Except Google is one of the most profitable companies on the planet, despite massive spending on AI and AI chips.
They make their own AI chips, unlike most other AI companies.
Another arrogant H1-B wants to tell Americans how to live.
I often work in a data center. I can tell you that plenty of hardware gets used after five years. A lot of it (wires, routers, switches, cabling) can last much longer. Of course, the old chips will just keep on doing what they do, just not as fast. The IBMs who don’t invest in it at all will wind up leasing it from those that do, or lose business.
I do not buy into this idea that AI is going to turn the world upside down in ten years. But it will have a role, and people will figure out a way to monetize it.
When Facebook/Meta went public, the math didn’t work out for the amount being capitalized. Tesla and nVidia’s capitalization relative to competitors do not seem to be connected to reality, and yet, there they are. No one talk’s about the ability of Meta to make money for stockholders even after a decline in the use of some of its core products.
The upfront costs of AI is huge. However, once it is established, the income from it is forever.
I have heard there will be satellite, solar powered data centers that will reduce cost greatly.
Anyone who thinks Amazon and Google aren’t getting subsidized by the intelligence agencies hasn’t been paying attention.
After 5 years, a used NVIDIA RTX 3090 graphics card is still useful and still worth about 50% of its capital cost. It’s time for Arvind Krishna to go back to India and start a sour grape farm.
Interesting. I’ve been saying the same thing. Very hard to make a decent rate of return on such a massive and fast CAPEX program. There are only two industries I know of that have similar spend patterns, Oil and Gas and Movie making. Oil and Gas often settles for moderate rates of return and very good cumulative MOD funds flows through the out years. If you don’t get your money back fast you would be better off putting in in a bank.
These things look like Ponzi territory to me and NVIDIA are the ones making the real ROI.
“an investment about equal to Tesla’s current market cap” with a PE of at least 250. Lots and lots of blue sky built into that market cap.
I bet IBM will keep lagging behind.
Remember the story about Elon Musk wanting one of his data center closed down because it wa costing more than it was making? Two employees were fired over it and for telling Musk it would take months to shut down. Musk went to the center and cut the date feed cable with a pocket knife and shut the center down.
AI will be a winner as an ‘add on’ to make products and inventions. As a ‘stand alone’ it’s not gonna make it.