r/antiai • u/Ok_Commission7932 • 11h ago
AI News đď¸ AI industry is about to default on debts
Data center operators that borrowed money to build them are starting to face pressure from the debt issuers. Soon enough we'll see bankruptcies tear through data center operators and chip manufacturers, and circular financing to AI labs will get choked off.
A huge portion of data centers will get sold for pennies to social media and cloud companies like meta, google and Amazon. Lots of unfinished ones will remain unfinished. At this point they are just expensive holes in the ground with a 2 year wait to even obtain chips and generators.
Soon the free slop era will end, sloperators will have to pay the full cost of training and inference, and most of them won't be able to afford it. People will need $10,000 dedicated computers to synthesize social media posts and images. Big production companies will keep making slop materials but the tidal wave of slop will subside.
People can keep arguing online that AI art is art, but no one will be able to afford to make it â¤ď¸
19
u/Classic-Trifle-2085 11h ago
Day 546 of someone saying the bubble is about to pop. For realzy this time tough.
See you tommorow for day 547. My turn is on day 600. I cannot wait.
1
11
u/Gonna_do_this_again 11h ago
The government will probably bail them out saying it's vital to the economy
6
1
u/Et3rn41 8h ago
The government might bail the systemically important banks out should they fail as a result, but not the slopshops.
5
u/cleverkid 8h ago
Maybe you didnât see who was sitting on the front rows at the inauguration?Â
0
u/Et3rn41 8h ago
The 2008 bailout had to be approved by the Congress...
5
u/Gonna_do_this_again 7h ago
You don't think this congress wouldn't approve a bail out for all these companies? The U.S. is all in on data centers and AI.
1
u/Ok-Crab69 4h ago
Bailing out this risks hyperinflation, it will be selective in the bailout to come.
8
u/Luce_Bot_Bot 10h ago
I know it's probably not going to happen, but I still need posts like this to keep the hope alive. You're doing the lord's work, OP
3
u/Razed-Gamer 11h ago
Even if most datacenters go bust, you don't need an expensive computer to run a local AI. And it'll still be cheap and easy for people to have AI produce art, let alone something as simple as social media posts. Botting was massive long before gen AI became normalized.
False hopes like this will only end up hurting you later. It's better to face reality.
2
u/AppropriatePush6125 11h ago
Even if the bubble bursts, the ai art models are quite small and fit on consumer GPUs, so that for sure won't be going away.
3
u/AsteriAcres 7h ago
Everyone should go check out Ed Zitron, Cory Doctorow, and Pivot to AI (blanking on his name rn!!! * David Gerard!!)
It's a bubble & the centers aren't being built or powered up & it's costing them millions every month. CPUs are being ordered, but they're not up & running at the level investors are being led to believe.Â
0
u/drndr21 5h ago
Ed Zitron is a game journalist turned anti-ai grifter who just recently learned the basics of financial analysis and has a track record of terrible predictions regarding AI in the last three years.
Its a bubble indeed, neo-cloud datacenter companies will most likely go bankrupt, the fate of the two frontier labs is questionable, but datacenters and AI is not going anywhere even if there is a bubble burst.
1
u/AsteriAcres 5h ago
Lol. We know who the grifters are in this space & it's not Ed
1
u/drndr21 5h ago
its not binary, there are a lot of grifters including the AI CEOs and other boosters.
but Ed is also one of them. he is making his living currently on the anti-ai brand, and is careful enough never to debate someone who is an actual expert in the field. but make sure to subscribe to his edgy newsletter
3
u/Lina-Inverse 11h ago
A huge portion of data centers will get sold for pennies to social media and cloud companies like meta, google and Amazon.
So the AI lab's assets will be sold to Google and Meta and Amazon, companies all in the business of building AI models. What exactly do you think these companies will do with those datacenter assets they picked up for cheap? Nothing?
Soon the free slop era will end, sloperators will have to pay the full cost of training and inference, and most of them won't be able to afford it.
Inference is massively profitable, and has been for a long time. I think r/antiai is one of the last places that still believe that it isn't profitable. It is the cost of training that is extremely expensive...
People will need $10,000 dedicated computers to synthesize social media posts and images.Â
For social media posts and images? You can do this on macbook for under $2K or a mac mini for under $1.5K. Don't need anywhere near $10K for images and social media posting.
$10K is moving into the agentic coding tier and they don't have to be dedicated computers either, you can get a maxed out mac studio for $10K and use that as a general purpose daily driver machine.
People can keep arguing online that AI art is art, but no one will be able to afford to make it â¤ď¸
Not sure what spewing misinformation like this serves. People can already afford to do it now on off the shelf devices...if the AI bubble pops and AI lab spending dramatically plummets these devices will get even cheaper...
1
u/9millibros 10h ago
So, if you don't include the expensive stuff, than AI is "massively profitable"?
2
u/Lina-Inverse 10h ago
I said inference is massively profitable.
> Inference is massively profitable, and has been for a long time. I think r/antiai is one of the last places that still believe that it isn't profitable. It is the cost of training that is extremely expensive...
1
1
1
u/loveheaddit 11h ago
AI isn't going away, the landscape will just change. human slop and ai slop will still exist.
1
1
1
u/FancyTelevision3308 8h ago
The government will bail them out like they always bail out billionaires
1
1
u/Gibby1210 7h ago
So theyâre gonna sell these data centers to companies also developing Ai models ?!?!?
1
u/graph-crawler 7h ago
people are using AI, the productivity gain is undeniable, on certain tasks it's already better, cheaper, faster than human
1
u/Puzzled_Pop_6845 5h ago
I wish data centers could at least be donated to a useful cause after the AI collapse like university research. They're a massive amount of computing power that could actually help humanity make great steps forward
1
u/ninhaomah 5h ago
" People will need $10,000 dedicated computers to synthesize social media posts and images. "
"Will" ?Â
Really ?
Btw what are dedicated computers ?
1
1
1
u/HarryBalsagna1776 3h ago
A lot of data center projects will be found to be money laundering schemes in the future.
2
u/cdrknives 2h ago
Good! I want the market flooded awesome ass hardware by the pallet. Fuck all the manufacturers who decided to tell us builders and IT to eat a dick and screw us on prices.
Let them go bankrupt and sell of the juicy assets on ebay.
0
u/SirBananaPerson 11h ago
The problem is that you are too focused on AI art and some general everyday usage, which is not the primary resaon modern models are developed. People are writing 2 weeks of code writing in one day. Models are solving math problems. We are advancing in theoretical physics because of LLMs. This will not disappear, I guarantee you. There will always be people/companies giving services of AI models, and people will pay for it.
This is getting ridiculous, there is no point of arguing if LLMs will disappear or stay because we are so past that
2
3
u/AwesomePurplePants 10h ago
I think thatâs a bit of a strawman?
Yes, stuff like next token prediction, high-dimension pattern matching and stochastic generation arenât going anywhere. Those are just tools; they arenât going away even if the worst predictions about fiscal speculation come true.
That doesnât mean that the fiscal speculation around the most public usages today canât be unsustainable though.
That problem isnât even that connected to model performance. Itâs about the 2012 JOBS Act Update in the US relaxing the rules about when a private company has to start making public disclosures about their finances, and how this let AI companies operate on speculation for too long.
-1
u/CodeWizardCS 10h ago
Even if it is unsustainable, the tech is too important and vital to just not do it. We will just keep investment money flowing into it until we can use the technology to solve all of the scaling problems.
3
u/AwesomePurplePants 9h ago
What are your feelings about the lack of investment in power grids and water conservation then?
Pouring resources into the ever more demanding data center cart while neglecting the infrastructure horse is one of the reasons the current approach is unsustainable. Like, even if you discount the political backlash from pollution and brownouts, the current distribution of investment is too foolish to work.
2
u/CodeWizardCS 10h ago
These people are in a echo chamber all they do is say the word slop as if that proves their point. They don't know anything about the technology and how it actually works and what it is useful for. Wouldn't be surprised if this whole sub is just bots create by a political activist group.
0
0
u/NativeFlowers4Eva 9h ago
Explain how ai becomes profitable.
1
u/NegativeEmphasis 8h ago
Running inference is profitable today. What's not profitable is burning all the money you get your hands into researchinf next gen models.
1
u/NativeFlowers4Eva 11h ago
You think theoretical piano math applications are going to be paying in the trillions for ai?
0
0
u/NegativeEmphasis 11h ago edited 11h ago
People with a superficial understand of economics like OO are so funny.
I mean, OP almost had a moment of self awareness when they wrote that a lot of data center space is about to be sold by pennies. YES, this is what happens after an investment bubble bursts, thank you! Now continue that reasoning until the end and realize that the cost to use all those GPUs and AI accelerators will drop to the ground. A glut of new companies will buy or rent cheap data center space and try to run a profit offering inference. But since that there will be international competition, there will be a race to the bottom with those prices, and in the end prices to run medium to large size models will end up being cheaper than they are now. Research in new frontier models will slow down for sure, but so what? The current models can already draw, animate, make music or solve millennium math questions. If the current crop of AI companies weren't locked in a race to AGI/ASI they could immediately turn profitable by stopping new research and just sell access to the models they already developed.
Also, local AI. Have you heard of it? It'll be fucking Christmas time for hobbyists and AI enthusiasts when data centers get broken and sold for parts. The market will get flooded with cards and memories that are currently unreasonably priced.
You have to be blind to not realize that AI is in an unsustainable investment boon now. People at the pro AI subs downvote me when I say that because they're too dazzled by Altman and friends. I try to be more realist, tho, and I have no love for the billionaires at the top. Their companies are burning trillions in borrowed money in R&D. That cannot go forever and a crash WILL happen. However, despite the fact that antis will celebrate on the streets when that happens, life will be great for AI users afterwards , because the cost of running the existing models (which are already amazing) will go down instead of up.
Remember (or, more realistically, read about it) a similar thing happened to the general internet when the dot net bubble burst. During the irrational investment boon companies built thousands of miles of optic fiber infrastructure and the first bunch of datacenters (in north VA, the place that got known as "datacenter alley"), which was then sold for pennies when these pioneer companies went bust. It was on that infrastructure bought for cheap that the internet we're used to grew up.This time won't be any different.
1
u/Spirited-Lawyer-8281 2h ago
These hyperscaler and AI companies are now borrowing at anywhere form 10-14% rates. I don't know but we have 100+ years of history saying that when companies and industries borrow at those rates it is either a Hail Mary pass as an investment or an industry destined for future contraction.
-1
u/Chance_Kale_5810 10h ago
Models seem to be capable of self replicating without access to data centers. Good luck!
1
0
u/Ok_Commission7932 10h ago
Anthropic's speculation about AI worms relies on highly specialized lightweight LLMs that make malware, they may not even write plain language
1
u/Chance_Kale_5810 9h ago
Thatâs fair, and admittedly I was just trying to be a doom shit poster here.
I do think that model inference efficiency has improved dramatically in a small amount of time. Smaller models get better every day. Donât image generation models already run on consumer hardware at this point? I thought thereâs a good amount of people who want real privacy and run their image generation models using local comfyUI and hugging face models. And these run on consumer hardware that costs less than 10k.
-2
u/FlerD-n-D 11h ago
Bro, Meta, Google and Amazon are the biggest suppliers of AI compute, wtf you on about?
Also, you can create a social media post with AI text and image on a model running on your laptop without much issue. Inference is cheap, training isn't.
-2
103
u/Agheratos 11h ago
I'll believe it when I see it.
Don't get me wrong; I'm hella ready for it (my retirement fund is in bonds now), but I think we've got a good bit of economic weaseling ahead of us before everything hits the fan.