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.
[–] lelanthran 1 day ago
[–] 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.
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.