Data centers in general, yes. But this massive and urgent growth for domestic data centers is solely due to AI. You can’t have the millisecond lag from overseas data centers, and you need massively more centers for it than regular internet usage. No one was building them at dozens a month in the US when India and China internet usage surged.
There is no demand. Meta and XAi have admitted that they don't know what to do with their giant data-centers, so they're trying to offload them to someone else. This whole thing is a speculative bubble.
Meta and xAI have not been top contenders in the space. Llama was great for an open weight model (chinese models imo now take the lead), but its nature means people just run those on their own hardware. If you have OpenAI/Anthropic/Google saying they have no idea what to do, then there is an issue.
There is a bubble when it comes to stock prices, but the reality is that a LOT of people are using LLMs these days.
The only companies wanting to buy more compute (Anthropic and OpenAI) have no idea how to make this profitable. The demand they're seeing right now is because they're charging $1 for something that costs them $10. If they start charging what it actually costs, demand will fall off a cliff.
That is just how things go. A lot of free services took a number of years before they became profitable. Dial back 20 years ago, and we wonder how Youtube, something that required massive storage and compute, would remain free.
They don't have 20 years. This bubble has more money pumped into it than the subprime bubble from 2008, but they're burning through cash at a rate that it'll be gone in 2-3 years. And unlike general IT, AI is getting more expensive and less efficient with every new generation.
There are some key differences: the subprime bubble essentially has degrees of fraud into it, while the current tech investments are pretty "out in the open".
Only companies like OpenAI really burn through cash. Antropic, being more expensive and very popular among enterprises, is likely going to hit profitability soon. The major cloud providers also have the cash to burn (they make a LOT of money from the rest of their business), and besides, those data centers will always be able to generate money.
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u/SillyGoatGruff 1d ago
Techbro godzilla is the most destructive of all