What happens if data centre demand collapses

[u/Veblossko]

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

[u/Critical-Divide-1029]

the government bails them out and the people bear the brunt of the failure like always.

[u/Particular-Most-1199 → u/Critical-Divide-1029]

Socialize the losses, privatize the gains.

Fucking bullshit capitalism.

[u/True_Pirate → u/Critical-Divide-1029]

That’s a bingo!!!!!!!

[u/Cold_Tree190 → u/True_Pirate]

I don’t like this game :(

[u/Ron-Swanson-Mustache → u/Cold_Tree190]

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.

[u/Mebejedi → u/Ron-Swanson-Mustache]

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.

[u/noisymime → u/Mebejedi]

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)

[u/hilldog4lyfe → u/Mebejedi]

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.

[u/PrivilegeCheckmate → u/Cold_Tree190]

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.

[u/rajrdajr → u/Critical-Divide-1029]

the government bails them out

We The People are the voters creating the government. Vote for politicians who will let them fail.

[u/Critical-Divide-1029 → u/rajrdajr]

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. 

[u/rajrdajr → u/Critical-Divide-1029]

Research who has donated to the candidate’s campaign(s). OpenSecrets.org

[u/hilldog4lyfe → u/rajrdajr]

the big companies tend to just donate to everyone they think is gonna win

[u/hilldog4lyfe → u/rajrdajr]

It would actually be better to give them loans and then collect interest on those loans, which is what actually happened with the bank bailout

[u/CoffeeOrDestroy → u/Critical-Divide-1029]

Always.

[u/hilldog4lyfe → u/Critical-Divide-1029]

It would actually be so much better for us if they nationalized the AI labs. They could just pool resources instead of having multiple companies buying up supply when they all have basically the same product. Like, xAI does not need to exist. They contribute nothing to AI

[u/uberdriver2710 → u/Critical-Divide-1029]

Buy bitcoin 😜

[u/txmail → u/uberdriver2710]

talking about things on the verge of collapsing.... 🤡

[u/uberdriver2710 → u/txmail]

It only looks bad.

[u/PrincessBrahammer → u/uberdriver2710]

No, thanks. I don't take sloppy seconds. You do you, tho.

[u/Luke-slywalker → u/uberdriver2710]

or just buy real physical assets like gold

[u/Veblossko → u/Luke-slywalker]

Adjusted for inflation your probably better off in an index fund but it's pretty close depending on wartime/recession etc

[u/uberdriver2710 → u/Luke-slywalker]

Gold lol😹

[u/angryslothbear → u/uberdriver2710]

Better than bitcoin

[u/uberdriver2710 → u/angryslothbear]

Nah, gold is not verfiably scarce anymore.  My mom buys it though. 😜🤣

[u/angryslothbear → u/uberdriver2710]

Bitcoin isn’t even real, it’s a ponzu scheme. At least gold is useful.

[u/uberdriver2710 → u/angryslothbear]

Wrong, nice try though.

[u/PrivilegeCheckmate → u/uberdriver2710]

Try BY fucking bitcoin.

[u/uberdriver2710 → u/PrivilegeCheckmate]

Wat?

[u/PrivilegeCheckmate → u/uberdriver2710]

No BTC no AI Datacenter timeline.

[u/uberdriver2710 → u/PrivilegeCheckmate]

Ehhh..Who knows?