More and more mainstream analysts are identifying the coming AI crash, which is a good indication that it will happen soon.
So, what happens to all the data centers? They are already built but probably very expensive to maintain. Will many of them just be abandoned? Bought up by cloud computing companies? Scammers? Crypto miners? Can they be parted out and sold off piecemeal?
Will they be put to some productive use, or just become massive e-waste sites left to the locals to deal with?
I wonder how big is the bubble. But few years of cut to military spending? Or public bailout. I bet Trump will make sure it won’t burst during his presidency.
All this hardware is essentially worthless other than AI
AI isn’t going away, there may be some consolidation of providers and right sizing of costs but AI is here to stay. Too many big companies have invested too much for it to fail.
They said that about so many other things in the past
Like?
- fully CGI movies
- coal mines
- British Steel
- American Steel
- Enron
But we still have CGI movies, we still have coal mining companies, and we still have steel manufacturing companies. AI companies may fail, but the AI industry will continue, which was my point.
Aye, and there’s still slavery too.
But there’s far far far far far far far far far far less of it than before the “too big to fail” bubble burst.
And what’s left of it is niche and specialist, such as Prison.
Sure, let’s split hairs.
Avatar: Fire and Ash
You willingly watched that movie? Wild
That’s not full CGI? There’s live action in it.
As in everything in the movie being CGI
The operating costs of AI are prohibitively expensive even by the standards of US military budgets, and they are not the utility we were promised. Companies were told they could replace their entire workforce with AI and not only is that not true but now the subscription costs are going up.
It doesn’t matter how much consolidating you do the product still isn’t compelling and it’s still expensive as hell to operate.
Anthropic is expected to post a profit next quarter, it may prohibitively expensive to run but that doesn’t mean it can’t be profitable. But who knows, maybe they won’t.
I read somewhere that for every $1 they’re taking in in cash they’re spending $100 in operating costs. If they charge the amount of money they would need to charge in order to actually have net income they wouldn’t have any customers.
I’m not saying changes aren’t coming, if they can’t make a profit off it then they’ll need to adapt or die. So it will either get more expensive or more efficient, but I don’t believe the bubble will burst and there will suddenly be a fire sale on cheap data centres or their hardware.
The issue is really the use cases for AI have been way overblown. The AI companies sold it as an employee replacer. “It’ll cost pennies on the dollar, have better accuracy, and doesn’t need time off!” That’s not actually what it is though. Companies are coming to terms with AI being more expensive, less accurate, and dumb.
A piece of software I use at work is a great example and they barely oversold the capabilities. The software has a built in AI assistant which is pretty good at pointing you in the right direction to get the result you want. Then some genius realized it could also pull report data, so they removed some metric options from the reports and now I have to spend significantly longer prompting the AI to pull the metrics I want in a usable format. This is also far more computing power. So they decided to let you link other AI agents to their software so you could use another bigger model for “better results” (they don’t want to pay for all that AI themselves). Nobody bit, nobody linked to another AI because nobody wants to pay more. They’re quietly adding those metrics back to the reports now.
Not sure about the buildings themselves, but I’m pretty confident at least their contents will flood the secondhand market with cheap secondhand gear. I won’t say the crypto bubble has burst, but a lot of the mining rigs are being parted out and sold fairly cheap, and one specific crypto mining board has become popular as a DIY gaming system. (Currently doing a BC-250 “DIY SteamMachine” build myself).
As for the buildings, maybe we’ll see some creative uses like indoor farms or something. Or, perhaps, it’ll just be a mundane “AI datacenter becomes a generic data center”.
I’d guess they’d be repurposed into business centers or office space like we’ve seen with old malls, but malls were usually in populated areas where datacenters aren’t.
It’s kinda hard to reuse datacenter hardware for home use. Many connectors are different, form factors too. Not to mention the noise, in servers noise is about the last priority.
Selfhosting enthusiasts will get great deals, but I doubt it will become mainstream.
If my gaming PC dose not sound like a jet taking off, I’m not satisfied.
the bigger problem is, that AI optimized GPUs have terrible gaming performance
My stupid Ai side project would be fast as fuck though.
Crypto equipment has always cycled out to the market cheaply, it’s just usually not super useful second hand.
Based on where brick and mortar retail is right now (and assuming e-commerce continues to thrive), there won’t be much conversion of the data centers into anything useful due to how many buildings are already sitting idle. Maybe some will become distribution centers. But most will probably sit dormant and slowly crumble into disrepair.
They have great electrical connections. Fill them with batteries (not spicy lithium ones) and you have loads of local energy storage.
Lots of the difficulties with green projects right now is the electrical hook up, so they have all done the hard work!
Good point!
The equipment that AI data centers use isn’t really usable as consumer hardware, though.
It’s like the ASIC rigs used for Bitcoin mining, not the GPU rigs.
I’m pretty confident at least their contents will flood the secondhand market with cheap secondhand gear.
What market? Certainly not the consumer hardware market…?
My Need -> eBay -> [server part search term] -> Multiple inexpensive listings with large quantities available -> Buy -> My Need Met
Replace “server part search term” with full rack servers, switches, SFP+ modules, RAM, power supplies, pulled HDDs/SSDs, and/or any other part I’ve bought used that was a corporate/data center pull.
I don’t…none of that answered my question?
“Homelab nerds” are a market unto ourselves. We get most if not all of our gear secondhand from eBay or similar, and those storefronts on ebay are run by electronics recycling companies that get their inventory from data centers or corporate offices when they shut down or do hardware refreshes.
As for the buildings, maybe we’ll see some creative uses like indoor farms or something.
Nope, though I admire your optimism. They’ll get repurposed into concentration camps.
Hopefully cheap parts, but more likely just another excuse for higher consumer prices on everything.
The RAM is the HBM kind that won’t fit in your motherboard at home. The GPUs tend not to have video outputs, require power supplies around a kilowatt, and powered external cooling. The whole lot of going to landfill when the bubble bursts.
The storage is reusable, I think. You might get a deal on SSDs and hard disks.
Oh just wait and see, you’ll find out how fast people will come along and scrap the metal and scavenge the RAM and other parts…
Apparently the US government is looking to give a massive bailout under the guise of “public partnership” so the public will pay for them and then corporations will get to use them and not pay us more than likely. They’ll be put to use, we’ll pay for them to take our jobs. It’s really the best situation possible…
/Wrist
2008 with hardware.
Hardware that dies in 5 years. At least the houses are still around assuming they didn’t get wiped out with those fires
American houses are built with cardboard paper, I wouldn’t be surprised if they’ve been destroyed by now.
I hate that this is actually pretty accurate, depending on which contractor you go with.
Whole neighborhoods were built during the housing bubble that had contaminated drywall (gypsum board) with sulfate VOCs that had to be gutted or torn down completely.
This is the most accurate assessment of the situation I have heard thus far.
Datacenters aren’t only used for AI. They could be used for cloud gaming, or in general for hardware-as-a-service models as a capitalist solution to high hardware prices for consumers.
Or just good old server hosting.
I’ve heard these can’t be repurposed as general servers, but I don’t know enough about it to say if that’s accurate.
I mean, disposable vapes can be repurposed as servers, it’s just a matter of how much compromises you’re willing to make
Hardware can’t, but the DCs definitely can. Their power and cooling capabilities will be over engineered for what you need but you can combat that by turning off excess capacity. It already has the base of what you need for normal DCs: space, Cooling, power and internet with corresponding redundancies.
One thing not mentioned here: Hardware has an expiration date. As hardware improves and becomes more performant, with reduced power consumption and heat generation, older hardware loses its value (I’ve got free servers and switches this way).
AI data centers have been built anticipating a demand that won’t happen, therefore they are in a market already over saturated, dominated by few and just selling allocation won’t let them cover costs if they are supposed to compete against the big 5.
I would say that in EU or few other countries where they care about data locality that could help, but chances are some providers won’t get paid, some people will lose their jobs, and taxpayers will give a bailout to the wrong people.
It’s actually l worse. The die shinks that help increase speed and density decrease durability. You can’t run lightning between walls a few atoms thick forever.
Honestly, I imagine a combination of all of these things. Some will probably be abandoned, some liquidated, some bought up by other keen companies. Whatever is most economically viable at the time.
They think they can be parted out (maybe), or at least that’s how they pitch it to investors. Never mind the fact that chips get old and depreciate.
What happens is recession for all, not just us.
Some will continue working just drop the compute price by a lot. Others will be mothballed for a while until someone can figure out how to run them profitably.
Expect a lot of new (or even resurrected old) use cases to pop up. For example I expect cloud gaming to make a huge comeback driven by cheaper prices. Us mortals won’t be able to afford our own GPUs for a while, but there will suddenly be a surplus of data center units for rent.
Do these datacenters even exist or are they just plans on paper?
My impression is we aren’t axtually building anywhere near what these investors are investing in.
Will there even be anything to repurpose or scrap on the other side?
I am not so sure.
The one about 30 minutes from me most certainly exists. The one 15 minutes away they are building at this moment is just as real. The noise is ruining everything. The air is smoggy. It’s not just an interweb myth or something. These things are a blight on the places they appear in DC area for reference.
Oracle is building one of there several plans and even that one is gonna be years behind schedule. The rest are hardly more than a slab of concrete right now. So forget parting out computer hardware, they barely even have more than a couple of new buildings to sell off and so much debt that cannot possibly be paid because it depends on openAI suddenly having astronomical increases in revenue to even finish the existing plans.
Other players might be further ahead but I suspect the biggest gain for the gaming hardware market will simply be the cancelation of supposed contracts to buy up things like RAM and the drying up of money to buy AI-specific GPUs, forcing NV to actually care a tiny bit about the gaming segment again.
I asked a chatbot that question a few months ago when I was trying them out. It came up with lots of bullshit ideas that make no sense to me, and one genuine use for some of that surplus data centre capacity: Scientific computing. Physics, astronomy, climate simulations, that sort of thing.
Aside from that maybe when all the big AI companies go bust their assets will be bought up by new operators who will continue to flood the market with cheap generative AI, without the burden of having to pretend that it’s possible to pay off all the debt incurred in building it. There are only so many high-energy physics simulations it’s worth doing and having that many GPUs is not really useful for much else that anyone’s discovered so far.
According to the Internet though it is said that the useful lifespan of a big Nvidia data centre GPU is something like 5-10 years, so it won’t be a problem for long.
converted into lasertag arenas
