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Comment by khurs | Hacker News Reader

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khurs·

Good news. The more providers, the more competition and lower prices.

Meta are laying their own sub-sea cables globally at present:

https://www.bbc.co.uk/news/articles/ckgrgz8271go

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In the grim darkness of the AI boom everyone is watching high profitability industries move into areas characterized by having few providers due to incredibly poor margins and high expenses and declare it business genius.

AWS have 35% profit margins.

Google Cloud recently told Meta they couldn't supply all the ai compute they want so Meta has no choice but to secure their supply?

https://memeburn.com/google-limits-metas-gemini-ai-access-as...

Yes… and AWS is critical to the cash flow and valuation of its parent Amazon. The market looking like it’s trending towards oversupply does not paint a good picture in that context. AWS has to operate at these margins as most of the rest of Amazon is a very low margin business.

Google, Microsoft and others have separate cash cows. For Amazon, AWS is the cash cow. They can’t afford a blip here.

And much like the 41st millenium, there are no good guys, just the eternal laughter of hungry shareholders.

Are we watching the next sacrificial infra build-out happen (Global Crossing/Iridium), where eventually a bankruptcy will lead to affordability? Is this an artificial semiconductor demand peak with rapid expansion due to business FOMO? Will semi manufacturing ramp up to meet this peak, leading to a glut? Will this be like the pandemic supply chain whiplash impact on outdoor gear (Kona Bicycles at one point was offering a BOGO deal)?

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