PC Gaming

when ai dies like the dot com bubble did

All of this talk about AI bubbles and PC hardware and when the prices are going to come back down...wishful thinking. Unless there is a miracle breakthrough in compute, chips making and how AI can be accelerated by using less, the prices won't be coming down anytime soon.

Did you know the Amazon didn't make money for years? it survived through all of it (very likely through wall st and tech bro style funding) and now it's a behemoth.

But let's talk about macro scale even without looking at the supply chain of the entire chips industry. From a geopolitical standpoint, AI has become this "holy grail" to increase the speed of research. Not productivity. Research has ALWAYS been a bottleneck. Now how does that tie into geopolitics? There's an AI race going on across the world if you haven't been paying attention. Governments aren't going to just roll over and let someone else beat them to it. So like the military industrial complex that gets money like its free in the US - yeah, I wouldn't hold my breath.

What will really tank things would be if the US dollar goes through a crisis - the trajectory is possible but it wont be an over night thing. Central banks around the world are watching and coordinating to keep things stable - for now. So what can you do? It's simple - withhold your unnecessary consumer spending and cause a crunch in liquidity. Unfortunately this will only work collectively. So good luck!

As they say, "The market can stay irrational longer than you can stay solvent", especially if AI Bro financial circlejerk BS is the only thing staving off a recession / depression in the US, and the fraudster in chief is getting his cut.

If they hold on long enough, they'll have gone a long way towards making the population rent compute (after AI is found wanting, they're gonna want to do something with all that compute) and you know how much the technofuedalists love rent.

I think it's less artificial scarcity and more actual scarcity. They haven't reduced production to strangulate supply, they're redirecting a portion of supply because of the dramatically increased demand as AI companies rush to build more stupid datacenters in the hope of being positioned to capture a greater share of the profits, once someone figures out how any of this LLM stupidity can actually be profitable at all.

The question then is, will it? If it turns out they're right and there's some unforeseeable breakthrough that causes the company with the greatest compute power to make the most money, then the hardware situation will not pop. Production may increase but until some ceiling is hit on the compute power to profit graph, you can expect consumer computer prices to continue to be absurd.

I don't think that's going to happen, though. These LLM companies are losing money hand over fist, kept afloat only by more and more investor input. The more they expand and the more they develop their products, the more expensive it becomes to run, with no real increase in actual revenue. Sooner or later, someone's going to call the bill due. Promises of future earnings won't be enough, someone will pull their support. Once that starts, the whole thing is going to burn FAST. There is a huge amount of money tied up in this mess and none of the big players are going to want to be left holding the bag at the end. You can expect planned datacenters to be cancelled, which will drop hardware prices significantly as planned production suddenly needs a buyer, and you can probably expect some existing datacenters to shut down, flooding the market with second hand components.

The important thing is, the hardware market won't move separately from the LLM Companies and their valuation. There isn't going to be some huge spike in production that is made specifically available for the consumer market. Even if there could be a spike in production at all, the consumer market isn't what's most profitable right now. The current hardware situation is going to be the new normal until datacenter construction stops, and probably stay this way until and unless those facilities shut down. If the AI bubble doesn't burst, and again I think it absolutely will, you should get used to consumer PC hardware bordering on the unattainably expensive.

This one isn't artificial scarcity, I'm afraid

There is literally less available for the consumer because all the various chip fabs have had their capacity bought for AI data centre expansion.

This is not the same as a scalper situation where the supply has been taken but ultimately needs to be sold back to consumers. You, a single consumer, are competing with the buying power of the likes of Google, Amazon & Microsoft.

Plus they have booked up this capacity pretty far in advance, so even if they stopped buying up more today (they will not until the AI bubble pops), consumer prices aren't going to change until all of that capacity reservation has passed. Then after that, all the companies that wanted to buy capacity, but couldn't compete with the big ones will get their turn. Then eventually the fabs might find themselves with a bit of surplus capacity to increase the production of consumer hardware. Then there will be the pent-up consumer demand keeping prices elevated for a good number of months or years (depending how long this all goes on for). After all that, supply and demand could see prices dropping back down a bit.

These fabs will start to physically expand on order to increase capacity if it goes on long enough, but these kind of expansions take many years to build and bring online.

Other things to remember, the current US administration is motivated to prop up this bubble as long as they can because it's basically the only industry in the US that's not shitting the bed currently, so when it pops a lot of US GDP is going with it and probably going to cause a pretty bad recession. Another is inflation; by the time this is all over prices might have inflated enough due to the devaluation of money that any drop in prices would be offset.

Basically, I wouldn't hold your breath

My fear is that when the AI bubble pops it will take many PC hardware manufacturers with it. Can Nvidia survive if OpenAI goes under? It will leave a massive hole in their finances.

A bubble popping might just make matters even worse.

My guy tells me it will be like housing. It'll never drop. You wount be able to afford to buy, so better rent, to Ben you won't be able to afford rent either.

It's not really artificial scarcity, there is actually less consumer hardware available at the moment.

As long as FOMO gets enough whales to buy the top of the line, nothing will change. Why cater to the majority, when the minority is willing to spend that much more money?

When folks start taking fascists accountable.

Stock prices are already plummeting for AI, and that's a bigger sign of what's to come. An already popped US Dollar and bond bubble, of which we're starting to get the effects of now.

When the billionaires fully saturate all their AI server farms and we reach some sorta equilibrium I guess.

Some companies may not return to caring about gaming or personal electronics however.

That"s my guess, I don't really know. Meantime I'll buy used during the bubble.