Basically the same situation as with defense contractors I bet. All sorts of subcontractors take the money, turn around and either pay other subcontractors, or do as little as possible with it to be able to keep making more.
That’s how you turn 300 billion of investment into 30 billion of revenue! Capitalism works SO WELL!
Lol they managed to take 3000 billion, or 3 trillion if you number, and turn it into 30 billion revenue through. So actually significantly worse than you say.
Did I miss a zero? Where’s your number from, I am curious?
I think maybe I’m referring to the entire industry investing in AI, and you’re just talking about Microsoft’s investment?
Yea that checks out. Microsoft alone is at about 300 billion, the whole invest by all companies actually making AI or stuff for AI is estimated between 2 and 3 trillion, depending where you want to do the cutoff.
There is some of that. A lot of these companies actually are trying to move fast and do most of the buildout efficiently. But there is always a bottleneck like getting grid power or some piece of hardware that is in short supply. The crazy thing is that even with a bunch of construction projects stalled at some critical point, they just keep buying & stockpiling basic AI hardware (AI chips, RAM,…) and starting new datacenter construction anyway.
In their mind, it’s fine to keep spending, so long as they are still standing at the end. But if they stop spending now, it would only send the signal that they lost confidence in the spend so far and that would instantly tank them in the eyes of everyone, thus fulfilling the prophecy of failure that they must know is looming over all of this.
So the only way any of them will stop is if one of them dies first. At that point, it may be possible to change the narrative towards it being smart to hedge your bets on this whole AI thing a bit.
maybe the ai isn’t the point. openai is dependent on microsoft azure credits (last i heard, anyway) and microsoft owns something like 40% of the company anyway. i think this might have been ed zitron’s own observation but it seems as though the ai is an easy way for microsoft to get a bunch of cheap datacenters while hedge funds and r/wallstreetbets morons foot the bill. if that’s the case, the recent IPO and associated uptick in ads might be an early indicator.
for microsoft to get a bunch of cheap datacenters while hedge funds and r/wallstreetbets morons foot the bill
These AI data centre builds are packed with specific high power GPUs that are only useful for vector multiplication for AI, or mining cryptocurrency. To reduce overhead, they have kept non-GPU components to a minimum, because this lets you have more GPU processing per gigawatt. These data centres cannot be used for anything general purpose. General purpose computing needs CPUs, which they stocked as few of as possible.
is that necessarily a dealbreaker? GPUs are way overpriced right now because these AI companies control huge chunks of the supply. when openai goes kaput microsoft is gonna have control of both chatgpt and copilot and with it, a huge chunk of the used gpu market. if i’m not missing something huge, that could put them in a great position to absorb the demand from the ai bubble’s burst and unload the extra cards at whatever pace they want. plus i have no idea what the rest of the GPU compute market looks like. i assume if there’s a lot of demand then AWS wouldn’t be able to absorb much of it, and google cloud not as much as microsoft. obviously i’ve gotten way out of my depth here so i guess this is more of a question than a statement
this is some real liz from truanon thinking, i mean that in a positive way. The mechanisms of high capital money flow are made purposefully opaque and very few people are watching them, but they determine a lot of the material conditions we have to deal with
It’s crazy to me that 2026 people still use social media threads for stuff like this. I know blogs are super uncool but I wish they’d make a come back.
Tbf he does have a substack which I’m sure will have plenty of coverage on this
He needs to hire an editor with all of his Premium Subscription money, because otherwise this will be another 40,000 word opus that I’ll never be able to get my friends’ pro-AI brothers-in-law to even pretend to read.
yeah his writing isn’t bad but he repeats himself a lot
I don’t want to criticize him too harshly, because he’s doing great work, and I like to go through his various Haters’ Manifestos before I encounter certain brothers-in-law. However, while I can sometimes get these people to read and acknowledge, say, Current Affairs articles on how AI is ruining education, his most important articles are just too long and unfocused. Part of the problem, too, is that AI boosters are naturally going to judge a book by its cover and decide that his blog isn’t glossy enough to be trustworthy.
(From what I’ve seen, being pro-AI is a brother-in-law thing, whereas full chudliness is uncle behavior, so I just need to keep my friends from turning these dudes into uncles.)
Idiot here, what is capex?
Capital Expenditure
Thanks dude.
A cap that you used to know
haha gotyem!
Only about 2 gigawatts of the company’s current 12-gigawatt capacity is centered on Al-specific chips, the people said. This is expected to grow to about a third of the 38 gigawatts Microsoft plans to have online in 2032, they said.
Microshit has reached the stage where they are so shit they are backing into effectively doing the good thing
#include <climits> static int shit = INT_MAX + 1;
WHERE ARE THE FUCKING GPUS!?
Ed keeps getting proven right again and again
why dont they just make them more efficient? are they stupid? just ask … oh … oh no
I mean, they are. That is another problem, everyone rushed to buy all the AI hardware and then didn’t realize that some parts (like getting connected to the power grid) might be a huge bottleneck in the system. Now they are sitting with warehouses full of hardware that is already outdated and less efficient, but they are not depreciating the old hardware properly, everyone is acting like a high-end chip just keeps its full value for 5+ years.
That is another problem, everyone rushed to buy all the AI hardware and then didn’t realize that some parts (like getting connected to the power grid) might be a huge bottleneck in the system
Imagine being that stupid that you don’t account for…electricity. The indomitable captains of crapital everyone.
This is why I wouldn’t even hire a finance bro to watch my dog. He’d under-feed it, over walk it, and by time I got back he’d tell me how he just managed to saved me a bunch of money.
Hey, that is not my job. My job is to buy the GPUs and the RAM and the SSDs, making use of all that is another guy’s problem.
That is why the new frontier is not backup diesel or LNG power, but fully or partially off-grid datacenters. I’ve seen that some are even buying less efficient jet turbines for power generation because there is such a huge backlog.
https://www.techspot.com/news/110732-jet-engines-diesel-generators-step-data-centers-outpace.html
Ah sales.
Sell Anything. Let Engineering Suffer.
They’re going to recreate XB-0 Hresvelger from Ace Combat as a mobile data center hidden in the mountains of Eastern Europe. It’s destroyed by the Allied Forces before it can take flight as their planned and permanent aerial data-ship connected by satellite and fueled by atmospheric FBOs (floating base operator).
another year or so and its going to catch up with some of them
The sad part is that it is all (especially the GPUs) custom hardware. Huge GPUs with insanely fast HBM memory, but they don’t even have a display output. Most of that will just be wasted, we won’t even be able to get it on the second hand market for anything useful.
I do at least expect tinkerers and hack enthusiasts to come up with cool interesting use cases that I have no time to actually pursue. My fav weird tinkering this year so far has been Asrock bc 250 (just crypto mining blades) being turned into diy PC’s wiht steam os on them
This is mikkkro$$oft we’re talking about here, making things more efficient has never been their strong suit
