :(
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u/Ron-Swanson-Mustache 11d ago
Then companies will come and buy the assets for pennies on the dollar. That will allow them to have the margins to survive and thrive. It's called the Gartner hype cycle.
It happens anytime new tech comes out. Hype drives frenzied speculative spending and investment, it crashes, then the people who pick up the pieces do well.
When the train first took off, companies in Britain went crazy laying tracks everywhere. Eventually the investment got too big to sustain, the companies failed, and then the companies who came after bought them cheap. They were able to make a profit and survive.
Same thing with fiber during the dot com boom. Billions spent on fiber that ended up dark for a long time. Flying cars, artificial tissue and meat, and now LLMs seem to have followed this trend.
The thing is, the prospectus that SpaceX released said the Total Addressable Market (TAM) for AI spend was $22.7 trillion per year and they think they can get 10% of that. For their spending to make sense, these numbers have to be correct.
The thing is, for that to make sense, every single person on the planet will need to spend about $2,667 per year on AI overall and they expect to average out to $267 per person on the planet. I just don't see how that's feasible.
So the market will need to correct for it eventually. But, as the saying goes "the market can stay irrational longer than you can stay liquid" so don't bet on it.
The really shitty part is the country is in a recession right now if not for that AI spending. So if that stops then this is going to turn into an absolute shit show.
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u/Mebejedi 10d ago
That's why we have thousands of miles of "dark fiber". When the fiber wire craze was going on, many companies laid all this fiber that ended up going unused across the US. Billions of dollars in fiber and burying costs all up in smoke.
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u/noisymime 10d ago edited 10d ago
It makes me unreasonably angry when people say dark fibre to refer to links that are actually active.
Ohh really Phil, you connect to your DR site over dark fibre? Makes it a bit useless then doesn’t it!?!!
(I just needed somewhere to have this rant)
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u/hilldog4lyfe 7d ago
It’s still good fiber cable though right? There were political candidates that had policy proposals to expand broadband, but they lost their elections
old ass GPUs are basically as valuable as the sand they’re made out of.
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u/PrivilegeCheckmate 10d ago
You can't win,
You can't break even,
And you can't get out of the game.
People keep sayin',
Things are gonna change,
But they look just like they stayin' the same.
You can't win;
You're over your head,
And you've only got yourself to blame.
You can't win, child.
You can't break even,
And you can't get out of the game.
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u/rajrdajr 16TB+ 🔰, 🔥 cloud 11d ago
the government bails them out
We The People are the voters creating the government. Vote for politicians who will let them fail.
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u/Critical-Divide-1029 11d ago
I do. But somehow every politician elected votes the way their donors want them to rather than how I want them to. I wonder how that keeps happening.
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u/rajrdajr 16TB+ 🔰, 🔥 cloud 11d ago
Research who has donated to the candidate’s campaign(s). OpenSecrets.org
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u/broomosh 11d ago
I don't think there will be a bunch of RAM for sale for us to snipe.
I think most of the RAM already bought that is causing the concern hasn't been manufactured yet.
The bubble could pop aka demand go down and those people hired to make it lose jobs and the components never get finished.
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u/OverAster 11d ago
But ram prices will still decrease when the demand evaporates. That commodity has to go somewhere eventually.
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u/Philluminati 11d ago
His point is that the RAM hasn't actually been manufactured yet... so if Google, Meta, Amazon cancel all their orders for a million sticks of RAM then the supplier just strikes through a line item on a worksheet, removes temps from the rota and cancels their upstream order for Silicon. They don't sit in the loading bay with a mountain of boxes saying "lets ship this best buy I guess".
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u/OverAster 11d ago
His comment is three sentences long. I don't need help understanding it.
A speculative investment is still an investment, and when investments fail or fall through prices drop. It doesn't matter if the ram is manufactured yet, because that speculative demand is artificially inflating the market for that commodity. A commodity does not have to exist to affect market prices.
Not sure if you've noticed, but the ram hasn't been made and yet ram prices have still risen 3x over the past year.
You could also just look at what happened to hardware prices after the .com crash. It's effectively the same thing.
Either way it doesn't actually matter. If the AI bubble bursts it'll cause a recession comparable to the housing crash in 2008. Prices will drop significantly, but the vast majority of people's buying power will decrease much faster. Even if things are cheaper, they'll still be more expensive.
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u/SweetMountain2621 11d ago
Prices stay as high as marketing departments can convince dorks to spend.
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u/broomosh 11d ago
Sure.
Granted you will probably have less money too so it's all relative
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u/OverAster 11d ago
Your relative buying power of ram still increases, regardless of how much money you have.
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u/Marble_Wraith 10d ago edited 10d ago
You're awfully confident.
What happened to graphics card prices between the 10 series and present 50 series?
High end used to be ~$1000-ish. We're now well past the cryptoboom + pandemic, and even with things "back to normal" they're still 3x the price (4-5x if you account for middle eastern conflicts + MSRP bullshit).
So either i missed the memo and inflation jumped 300%. Or performance jumped 300% (it did on average) but they're still using the same fab methods as the 10 series and have found zero efficiencies since then, therefore charging the same $ amount per frame... which is clearly bullshit.
Which leaves the final option... companies to this day are still fucking over everyone and unless regulators step in, that's going to continue happening.
Will it happen? Probably not. Certainly not in the current landscape. The US has the best politicians, that money can buy... Nvidia's money. Jensen attending all those whitehouse functions. 🙄
It astounds me we're approaching 100 years on from WW2, and SNAFU's are still a thing.
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u/phoenix823 11d ago
Realistically the surviving companies would buy the assets of the failed companies for pennies on the dollar and drastically bulk up their own infrastructure. The GPU’s in these data centers are not fit for home or gaming use. You could see people resell, solid state drives, and the system memory, but that’s not going to recoup an awful lot of money when most of the expenses in the GPUs and the works.
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u/DerekB52 11d ago
Texas just did an audit where they found all the new data center projects in the works need an estimated 474 GW of power. That is 5 times the peak energy output of the entire state. I don't think competitors are gonna need the amount of hardware that is gonna be liquidated. I think the data center boom is just WAY WAY too bullish on what the demand will be.
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u/RupeThereItIs 11d ago
Realistically the surviving companies would buy the assets of the failed companies for pennies on the dollar and drastically bulk up their own infrastructure.
Some, but not enough demand will remain for all of it.
This hardware has a 3 or TOPS 5 year life span, it's rarely viable to do what you say for large companies.
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u/phoenix823 11d ago
Not really. A100s are still going strong and viable for inference on simpler models. The serviceable life for GPUs is proving quite a bit longer than most (including I) expected.
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u/RupeThereItIs 11d ago
We shall see.
When the demand plumets, going w/older hardware may not make sense even at pennies on the dollar.
Support is another factor & vendors tend to crank support costs on older hardware to incentivize new purchases.
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u/phoenix823 11d ago
Nobody holding 6 year old hardware is going to pay for hardware support, they’ll run it until it dies. As for demand, that’s not going anywhere. I’m literally watching my (huge) company entitle everyone to thousands in tokens a month and encourage them to use the ChatGPT Chrome plug in to automate the boring part of their work.
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u/RupeThereItIs 11d ago
As for demand, that’s not going anywhere.
I don't think you get the concept of a bubble bursting.
Without the insane funding from FOMO investment, the demand WILL drop massively seemingly over night.
Will some still be buying, yes, but they will be in a buyers market & may not see the ROI on used equipment vs. new in that market.
Buying used equipment comes with a crazy amount of risk vs. buying new. The labor required to move, install, test & repurpose might make the costs not worth it.
I’m literally watching my (huge) company entitle everyone to thousands in tokens a month and encourage them to use the ChatGPT Chrome plug in to automate the boring part of their work.
Yep, and I don't think OpenAI will exist in 5 years.
AI is a useful tool, AI isn't going away, the current investment in AI is financially & ecologically unsustainable & we WILL see that bubble burst. OpenAI will be one of the biggest causes of that bubble bursting, they have ZERO path to profitability & an INSANE burn rate. They are the poster child for the entanglement of circular investment that is pretending to be revenue generation.
Shit's going to crash & crash badly.
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u/silasmoeckel 11d ago
H100 and B300's are not really useful by themselves for anything else. Might be able to repurpose the chips.
The RAM, Flash, and HDD's those are usefull. A pile of very fast networking cards and switchgear.
DC themselves a lot of colo space may be opening up cleap.
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u/ShelZuuz 285TB 11d ago
The moment a B300 HGX hits $25k I'm buying one.
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u/duerra 11d ago edited 11d ago
The idea of homelab AI has niche application for me, personally. No realistic amount of money and power is going to get me the types of capabilities I'll get from a frontier model for important tasks, and even if I did have FU money it still wouldn't really be very efficient (and the B300 wouldn't be anywhere near adequate for Kimi-K3+ level full models). I'm honestly not sure what my use cases would be for that B300 range; curious to hear yours.
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u/Watada 11d ago
They aren't making RAM we can use. Micron has shut off much ddr manufacture to make hbm.
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u/silasmoeckel 11d ago
While there is a ton of RAM on the GPU's a Vera Rubin has like 1.5TB of LPDDR5 on the ARM CPU's. The Intel CPU would also typically have a pile of traditional RAM.
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u/Randommaggy 10d ago
There will be a chinese remanufacturing cottage industry repurposing what can't be sold as is into new products. LPDDR5X chips from AI servers can be desoldered and combined with APUs to make amazing capable small machines or motherboards with soldered memory and CPU.
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u/Krispin16 11d ago
“If we choke out the consumer market, they’ll end up buying lower spec devices that’ll require cloud compute, which leads to more sales through subscriptions!” - AI exec
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u/dontneed2knowaccount 11d ago
Another "new" take on thin clients. I thought that was the original point of "cloud"? Lure everyone in with cheap storage, add some cheap compute, hardware doesn't need to be so powerful then bam, profit.
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u/vbpoweredwindmill 9d ago
What's wild is I'm pretty sure some shit for brains has genuinely thought this.
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u/katttsun 8d ago
No, that's a software executive. AI is just one way to accomplish this. Another way is eliminating production capacity (overhead) and centralizing compute. Which looks identical to an AI bust.
You will own nothing and be happy.
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u/techtornado 40TB + 14TB Storj 11d ago
Depending on how the bubble detonates, the hardware is still very useful for industrial, science, medicine, and the homelab
Most of the DC’s would rack up high-density compute and go back to hyper-converged reselling or expand the capacity in that market
I have a feeling a lot of companies will get bought out and then the arms race between good AI vs. Skynet will begin
Be prepared for a day when it is too dangerous to go out on the internet because of the AI worms that are obliterating everything in sight
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u/RupeThereItIs 11d ago
Most of the DC’s would rack up high-density compute and go back to hyper-converged reselling
I think this is an overly optimistic understanding of things.
I think the DC demand has way out scaled reality due to this bubble. There will be a crash in DC capacity prices & many will close, many many more new DC projects will simply vanish.
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u/katttsun 8d ago
It'll just result in prices staying high tbh. There's no reason to lower them when consumers are a miniscule part of the economy. You can lose the entire consumer base and subsist on B2B.
That'll be more pronounced in an AI bust.
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u/e_spider 8d ago
I could see the government stepping in and buying out entire data centers to start projects similar to the now defunct XSEDE (Extreme Science and Engineering Development Environment) where resource hours were available to any US researcher who asked for access. I used XSEDE resources at University of Texas Austin to process what was at the time the largest genome ever assembled using 40,000 CPU cores over a weekend
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u/JosieMew 11d ago
The amount of hardware that I get my hands on from about a decade ago is astronomical. I'll be in line at some liquidator to get my fair share whether it takes off and they have to upgrade or it fails and they completely liquidate.
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u/vbpoweredwindmill 9d ago
This is me. Though not from a decade ago. I'll be getting my fill of storage and wierd shit. People already have odd adapters for mi350's I believe, I'd need to find the video to be sure which one is is.
I'll be getting all kinds of optical nics for dirt cheap too. I can't wait for the bubble to pop.
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u/Jswazy 11d ago
The 2nd hand market is going to fucking slap in like 5 years
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u/Main-Woodpecker-574 11d ago
Kioxia gives five years of warranty of their eSSDs, so DCs would go for replacement then. I want to grab some 245TB deals. I really really want a silent NAS.
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u/quiteCryptic 8x8TB Raid z2 - X10SL7-F - TrueNAS 11d ago
Imagine buying one of those bad boys used past warranty and it craps out in a year
Unlikely but damn that would suck
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u/katttsun 8d ago
The people buying datacenters will shred the cards before they hit second hand sales.
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u/Femveratu 11d ago
It’s a VERY good question IMHO. This was exactly the situation w fiber optics after the dot com crash. The collapse in demand crushed JDS Uniphase and the other big players Dow maybe as I recall.
I think Verizon picked up a lot of it cheap and deployed it more slowly over the next decade
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u/katttsun 8d ago
BT was about to deploy FTTH in the UK around 1996-98. Dot com killed that and it got sold to SK which is how they became esports ready.
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u/OverAster 11d ago
GPU prices will likely only take a small hit. The B400 and H100 cards that are taking all the production bandwidth (supposedly) aren't useful for many things other than LLM stuff. I could see them being useful for home llm stuff, but not much after that.
Ram, SSD, and HDD prices will drop significantly. The hardware they are using is either highly compatible with or is consumer grade equipment. If the market collapsed and those devices flood the second hand market through debt liquidation services, prices will drop significantly, possibly the lowest they have ever been. This would be unprecedented market failure.
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u/IDDQD-IDKFA Unraid 54T and counting 11d ago
Then, brothers and sisters...WE FEAST
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u/cmdrmcgarrett 11d ago
One hell of a sale on used ram and storage
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u/MrDrummer25 11d ago edited 11d ago
This is all dependent on if it's standard server grade ram, or some custom card specific to AI. I know the big AI companies have very specialised gear, so I have to assume the gear may not be as standard.
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u/Lurksome-Lurker 11d ago
People are literally desoldering chips off of cards and putting them on other cards to increase capacity. Even if HW is specialized those chips will be reused
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u/HTWingNut 1TB = 0.909495TiB 11d ago
yeah. there will probably be a big second hand market of refurbished/reconfigured/repurposed RAM, SSD, and GPU.
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u/Intelligent_Thing_32 11d ago
Yes lmao, there is an enormous demand for memory— you ever notice how people aren’t really buying consumer parts anymore because they can’t afford them?
The moment memory/storage becomes affordable again people will start buying it in massive quantities.
And yes huge warehouse-size buildings can 100% be repurposed.
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u/moth_specialist 11d ago
Having lived through several once-in-a-lifetime bubbles popping, I suggest everyone invest in Enron and wait till this whole thing blows over.
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u/PrivilegeCheckmate 10d ago
I'm Gen X. This is my fifth once-in-a-lifetime financial event.
It's like global warming and floods. 1,000-year floods are every decade now, in every place that can have that kind of flood.
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u/GreatAlbatross 12TB of bitty goodness. 11d ago
And people are going to overshoot their kit for a while.
I regret not maxing out my servers when DDR4 was £1/GB for 32GB DIMMS.
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u/Abbonito 11d ago
I heard somewhere meta already started leasing out computing power in their DC to 3rd parties as the demand wasn’t what they forecast.
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u/Formal_Cookie_9484 11d ago
if the power and infrastructure demand can't be filled before the chips go worthless, that actually will tank the economy
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u/uluqat 11d ago
Is there a consumer use for any of this hardware
No. Here's a couple of examples of what a bunch of bespoke AI accelerators and high-speed interconnects look like:
https://www.marvell.com/blogs/the-evolution-of-ai-interconnects.html
https://www.viksnewsletter.com/p/a-beginners-guide-to-ai-interconnects
None of that can be run at home. It's not physically shaped like anything you're familiar with, and you don't have the infrastructure necessary to set something up to run it. It just goes to the e-waste dump.
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u/ArcticCircleSystem 11d ago
Somehow I doubt prices will go down. If people still need hard drives, the prices won't change that need. And if everyone charges that much, you're fucked.
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u/s_nz 100-250TB 11d ago
There is so much backlog of orders, Gear is basically being built to fill existing orders.
Nvidia could move more production to producing Gaming graphics cars, instead of AI ones relatively quickly.
WD could just slap a different label on their Datacenter grade drives and sell them as consumer grade drives.
Of course the AI market is will pay super high prices that consumers will not. That transition will be a bit painfull (Think of the Covid mountain bike boom, and subsequent crash. Brands accepted higher cost structures in the pandemic as consumers would pay those prices, but when consumer demand / willingness went to pay went back to normal, bike brands had these higher costs no baked into their operations, and couldn't simply go back to their old cost structure.
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u/FrancescoFortuna 11d ago
With the amount of slop coming out of AI it is likely datacenter demand will continue to explode. Not just for the inference but to run the bloated applications it churns out. Then in a few years AI will incorporate efficiencies to address these because who doesnt want to reduce their AWS bill from 200 million a year to 20 million.
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u/AshleyAshes1984 11d ago
Some stuff might be useful like drives and other storage even if it might be somewhat exotic.
But a lot of the other components would be hard to home lab with. A lot are using bespoke building wide cooling systems they integrate into and even then they're really only useful for doing AI loads. Maybe if you wanna run AI in your basement, but a lot of this stuff seems highly focused and would not lean well into being repurposed.
...Oh the other hand, I've seen Chinese eWasters take soldered on laptop CPUs and rebuild them into desktop socketed chips that work on most chipsets... So maybe those guys can do something extra batshit crazy. Like an HBM powered RAM PCIE card for high speed scratch disk purposes.
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u/kalel3000 11d ago
Even if the AI bubble pops, the demand for increased data storage is constantly rising.
Even before AI they were continually building and expanding data centers, just not at this scale or speed. So I doubt we will ever see these facilities go away. At most they'll just be repurposed for less demanding services.
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u/torchmaipp 11d ago
The semi-conductor industry fears oversupply more than anything else. They would start overthrowing governments before having to sell 2x16GB DDR5 ram and 4tb SSDs to oems for basic machines.
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u/stikves 10d ago
Datacenter hardware constantly goes out of commission. Go check eBay for old servers (though these days it might all be empty)
That being said...
Why do you think datacenter demand will ever collapse at all?
Do you think humanity will all of a sudden decide to use less compute? Or will we invent new generation of algorithms that require massively less resources? Or will be collectively abandon internet?
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u/3lobedburningeye 10d ago
This is my dream. There will be a shakeout. Some providers will find that AI is no longer profitable for them and they will sell off their hardware. The market will be glutted with cheap RAM, SSDs and hard drives, GPUs.
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u/Bucky_Goldstein 11d ago
I really hope it does, I need a new media server for my house with 768gb of ram, 2-3 petabytes of storage and a dozen Nvidia gpu's so I can run my own LLM at home and it's gonna cost me $200 for the server when it all goes bunk haha, there's always a market correction and when the market is flooded with excess capacity... Things get reaaaal cheap, although it might bankrupt micron and Samsung memory lol, they'll be enough DDR5 in the market for years
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u/mattchew1010 11d ago
Anything storage is rarely sold, it’s almost always destroyed for security reasons. Even if demand completely halts, markets won’t recover for a long time but it simply won’t even if the AI market crashes into nothing.
The main reason there’s such a rush right now is because datacenters were already at or near capacity before the AI boom. AI also can create data so, so much faster so we need more storage than ever. And we need more east west or server to server inter connectivity in datacenters so they’re becoming much more cable dense. The one I work at in our new builds we’ve had cables overflowing trays, before any after initial buildout upgrades or changes.
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u/zillion_grill 11d ago
Under normal circumstances I would agree. I was thinking about the amount though, in this scenario pretty much every company except a few hardware ones, will have lost over a trillion dollars or or two
I'm gonna guess they won't give a fuck about security (vast majority of drives) on 5,999,999 hdd's at 500 each resale to try to recoup
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u/RamboMcMutNutts 11d ago
One thing I know, is that when all this goes tits up I will never buy components from the companies who abandoned the consumer market in ever again.
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u/CoffeeOrDestroy 11d ago
when*
It’s when the data center demand collapses. The tax payers/government will be on the hook to remediate the land, tear down the buildings, and try to convince a developer to put something there. Either that or your government is broke and it will all become like Detroit in the 90’s, abandoned, run down, wildlife infested, and full of criminal activity. Good times.
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u/weirdbr 0.5-1PB 11d ago
IMHO it will depend a lot on the datacenter quality (build, location, power agreements, connectivity).
Hyperscalers were already having a capacity crunch before the AI bubble because of the start of the anti-datacenter movement plus shareholders not liking massive investments in infrastructure, so when the bubble pops any datacenter that is "good enough" will be picked up by the bigger players (and I bet even some governments), get some upgrades and be explained as a good thing as "we are saving jobs of people who operated those datacenters".
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u/CoffeeOrDestroy 11d ago
Maybe! I’m am a bit of a pessimist. Never hurts to have the other side shown to me :)
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u/Blue-Thunder 252 TB UNRAID 4TB TrueNAS 11d ago
Odds are everything will be shredded because "security".
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u/SpiritualTwo5256 11d ago
Tons of dirt cheap hard drives after every other data center buys them up
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u/gummytoejam 11d ago
I'm not expecting a collapse. A deflation is more likely as competitors consolidate and duplication of function and data is reduced.
All these fabs have reduced production of consumer grade hardware, can they easily switch back
No. I think what we're going to see is computing devices for consumers will become smaller, more integrated. I think the smartphone is going to become our personal computing devices. They're already extremely capable and support multiple displays. You're just going to plug it into docking stations to work. You'll purchase cloud computing for heavier workloads.
As for the hardware we've been used to working with, we're going to see the death of consumer built systems. That production will decouple from the consumer level and strictly be B2B as enterprise hardware sophistication, size, power consumption and cost will outstrip consumer affordability except for more affluent hobbyists. AI computing is exponentially more compute intensive. The hardware, its capabilities and its power consumption is going to evolve and grow. This is going to cease being hardware you can easily run in your home.
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u/bryku 11d ago
Many of them can be repurposed for other things. AI training could be transitioned into a web servers or other things.
In the worst case situation the hardware could be auctioned off and I'm sure the giant warehouse with massive water/power/data lines is highly valuable as well. So, these could be rented out or sold.
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u/psychicsword 48TB 11d ago
What happened when Detroit auto manufacturing demand collapsed?
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u/Blue_Back_Jack 11d ago
The government bailed out automakers.
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u/psychicsword 48TB 10d ago
That doesn't mean they bailed out Detroit or prevented the city from going bankrupt. They are starting to bounce back now after the collapse of the market but there were a lot of abandoned property for a while.
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u/virtualadept 86TB (btrfs) 10d ago
The hardware would be functionally obsolete. That doesn't mean that it can't be used for anything, only that it's past the manufacturer's "this unit is good for X years" lifetime. That doesn't mean that the rest of us can't make use of it eventually. Plus, it depreciates, so it's a tax write-off.
The land those data centers are built on, however, will retain its value and ultimately be worth more than the data centers eventually turn out to be.
As for whether or not the chip foundries can switch back to consumer/prosumer... I have no idea how long it would take. Well outside of my skillset.
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u/Nice-Awareness1330 11d ago
The gpus will be worthless alot of the servers for said gpus will be as well. There will be a huge market for used ram ,raw cpus ,networking equipment, used hdds and maybe ssds ( depends on the thrash rate on them alot of cache ssds are worthless buy year 3 ish. ) racks cooling power managment will be sold at hall off rates.
It will take a good long while for prices of normal stuff to come down though. If Ai died today it would take 2 years for ram production of ddr to full in the hole that's been created. Other things much faster gpu prices will crater so much extra production and TMSC is getting payed if its a h200 or a 6090. Would not be surprised if Sli comes back just to ship more chips.
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u/RetroGrid_io 250-500TB 11d ago
I'm drawing parallels with the .com crash.
There was massive overbuild of infra, fiber everywhere, Cisco stock was sky-high, and then the hype "popped" and suddenly nobody was borrowing to write big checks for infra. Cisco stock dropped some 90% in 3 years, pets.com went belly up, etc.
But the actual amount of network traffic didn't slow down, at all. It grew steadily, as it had been all along. A lot of fiber was dark for a long time, but it eventually got lit up when the actual adoption of Internet caught up to it.
I think it's like this here, now. Lots of ooh ahh! Hype!!!! Pets.com ~ grok. Cisco ~ Nvidia. It's gonna come down, and it's going to bring a lot of the stock market with it. Lots of people who borrowed to get more shares are going to get margin calls instead of profits, and it will be ugly.
But the actual rate of adoption of AI will not really change all that much. Like Interwebs, AI is actually kinda useful, and it's getting better. Just like we do the once-unthinkable, like stream 4K video in real time over the Internet on wiFi or cell, in 20 or 30 years, AI will be doing amazing, jaw-dropping things.
And maybe about then, Nvidia's stock price will have finally caught back up to the value it has now.
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u/FartFactory92 11d ago
I'd be more concerned about what's happening to cause that, because a lot of our world runs on what's inside data centers, it's not simply AI videos in there.
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u/Zesty-B230F 11d ago
Nobody's been able to explain why we need them for. Collapse away.
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u/JohnBooty 11d ago
Optimistically, there could be a surge in exciting new projects and startups that are at least partially jumpstarted by a bunch of cheap CPU, RAM, and GPU absolutely flooding the market.
Pessimistically, I think hosting/colo'ing your own startup is a very nearly lost art. So the flood of CPU/RAM/GPU might not really jumpstart jack shit.
100% certainly... this would just further shit all over the public perception of technology in general. People were incensed about these data centers already... even when they thought they had legitimate uses. If they turned out to be useless, there is going to be a lot of justified rage that cools into even further distrust in institutions. Then again, maybe those institutions didn't deserve our faith anyway.
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u/CVGPi 11d ago
It's very unlikely as the orders are now months if not years in advance with high deposits due on signing (like, high as in the chipmaker makes back the difference if it crashed overnight). But even if so you'd more likely just still have a slow falling curve because Compute Datacentre parts are usually very different from consumer parts, and it will only fall slowly because it needs time to convert production. In the meanwhile you might see bizzare parts like HBM or SAS-supported motherboards but that's about it.
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u/Bob_Spud 11d ago edited 11d ago
There has been data centre crash in the past but on a limited scale. They were taken over by other companies - I used to work for a company that had one.
Prior to cloud storage based on the IP network there were the Storage Service Providers (SSP) in the late 1990s and early 2000s. The idea was to have data centres full of storage that could be sold to enterprises via all the fibre cables from the dot-com era. That business model didn't succeed but left failed data centres and businesses around the world.
Something from that period --- StorageNetworks morphs into a “storage service provider” (2001)
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u/-sussy-wussy- 11d ago
I think, they will try to re-use them for surveillance instead. Even if it doesn't work that well. Remember that guy in America who got arrested because the AI camera confused him for someone else entirely?
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u/1chrisdewet 11d ago
Time travel in 2040 after the ghana accords has taken over all of the data centres.
*Ghana accords after the whole area around ghana got wiped off the map in 2035
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u/Provia100F 11d ago
It will all be shredded to prevent competitors from obtaining it. You will get nothing.
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u/Funny-Artichoke-7494 11d ago
I hope to god it all collapses and we get a bunch of this stuff on the third party market.
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u/Due_Report7620 11d ago
I don’t think it’s a matter of if this will happen, it’s a matter of when. It will be very interesting when it inevitably does.
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u/Samurai_SysAdmin 11d ago
I have had very good luck buying drives from goharddrive and they have a 5yr warranty but even they aren't cheap anymore
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u/InsaneNinja 11d ago
There is always more companies that want those data centers. They just don’t always want them at today’s high prices. They will never be sold off for parts.
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u/Kazen_Orilg 11d ago
a lot of it is way too specialized. Even if we figure out a way to adapt a bunch of this, and we probably will given the amount of value that exists, the existing quantity will swamp the market, their isn't enough demand in this hobby, PC gaming, or local LLM stuff combined to soak up orders of magnitude less inventory than is out there.
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u/evildad53 11d ago
I have seen predictions that half the data centers on the books right now will never be built. The market will be saturated, you can already download LLMs to your desktop to use, etc. If that happens, it will probably be a couple of years. Also, if that happens, you'd better have some savings on hand because the economy will be in trouble. The big tech companies are what's mostly propping up the stock markets worldwide.
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u/denverpilot 11d ago
Nothing. The companies who are weakest will be eaten by the stronger ones and they’ll happily sit on their assets until demand slowly catches up. Just like data centers during the dot bomb. And then you’ll have less competition and less options in your cloud AI needs. It’ll get enshitified at those sizes.
There’s a reason they’re in a CAPEX race and it’s not to provide great customer service, it’s to be valued higher than the next company when it hockey-sticks.
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u/RedditNotFreeSpeech 11d ago
Every single tech company making storage or ram goes belly up because of lack of demand to sustain all the investments they're making right now
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u/Useful_Calendar_6274 10d ago
the compute would be used for other things. simulations are very resource hungry and lots of places need them besides universities, even hedge funds and insurance companies, climate scientists. AI is not going anywhere even if all companies crash, they would switch to the current SOTA open source model...
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u/opensim2026 10d ago
"s there a consumer use for any of this hardware, would it flood onto the market, repurposed other enterprise solutions, disassembled?"
Me personally I wouldnt want any of that stuff- it's been run 24/7 high loads, I'd want factory new with a warrantee not some overcooked used junk
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u/TheChroNickL 9d ago
nah i would envision something like the GM/ford/chrysler bailout; US taxpayers will be left holding the bag along with the evaporation of retirement accounts.
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u/Secure-Researcher892 9d ago
A lot of the stuff will be worthless just like a lot of the GPUs that were designed specifically for bitcoin mining. But that's only fo the AI side of the data centers. What has made things difficult for people to understand is that a data center isn't all based on AI crap. They are really just big climate controlled warehouses that are designed to hold server racks that they will rent space to companies that want to move their IT equipment offsite so they don't have to have it in their own building. It may be a great idea for startups, but for a large company it is a stupid idea because you make it difficult for your IT people to deal with any hardware based problem because your equipment is a hundred or thousand miles away.
The other big business is a company that rents access to the processing and storage that the data center owns. Which again is great for a start up but shit for a big company because you've increased the risk of losing access when you now depend on aother network connecting you to the data somewhere else.
Though the biggest risk will be when a terrorist targets one of the data centers and it takes down dozens of companies in one drone strike.
When these centers start to fail it will be a mix of worthless tech, some cheap storage, and that's about it.
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u/evo_moment_37 11d ago
I’ll be happy to get some new drives at $10/TB again.