this post was submitted on 20 Oct 2025
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IMO it's guaranteed to happen, because there is just no return on all those investments. Even the big contracts they keep touting only cover a tiny percentage of the giant hole they dug themselves into. Eventually someone will want their money back.
As for how bad it will be, I really can't say. I think this whole thing is somewhat separate from the wider, real economy that caters to the actual needs people have, so it might not be super bad. But with that much money vanishing in a garbage fire you are bound to see heavy knock-on effects as real and useful corporations can#t get the loans they need etc.
It's not separate at all when the financing for new data centers comes at the expense of developing any other tangible assets. Wasn't the growth of the US GDP only 0.1% this last quarter when counting only sectors not related to AI?
Yea but that effect is already here. The economy is all fake anyway, I am not gonna worry about it too much, it doesn't deserve it.
I don't think they're going to let it pop like 2008. They'll probably keep it up until there's some new shiny use for GPUs and data centers and then move onto that, letting the AI market deflate.
I suspect 90% of this is just justification for building more data centers and figuring out what to do with them later. But if some downturn leads into a bunch of data centers closing, then we're heading for a big crash.
problem is, those gpus are only good for 3 years give or take before becoming obsolete, and those are at least half, if not closer to 60% of the cost of these data center builds
That seems absurd. Those centers have already been around for more than three years. At least AI has been.
If they had to trash 60% of their infrastructure every three years no one would've ever invested in this industry.