Comment by hajile | Hacker News Reader

Comment by hajile | Hacker News Reader

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On a $100B AI datacenter, some 60-70% of the center needs to be replaced every 2-6 years. These companies claim the hardware lasts 6 years while simultaneously claiming they are relying on new hardware to lower inference costs (implying much more frequent updates).

Over 40 years, that's 7-20 hardware changes, that turns into between $420B and $1.4T of ongoing investment (not accounting for inflation). The $30B that is called "infrastructure" only accounts for 2-7% of the overall bill.

This is NOTHING like fiber buildouts because the fiber lasts the whole 40 years with ZERO replacements and very close to 100% of the cost is infrastructure rather than a tiny percentage.

I've been through several network upgrades. You are saying the fiber in the ground lasts a long time, but all the equipment on either end gets replaced every ~5 years. I agree this build out seems pretty crazy, but people were saying the same thing with the internet. Arguing if the equipment has a replacement rate of 2-6 years or 30-40 years, I think isn't the part that makes this a bubble.

For fiber, the main costs were not the fiber itself, but acquiring the rights to lay the fiber and the labor to do so. The equipment at either end has a lifespan of somewhat less that 50 years, but that's a minor cost.

Conversely, for the data centers we're talking about, the cost of the things that need replacing every five years is one of the primary costs.

I was responding to you mentioning fiber. But of course, the "internet" does run on servers, which also have a replacement rate. There were data centers before AI, and they had a lifespan well below 30 years.

I'm not arguing that the current build out isn't crazy, just that AI isn't going away. Just like everyone thought the internet was a fad, but then it continued to grow (remember web 2.0). AI will morph into something useful and will be sticking around, even if we can't envision what it will look like.

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