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> This is the real risk after the slow death of personal computing.

By the time you can have a slow death of personal computing, capacity will improve and prices will improve.

In the shorter term sitting on an old computer or regressing a couple years on specs or paying an extra $100/$200 for 8GB/16GB works.

> Even internet resources like servers will be hoarded by the hyperscalers that are the only ones who can afford to order years of compute hardware in advance.

I don't see why hyperscalers would be so much better at handling price increases.

For some average business paying a week's wages for the computer you use, they can afford that doubling to two weeks just fine.

For all the normal server rental companies, okay the guy on the $10 plan either pays $16 now or cuts their resource allocation and keeps paying $10. That's not going to cause a sea change. And higher end hosting isn't that much different.

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Hyperscalers buy so many CPUs and so much RAM they can dictate prices (to a point) or at least make an agreement to buy at a much lower price but buy X amount for the next 5 years.
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When the market's so hot I don't see why anyone would give them a particularly big discount. And they would have been getting a discount before, so they probably end up seeing a larger percentage spike in what they have to pay.

Maybe if they're locking in long enough to fund new fab construction? But in that case after a few years a ton of capacity will come online so they're actually helping solve the problem.

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I work on a desktop, but as a backup I have bought a refurbished Dell Latitude, there are a lot of decent ones for €250 on eBay. Put Linux on it, it’s good enough for most workloads.

I just hope my top shelf 2020-era desktop doesn’t die on me because it would get very expensive to get a new build these days.

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> I just hope my top shelf 2020-era desktop doesn’t die on me because it would get very expensive to get a new build these days.

I could probably sell my gaming rig (12900K, 64GB of DDR5, 4TB NVME, RTX 3090) for more today than what I built it for about 4 years ago, it's absurd. I won't, of course, because it's still glorious for 4K gaming even today. In retrospect, $5000 very well spent.

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I have a similar rig, but a 10th gen i7, 128GB of DDR4, 2TB NVMe, and dual RTX 3090s. Built it in 2021 for crypto mining, it ended up paying itself off just before Eth went PoW. I kept it mining even after profitability, because it ran warm enough to heat my apartment leaving my HVAC on fan-only to circulate the heat around.

After winter, I started playing with various other GPU loads until LLMs and SD became easy enough to use. Now it's my experimentation machine.

It's already paid for itself, so anything I sell it for would be profit, but it is still super nice for running local LLMs that power various projects "for free".

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You might sell it for more but buying a replacement costs even more so you’re losing money either way. The only way is to sell and never look back.
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I did exactly this and suggest it. Used Dell Latitude (the one I got is one from 2019 - model 5300). I put Linux Mint Debian Edition (https://linuxmint.com/download_lmde.php) on it. Works absolutely great.

Small Dell Optiplexes are good for desktop computers.

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I got an old hp elitedesk off of eBay, I don’t remember the cpu but it has 8 gig of ram and an ssd. Ubuntu+dokku and it runs all my self hosted stuff.
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If the hyperscalers demand is persistent, more hardware players will notice and will want a piece of the pie. You already see non traditional players entering.

But what you see is a cautious strategy from the existing players. They are hedging against a bubble. They don’t want to pour today tens of billions of dollars in capacity that they will have to sell it to a deflated market

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How do these prices compare to buying a PC in the early 90s?
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This is a market shock. The reason it doesn't alleviate sooner is the chip manufacturers are very wary of investing billions on capacity that won't come online until after the shock is over and subsequently going bankrupt. Because that's happened before.

IF IT LASTS, capacity will increase.

But it won't last. The AI boom is in exponential growth but it's based on heavy speculation about future value and the bubble will absolutely pop, how agressively depends on how dumb people are about now. The current growth may or may not be entirely justified but it's not sustainable, the free investor money does run out. These back and forth self-dealing deals where companies that own big pieces of each other announce "partnerships" where companies are selling resources essentially to themselves and counting the revenue several times... those are a sign of the approaching peak.

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> the free investor money does run out

I've been saying the same thing, but that's why they made the move to IPO, no?

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The money always runs out. The dot com bust (Nina Brink forever!) and more recently "let's give a homeless man a 250k mortgage" 2008 bust.
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And then?

There are only so many trillion dollar IPOs out there. And then what next?

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Then it's not their problem and the company can fail.
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If you owe 1M USD, you have a problem. If you owe 100B USD, they have a problem.
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More government money to fund the ever elusive doomsday AI.
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And I was told my whole life that capitalism solved everything through supply and demand magic.

I wish I could say I am disappointed.

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What they conveniently leave out is that it sometimes takes over a decade for a correction
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The market can stay irrational longer than you can stay solvent
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The beauty of supply and demand magic is that the market is now open for anyone that can provide server hosting cheaply.
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I can't wait for a scrappy startup to spend a couple billion dollars and several years setting up a new fab for chips so we can see the prices go down!
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Good luck getting the hardware for that eh?
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That's the rub. There is no such thing as "anyone that can supply hardware cheaply"

Either it's an established vendor with designs and fabs or it's a newcomer that needs to invest a massive pile of cash in designs and fabs. Neither are cheap.

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I volunteer my laptop, I suggest you and others do the same. We can hook them up in a VPN with E2ee. We just need 1 public IP. Lets Go!
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It is supply and demand but chip supply isn't very elastic and the producers are conservative about adding capacity that won't be needed by the time it's online.
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SK Hynix just said they want to double wafer production by 2031.
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By 2031 the best employer in Europe will be the water gangs.
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I mean, I want to double the the number of billions of dollars I have by 2031, doesn't mean I will. (actually I have 0 billion and double 0 billion is still 0 billion, so unlike them I'll accomplish that goal).
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They already ordered Hanmi equipment and started construction at Yongin Mega Fab. Sounds pretty serious to me.
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Doesn’t this presume that chip fabs are betting that the AI boom is a bubble that’s going to pop?

Seems kinda hard to believe at this point, no?

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No. It doesn't have to be a bubble at all. It just has to be a cycle of rapid capital equipment build-out that returns to more normal levels in a few years.
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Hard to believe that an industry making money hand over fist are reluctant to spend tens of billions expanding capacity that won't come online for years?

There have been SEVERAL crashes that have wiped out the market and it's the reason there are so few players, the rest of them went bankrupt after periods of over-expansion. (in the 80s caused by Japan, in 1997, in 2001ish after the dotcom bust)

You're even calling it a bubble so it's not exactly "hard to believe" it will pop.

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Idealistically, actual consumer driven capitalism would be much closer to supply/ & demand than this (imo) almost completely artificial, government sponsored bubble. I think pricing before this current bubble reflects that.
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Because, oddly enough, there are a lot more things going on. Government incentives, companies trying to stranglehold markets, FOMO-fueled massive investiment into the current fad, etc. Just to name a few.
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I was also told this. Why isn't it happening? Can some capitalists explain why capitalism isn't happening the way it's supposed to? Is it because of government regulations, do we need to deregulate?
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“Is it because of government regulations, do we need to deregulate?”

Insufficient law enforcement. The same memory manufacturers already broke antimonopoly laws in the past, pleaded guilty. Apparently the fines were too small for these companies to care, and the people responsible were promoted instead of being punished. More information: https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal

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Capitalism isn't a magical instant fix.

In this context, it takes spending enormous piles of money over the course of at least several years to spin up new semiconductor production.

We do need more capacity to keep up with AI datacenters' usage, yes.

But adding long-term capacity years down the road for a thing that some folks seem to confidently think is a bubble that can pop at any time is risky. And (because capitalism), we have to manage carefully balance our risks and rewards in order to maximize our odds of success.

If there is no bubble and demand stays high long-term, then the payoff for that risk is potentially enormous.

If there is a bubble and it bursts, then the cost of that risk is potentially devastating.

(Capitalism works most-predictably when cheating is possible, such as with Biff's use of the time machine in Back to the Future II. But without cheats, it's always a gamble.)

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Only children believe in magic. You should done work and come to an understanding, then you wouldn't believe naive things.
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Sadly this is not a joke nor some doomsday thinking. Google recently repurposed thousands of phones for server needs. Why? Well guess why… to teach everyone tis coming.
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To clarify: UC San Diego is planning to build a cluster of 2000 Pixel phones for computer science class use and Google, in support, helped with a test with 20 phones.
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Goodness. Thank you for the clarification as this is leagues different than what I originally thought I was reading from the other comment.
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Or they did it for positive PR.

To show they’re working on reducing the impact of data centres on the environment, and that they’re taking action on e-waste, all while saying their pixel phones are so powerful they can be clustered into servers.

And their announced test with 2000 phones, where one server is 25-50 phones, is only 40-80 servers. Interesting, but hardly hyper scale.

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