Thread

1. bunderbunder · 1790952773 · focus · HN ↗

   Oracle's recent force majeure invocation shines a spotlight on what seems to be an endemic problem: datacenter builders have been signing commitments to bring a certain amount of capacity online by a certain date, without first conducting sufficient due diligence about whether they would be able to secure all the resources needed to meet those commitments.

   This means they are now caught in a mad scramble to source all sorts of stuff, including RAM, potentially as a matter of life and death.

   What's less clear to me, though, is whether datacenter builders will be able to make good on these purchase agreements. It seems these projects have every opportunity to fail, and the path to success keeps getting narrower. What are the odds that chip manufacturers ultimately get caught holding a bag of chips that nobody can buy in one hand, and a bag of IOUs from bankrupt customers in the other?

   1. LetsGetTechnicl · 1790953187 · focus · HN ↗

      Yeah there was just a story about how there are hundreds of billions of dollars in "non-cancellable" debt obligations to build AI data centers. But they're building far beyond current demand, I feel like the collapse is inevitable.

      1. NooneAtAll3 · 1790954008 · focus · HN ↗

         sure, collapse is inevitable, alright

         how does one prepare for the moment it actually happens? what would it look like?

         what were the immediate consequences of dotcom for the normal folk?

         1. LetsGetTechnicl · 1790954176 · focus · HN ↗

            I'm sensing sarcasm but is it not true that the scale of obligations is unsustainable?

            As for preparation, I'm not sure. I have a 401k that I'm worried about. I'm too young to really remember the dotcom bubble, let alone have any stake in the stock market at the time.

            1. mapontosevenths · 1790956022 · focus · HN ↗

               Save money now.

               When the bubble bursts it will depress valuations across the board, including the valuations of the good companies that will survive to eventually own significant market share. Buy those at those depressed prices and wait a decade.

               The trick will be learning to tell the difference between the Google's and the pet.com's of the AI era. The trick during the dotcom situation was to look for companies that had actual gross profit and were reinvesting it, rather than companies that only had theoretical profit based on nonsense like market share and eyeballs.

               Take Amazon as an example. They were $107 a share in 1999. By late 2001, it had fallen to under $6. Now they are $250. It still took almost 10 years to recover.

               1. kortilla · 1791089903 · focus · HN ↗

                  Your Amazon example is misleading. That $250 price today really undersells the growth because that’s post split. Their dot com high was like $4 in today’s terms. Or multiply today’s price by 20 for the 1999 equivalent ($5000).

                  It doesn’t negate your point about 10 years to recover but it’s important to highlight how substantial the growth was after it did.

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