AI Bubble Pop or Not?

[mostlylong]

@JLC

So if Meta overbuilt, how many other AI hyperscalers overbuilt?

SpaceX/xAI, you know the AI company with a $22.7 trillion TAM in AI, that doesn’t actually do much AI.

Just like Meta, they are leasing out their data center capacity to actual AI companies with actual paying customers, Anthropic and Alphabet. (nothing wrong with being a data center REIT, it’s just not AI per se)

Similar takes:

@GDavenport

if true, imply the over capacity is ALREADY here at the (BLEEDING) capability edge. When overcapacity arrives at the scaling edge (users x average consumption), the AI build out craze will be well and truly over.

@mostlylong

• Again because xAI can’t do very useful actual AI, they are leasing their data center capacity to more capable AI companies Anthropic and Google. (nothing wrong with that, it’s just not AI, it’s leasing real estate and hardware, like a data center REIT).

@GDavenport

There is excess compute for all inferior solutions. I suspect we will continue to see bare capacity (like the hyperscaler wannabe’s -NBIS and for those who have no way to leverage that infrastructure for profit - META, SPCX, etc.) sold to the winners to monetize.