| ▲ | jmyeet a day ago | |
There was an excellent article about AI DC value and depreciation yesterday [1] (discussion [2]). The effective life of GPUs in paticular is a huge unknown. One of my big questions has always been "what will happen to existing GPUs when new GPUs come out?" My guess is that the life of these things isn't as long as the depreciation schedules for some of these companies would have you believe. IIRC Meta was using an 8 year schedule whereas Google is using 4-6, which seems more realistic. I believe that performance-per-Watt is going to be the only metric that matters. We already have 6 year old hardware (A100) that cannot run the latest models. There will also be new capabilities (eg quantization methods). I'm not concerned with Alphabet's cash burn rate to be honest. These tech companies are typically shielding themselves from the consequences of this by using Special Purpose Vehicles ("SPVs") where the GPUs themselves are the secured assets for the loans. Even the physical buildings and infrastructure isn't owned by the SPV. Those are rented from another vehicle. So investors are pouring money in to buy GPUs for Google, Amazon, etc. Even SpaceX is partly-insulated by using an xAI SPV. All of this is I think is a huge risk for OpenAI and Anthropic. The risk to SpaceX is a stock collapse because the AI aspect was always overstated (IMHO). I think Google will be fine. What is funny is that this is almost using Private Equity type tactics against other investors. Things like the structcures in which the real estate and physical buildings are held in separate entities and the SPVs end up off balance sheet. [1]: https://ciphertalk.substack.com/p/nobody-knows-what-a-used-g... | ||