2. Building factories requires capital to be invested now.
3. The return-on-capital will only be obtained in the next n years.
4. But if demand goes down, we'll have much more supply than demand, leading to a cutthroat price competition, which could prevent the factory costs from ever being recouped.
5. There are only limited number of suppliers and they’re making a killing from all of this.
Didn’t these companies collude before? I’m sorry but I don’t believe that they’re also using this opportunity to make as much money as possible as well.
And to add to that 4th point, there is a very real chance that many the “AI” companies that are buying all this hardware could go bankrupt at anytime and in rapid succession, leaving drive/memory manufactures with a bunch of unpaid orders and a second hand market now saturated with liquidated equipment.
Much like the GPU/crypto boom/bust some years ago, but on an even larger scale.
> 4. But if demand goes down, we'll have much more supply than demand, leading to a cutthroat price competition, which could prevent the factory costs from ever being recouped.
Why not normalize that, if things don't work out, the government steps in, buys the business, and offers a better regulated version of the business?
Capitalism is generally touted as useful for innovation; but haven't we paid collectively for the initial investment for many businesses many times over now that there's little innovation done? By definition there's no innovation once the only thing happening in a business sector is consolidation.
So, I'd conclude that capitalism isn't useful to us at that point, and actually harmfully inefficient (too costly for consumers), so we'd be wise to do away with it by that point in favor of a more efficiently run operational/economic system... That would actually be innovative! What that system looks like, I'm not sure, but I imagine it's something like a cooperative.
Production was close to maximum anyway because of existing demand and how expensive new fabs are to bring up. The boom in AI use wasn't sufficiently planned for as it wasn't expected at the scale we are seeing, so to scale up means building more fabs - a long and expensive task. The situation is not helped by one of the AI companies successfully negotiating huge deals for a year worth of production with the two biggest providers at the same time and keeping it secret enough that neither bumped up prices in the deal as a result of knowing what the play was.
Most players are rational actors and this isn't their first time in this sort of market. Getting more production online if you do not have slack like downtime takes quite a while. And there is no guarantee that they can sell the new production even at previous rates if they end up in over supply.
Generally people just don't understand how long ramping up new production facilities can take and what is the realistic pay off period for them.
Building these factories goes way beyond "nontrivial". We may see a few come online in a couple of years though, but time will tell if the extra capacity alleviates the crunch.
Adding to what others have said, several hdd, ssd and ram manufactures have said that they don't believe demand will be sustained in time for long enough to warrant extra investments in increasing production.
Because the manufacturers of storage (and RAM) consider it to be an AI bubble, too. The surge in demand is a short burst, not a sustained one. Hence it makes no sense to throw a whole lot of ressources into scaling up production, when the demand won't be there anymore in 1-2 years when the factories will be ready.
Because TI has a ton of microcontrollers, power management ICs, opamps and so on that doesn't need or is even desirable to produce on smaller processes.
Yes, but that isn't where the increase in demand is. Those things are affected by fabs that could be producing them producing something else, but there will be some stock floating in the system so some resistance to increased prices needed to justify new fab resource, and if things correct a bit in the coming year the maths for a new build might look more dubious. Those with the money to fund a new fab right now are more likely to fund something capable of producing the newer part types. I could be wrong, but the fact that significant new fabs like that are not in progress right now would suggest not.
Shouldn't countries wanting sovereign infrastructure create subsidies for creation of factories/job creation and also selling first/primarily within the region if it might cost on just a few million dollars (preferably a new competitor)
I think one flaw in my thinking could be that there might be a lack of experience within the people for something like this, do you consider it to be a factor and would it be difficult to hire people relevant to such fab?
Because it operates exactly as a drug dealer. It gives you first shot for free (reasonable opportunity to move up) and after you are hooked it makes sure that it extracts all your money (subscription and inability to own anything).
I've been working on webtool because I got tired of battling captchas in Playwright and cloud browsers.
For most tasks, it's a lot better to just let the agent work in a real, live Chrome browser that is not detected as a bot at all.
Plus it's fun to watch the agent click around and figure out how to do things.
Indeed, in the current age we need to build things for agents first. We think that the skills will primarily will be discovered through marketplaces or via web search
I think even for those who do not subscribe to any election fraud conspiracies, this will seriously shake confidence in the election. If a mistake like this went by unnoticed until the results were posted, what other monkeying about with the database goes on?
The main value of token compensation is liquidity. People frequently underestimate how long it will take until exit and their equity becoming cash.
Tokens for a good project are liquid immediately on numerous exchanges, and likely will be worth at least something. Don't neglect the time value of money.
There's no such thing as a free lunch, though. In the case of token compensation, it's only liquid if you can easily find another buyer, and the main thing that would be driving the ease of finding a buyer for tokens right now is that there are so many people who are eager to buy literally anything that smells like crypto. So, yeah, it may be easier to dump in the short term, but in return you end up with an additional way for the cash value of your compensation to be driven to zero. Actually, make that three, because thinking about how future SEC activity could impact this sort of thing is the stuff that headaches are made of.
That might not be a consideration at all if the company's chances of long term success isn't a part of your thesis for taking a job there. But why would you take a job at a company that you don't expect to be successful?
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