That's literally the definition of a bubble-pop. The assets get sold for pennies on the dollar (sometimes even fractions of a penny on the dollar).
> And what about local AI and agentic stuff? We can all stick with 32Gb of ram at home and piddly lil GPUs?
Won't matter if there's demand for that, that specific market can't use the stuff already purchased by VC money. TBH, I won't even care about self-hosting if the bubble pops, because all those things the VC money purchased will get bought up for basically scrap prices, then hosted for cost of hosting + tiny markup.
There's no principle to repay, so prices are going to be opex + markup, not opex + training costs + repayment on loan + commitment penalties + markup.
> Extreme fear = always a buying opportunity.
Which brings me back to your assertion: that all these things already purchased by VC money will still be needed. We found that to be untrue during the dotcom crash: Hardware makers (those that survived) stock took 17 years to get back to where they were pre-crash, the 0.01% software stock that survived the crash took a decade to recover.
The only way this is a buying opportunity is if there is no crash.
[–] gizajob 1 day ago
[–] lelanthran 1 day ago
You're describing exactly what happened during the dot-com crash and calling it different. Sun, Cisco, etc literally could not keep up with demand pre-crash, and yet they still tanked (Sun tanked enough to go under, Cisco took another 17 years to recover).
I mean, you're calling it a main difference, but describing exactly the same thing.
[–] gizajob 1 day ago
I don’t need a rack of Cisco routers on my desk. I’d happily take a Sun workstation loaded with GPUs though.
The only real question that will come out of this is whether we buy the hardware directly or rent the hardware from Anthropic/OpenAI etc. no doubt we’re seeing the winners and losers get sorted out right now, and the strategy of doing the growth behind the scenes and then doing IPO (instead of IPO on no revenue as in the dotcom era) is proving to be yet another stumbling block. Valuations can come down as much as they need to but the AI genie has been freed now, regardless of how the market is choosing to price it.
Nasdaq will be higher in 12 months than it is today. Democrats or no democrats, no politician is going to vote to crush the primary driver of revenue growth in the S&P. Pooh Pooh it all you like.
These assets aren’t going to get sold for pennies on the dollar. Too many people would be interested in them and they’ll get bid back up to 90 cents on the dollar.
We’re currently in a situation similar to the dot com crash but one that has enough differences for one to not apply the logic of that crash to it. The main difference being hardware companies are making huge amounts of money and cannot keep up with production due to excess of demand compared to supply. Their only approach in your crash scenario would that they would drop prices, but that will lead to yet more demand and prices rising.
I’d happily heat my house on a rack full of GPUs and memory and use all the AI capacity that came with it. But there’s no way hardware prices are going to also crash to allow me to do that.