Comment by bpodgursky

3 days ago

Everyone is interpreting this as a sign the bubble is bursting, when the actual story is costs for materials and labor are going up and delays are happening because so many data centers are getting built.

If Oracle was able to build the data center under-cost and faster than expected, that would be a better sign the bubble was bursting!

8 comments

bpodgursky

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toasty228  3 days ago

What does it change exactly? It's not like gas or materials are going to get cheaper any time soon. It can burst for a whole lot of reasons, including the 2nd coming of Jesus or resources price... it's not like people have been calling AI ressource intensive for years right ?

  • simianwords  3 days ago

    It changes because the usual story behind bubble is that all demand is fake.

    Stock market valuations measure future revenues. So if the reason is that the demand is so high that we are facing new bottlenecks, it doesn’t imply that the underlying capabilities are fake or that the demand is fake. Just that it’s another hurdle to cross.

    • georgemcbay  3 days ago

      > It changes because the usual story behind bubble is that all demand is fake.

      I don't think many people are saying all AI demand is fake.

      People are saying that there isn't as much demand for AI as is claimed by the frontier labs, which is pretty reasonable when you consider Anthropic has been floating the idea that their TAM is $30 trillion, approximately the entire US GDP.

mamonster  3 days ago

Right, so the presumably the revenue projections aren't increasing at the same pace and the financials don't make sense anymore. Which is potentially a sign of the bubble bursting.

  • bpodgursky  3 days ago

    I mean the literal guidance is that Oracle may not make money on the datacenter by 2028 because they won't be able to turn it on.

    How profitable a datacenter is, is kind of irrelevant to the convo, if you are unable to power it due to material shortages.

    • mamonster  3 days ago

      >How profitable a datacenter is, is kind of irrelevant to the convo, if you are unable to power it due to material shortages.

      It isn't irrelevant, because they have to make money to be built. The debt for these projects was already issued, so you have to pay the coupons. If Oracle doesn't pay the developer is gonna suffer on their end.

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