Comment by mike_hearn

> All his numbers about costs, revenues etc are guesses or attempts to work backwards from off the cuff and frequently inconsistent comments by tech executives. They could easily be very far off.

Agreed, but I'd argue that Ed doesn't have much else to work with. I'd like to see journalists take this tack and start asking these executives to either back up their statements or back down from them. They should be held accountable for their statements.

Even if we dial down these numbers by a magnitude they are still insanely large and the AI companies do not seem to be making enough money to balance things out.

> He seems to think that the moment Nvidia release new hardware, all existing hardware becomes worthless. It doesn't and there are plenty of tokens being served by old GPUs. This makes all his calculations about how quickly datacenters have to pay off useless.

I agree that older hardware from Nvidia doesn't become worthless when Nvidia releases new, more powerful hardware. I have to point out that it certainly loses a great deal of value and that's not nothing.

> He doesn't seem to understand that datacenters have never been full of hardware on their opening day. A lot of his attacks revolve around this confusion - he learns that an opened datacenter isn't yet at full load or fully equipped with GPUs and thinks that means it's been delayed. I remember when Google first opened their facility in the Dalles, it took years for it to completely fill with machines.

Is that really the case? I mean, I read about the build out of these data centers being delayed all of the time. I read this last week and it seems roughly in line with Ed's ravings:

> A JPMorgan analysis last month found that more than 60% of data-center capacity planned for completion in 2027 isn’t yet under construction, and another 7% is delayed.[0]

[0]: https://www.msn.com/en-us/news/technology/america-s-data-cen...

It helps if you look at Zitron's work history and experience. He's a hype man and a games journalist. His opinions on this are whatever sells, not exactly whatever is correct.

This is alarmingly obvious whenever he talks out of his depth about things like how companies actually use AI and reason about business decisions.

They don't immediately become worthless, but they don't last all that long either

https://www.tomshardware.com/pc-components/gpus/datacenter-g...

> He seems to think that the moment Nvidia release new hardware, all existing hardware becomes worthless.

I am the OP and I totally agree with you on this one point. In fact the progress being made by open weights models strongly suggests that some of this hardware has much more of a life.

The overarching point he makes about incomplete data centres is that the current offering is running successfully on that very incomplete capacity, right?

What he is saying is that he cannot believe the demand exists to fill any of the unbuilt stuff, but much of it is still commitments that are going to have to be paid for, unless they can be backed out. He points to Nadella essentially confirming there will be overcapacity.

He also makes an interesting point that people tend to think "I can't get a GPU right now" means "there is intense, live demand for GPUs in data centres" when in fact the reason you can't get one is buy-and-hold. Including much of that new replacement hardware: it is being bought even the old stuff would (let us stipulate will) do the job.

I think he (or someone who interviewed him) recently said it reminded them less of the dot com boom and more of the Chinese real estate bubble.