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Comment by bunderbunder | Hacker News Reader

Oracle's recent force majeure invocation shines a spotlight on what seems to be an endemic problem: datacenter builders have been signing commitments to bring a certain amount of capacity online by a certain date, without first conducting sufficient due diligence about whether they would be able to secure all the resources needed to meet those commitments.

This means they are now caught in a mad scramble to source all sorts of stuff, including RAM, potentially as a matter of life and death.

What's less clear to me, though, is whether datacenter builders will be able to make good on these purchase agreements. It seems these projects have every opportunity to fail, and the path to success keeps getting narrower. What are the odds that chip manufacturers ultimately get caught holding a bag of chips that nobody can buy in one hand, and a bag of IOUs from bankrupt customers in the other?

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Yeah there was just a story about how there are hundreds of billions of dollars in "non-cancellable" debt obligations to build AI data centers. But they're building far beyond current demand, I feel like the collapse is inevitable.

sure, collapse is inevitable, alright

how does one prepare for the moment it actually happens? what would it look like?

what were the immediate consequences of dotcom for the normal folk?

I'm sensing sarcasm but is it not true that the scale of obligations is unsustainable?

As for preparation, I'm not sure. I have a 401k that I'm worried about. I'm too young to really remember the dotcom bubble, let alone have any stake in the stock market at the time.

It's half sarcasm, half my frustration in the way ai crash proponents behave in general

if you proclaim that there's an inevitable doom - propose preparations *people you're talking to* can take

when I hear about nuclear doom, I see preppers discussing bunkers and how rich people buy land in Argentina to evacuate to

when I hear about stock market crash, I see people discussing some famous super-investor moving his money into coca-cola, because food would always have a demand

even bloody "the end is nigh" apocalypse junkies continue with "go to church" (or smth similar) in the very next sentence

what can YOU suggest ME as the next action? not for the government to do something, not for the whole market - how do you suggest ME to prepare? what do you suggest *I* will experience?

at best, our approximation of ai bust is the dotcom - and that happened beyond current generation's memory. At best surviving context is "and the ruin left a lot of cheap fiber laid out all around the world", so... we'll get a lot of cheap ai then? good

Not every inevitability can be mitigated. We're each and every one going to die. The sun will die. The universe will wind down. Embrace it, don't pretend you can avoid it.

> at best, our approximation of ai bust is the dotcom - and that happened beyond current generation's memory.

I'm so old now they think I'm dead. Honestly, it might be kind of a relief.

you're not dead - you just stopped being current

just part of the riverbank :)

Except we don't get cheap AI this go round. It's just a bunch of e-waste that can't even be repurposed into server in the closet back at the office because each server needs about 100kW of power.

Nobody Knows. The market can remain irrational longer than you can remain solvent.

Having cash in reserve to deploy in the aftermath of a crash is golden. If that happens you look great, if that doesn't happen for the next 5 years, you miss out on the interim gains.

Keep investing, diversify, have some reserves. Try to be less anxious about things. Exercise, sleep, be grateful for things you have.

Save money now.

When the bubble bursts it will depress valuations across the board, including the valuations of the good companies that will survive to eventually own significant market share. Buy those at those depressed prices and wait a decade.

The trick will be learning to tell the difference between the Google's and the pet.com's of the AI era. The trick during the dotcom situation was to look for companies that had actual gross profit and were reinvesting it, rather than companies that only had theoretical profit based on nonsense like market share and eyeballs.

Take Amazon as an example. They were $107 a share in 1999. By late 2001, it had fallen to under $6. Now they are $250. It still took almost 10 years to recover.

Worst part is that some of the companies that survived the dot com era are the new "...but on the internet" companies except now it's "...but with chat bot"

Is there anyone in the AI sector that is making profit and re-investing it? I guess that really only applies to Microsoft, Apple, Google, etc. that other lines of business to prop up their AI divisions, vs. companies like OpenAI and Anthrophic. I wonder where NVIDIA will land...

Google is making money on it. However, that's coming at the expense of the very free web they built it from. So they have a different problem that may be unsolvable.

There are signs that we are, and are not, in an AI bubble.

Compared to the dotcom boom, firms are well positioned in terms of capital - they have revenue and profits.

However, there's still the absurd speculative valuations, risk, and high expenditure (on said data centres). Also, Andrew Bailey from the Bank of England, personal opinion - https://www.bbc.co.uk/news/articles/cv8e30enrkxyo

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