I was looking into the new, probably AI, data center being built in town and noticed it’s built by a private equity backed firm. The data center was rejected by the city and has to operate with a standard cooperate building water supply. They said are switching to air cooling only and reducing the compute power to keep power usage the same. This has caused amazon, the alleged operator, to back out. So they are building a giant reduced capacity data center with no operator and apparently still think that’s a good idea. My understanding of the private equity bubble is that the firms can hide “under performing” assets because it’s all private. From what I read, possibly 3.2 Trillion dollars of it. I feel like this new data center is going on the “under performing” pile.
I would not call PE a “bubble”. It’s not something people are just tossing money into because there are nebulous promises and the numbers are going up. PE is involved in EVERYTHING - restaurants, housing, tech, manufacturing, finance, marketing. It’s not an industry, just a way of investing that bypasses pretty much all of the safeguards and regulations societies have put in place for public trading. And I don’t expect it to “pop”. Either it continues, and all of the wealth continues to be concentrated towards the top, or the populace manages to take enough power back to get legislation, regulation, and enforcement to add transparency and rules to private equity.
litchralee@sh.itjust.works 1 day ago
I’m not going to come running to the defense of private equity (PE) firms, but compared to so-called AI companies, the PE firms are at least building tangible things that have an ostensible alternative use. A physical data center building – even one located far away from the typical metropolitan area that have better connectivity to the world’s fibre networks – will still be an asset with some utility, when/if the AI bubble pops.
In that scenario, the PE firm would certainly take a haircut on their investment, but they’d still get something because an already-built data center will sell for some non-zero price, with possible buyers being the conventional, non-AI companies that just happen to need some cheap rack space. Looking at the AI companies though, what assets do they have which carry some intrinsic value?
It is often said that during the California Gold Rush, the richest people were not those which staked our the best gold mines, but those who sold pickaxes to miners. So too would PE firms pivot to whatever comes next, selling their remaining interest from the prior hype cycle and moving to the next.
I’ve opined before that because no one knows when the bubble with burst, it is simultaneously financially dangerous to: 1) invest into that market segment, but also 2) to exit from that market segment. And so if a PE firm is already bet most of the farm, then they might just have to follow through with it and pray for the best.
BlameThePeacock@lemmy.ca 1 day ago
It’s important to note that in some previous bubbles, the leftovers of the crash ended up spurring new beneficial growth after.
GPUlike computing power available at scape for essentially free after the ai crash could be used in all sorts of potential ways.
Maybe it makes rending movies with special effects super cheap, and available even to tiny indie studios. Maybe scientists grab it for running physics simulations or disease treatment computations.
gravitas_deficiency@sh.itjust.works 1 day ago
The problem is that the deprecation/obsolescence/lifetime cycles of GPUs is WAY more rapid than anyone in the “AI” circlejerk bubble is willing to admit. Aside from the generational upgrades that you tend to see in GPUs, which make older models far less valuable in terms of investment, server hardware simply cannot function at peak load indefinitely - and running GPUs at peak load constantly MASSIVELY shortens the MTBF.
TL;DR: the way GPUs are used in ML applications mean that they tend to cook themselves WAY quicker than the GPU you have in your gaming machine or console - as in, they often have a couple of years lifetime, max, and that failure rate is a bell curve.
Munkisquisher@lemmy.nz 1 day ago
Cloud compute was attractive to 3d rendering for a while, as you could put your non urgent renders on the cloud at the lowest priority and take advantage of off peak pricing. Now model training demand has wiped out off peak pricing and forced the cloud rendering cost way higher than rendering locally.
fullsquare@awful.systems 1 day ago
gpus as used for genai aren’t really suitable for normal loads like aerodynamic simulations, genai uses low precision data like fp8, fp4, blackwells and such are optimized for it so hard that you can’t really do anything else on this thing
litchralee@sh.itjust.works 1 day ago
Absolutely, yes. I didn’t want to elongate my comment further, but one odd benefit of the Dot Com bubble collapsing was all of the dark fibre optic cable laid in the ground. Those would later be lit up, to provide additional bandwidth or private circuits, and some even became fibre to the home, since some municipalities ended up owning the fibre network.
In a strange twist, the company that produced a lot of this fibre optic cable and went bankrupt during the bubble pop – Corning Glass – would later become instrumental in another boom, because their glass expertise meant they knew how to produce durable smartphone screens. They are the maker of Gorilla Glass.
Feyd@programming.dev 1 day ago
Running those power hungry gpu based data centers is going to cost beaucoup bucks regardless of the usage.
scarabic@lemmy.world 1 day ago
I acknowledge your point about alternate use, but we also need to look at a datacenter we may or may not need as a “power consumption plant.” These jackasses just keep loading and loading up the grid, looking to make a private dollar on public infrastructure. It’s wasteful and not necessarily a baseline good thing ^TM even if AI goes flop.
litchralee@sh.itjust.works 23 hours ago
Used for AI, I agree that a faraway, loud, energy-hungry data center comes with a huge host of negatives for the locals, to the point that I’m not sure why they keep getting building approval.
But my point is that in an eventual post-bubble puncture world where AI has its market correction, there will be at least some salvage value in a building that already has power and data connections. A loud, energy-hungry data center can be tamed to be quiet and energy-sipping based on what’s hardware it’s filled in. Remove the GPUs and add some plain servers and that’s a run-of-the-mill data center, the likes of which have been neighbors to urbanites for decades.
I suppose I’d rehash my opinion as such: building new data centers can be wasteful, but I think changing out the workload can do a lot to reduce the impacts (aka harm reduction), making it less like reopening a landfill, and more like rededicating a warehouse. If the building is already standing, there’s no point in tearing it down without cause. Worst case, it becomes climate-controlled paper document storage, which is the least impactful use-case I can imagine.