Thread

1. cmiles8 · 1790864913 · focus · HN ↗

   If you follow the money though much of this future “demand” is on fulling orders from the AI labs and at the moment the AI labs don’t have the cash to pay that bill. A rather important detail in this whole mix.

   So either the labs need to start printing money, now, or there’s going to be a whole bunch of excess chips hitting the market in 2027-28.

   Someone in the middle is going to get left taking delivery of all these chips but unable to collect payment for them. And someone else is going to get left holding the bag on data center loans to house those chips. That’s the storm ahead.

   1. hollerith · 1790944608 · focus · HN ↗

      The payments coming due for contracted memory purchases are spread out over 5 to 10 years, not 1 to 2 years as implied by your "excess chips hitting the market in 2027-28".

      For memory specifically, the counterparties are mainly "Google, Microsoft, Amazon, Meta, even Apple" like my sibling comment says (plus creditors most of us have never heard of making loans secured by data centers OpenAI and Anthropic plan to rely on).

      Going public should make OpenAI and Anthropic a more attractive target for new large loans, again mostly secured by data centers.

      If demand for AI services flatlines or if an international agreement stops the labs from training any new models (for safety reasons), then memory prices, GPU prices and inference prices will probably fall drastically, but OpenAI and Anthropic would probably survive that.

      1. m4rtink · 1790957076 · focus · HN ↗

         As long as they are taking deliveries, they need to pay for them somehow. And given the very visible shortage, the amount of stuff they ordered is massive & the payouts to the manufacturers will be similarly bug.

         I don't think Micron & co in the memory cartel will be just shipping stuff on loan till 2028.

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