Cancelling new data centers because deep seek has shown a more efficient path isn’t proof that AI is dead as the author claims.
Fiber buildouts were cancelled back in 2000 because multimode made existing fiber more efficient. The Internet investment bubble popped. That didn’t mean the Internet was dead.
yeah, genai as a technology and field of study may not disappear. genai as an overinflated product marketed as the be all end all that would solve all of humanity’s problems may. the bubble can’t burst soon enough
Exactly. It’s not as if this tech is going in the dumpster, but all of these companies basing their multi-trillion-dollar market cap on it are in for a rude awakening. Kinda like how the 2008 housing market crash didn’t mean that people no longer owned homes, but we all felt the effects of it.
Historically, the field of AI research has gone through boom and bust cycles. The first boom was during the Vietnam War with DARPA dumping money into it. As opposition to the Vietnam War grew, DARPA funding dried up, and the field went into hibernation with only minor advancement for decades. Then the tech giant monopolies saw an opportunity for a new bubble.
It’d be nice if it could be funded at a more steady, sustainable level, but apparently capitalism can’t do that.
Sometimes the hype bubble bursts and then the products eventually grows to be even larger than the hype. But you never know how connected hype actually is to any realistic timeline. Hype can pop like a cherry tree flowering on the first sunny day of spring, thinking summer has arrived, but then get drenched by another few weeks of rain. And as stupid as that cherry tree is, summer will eventually arrive.
I’m gonna disagree - it’s not like DeepSeek uncovered some upper limit to how much compute you can throw at the problem. More efficient hardware use should be amazing for AI since it allows you to scale even further.
This means that MS isn’t expecting these data centers to generate enough revenue to be profitable, and they’re not willing to bet on further advancements that might make them profitable. In other words, MS doesn’t have a positive outlook for AI.
Exactly. If AI were to scale like the people at OpenAI hoped, they would be celebrating like crazy because their scaling goal was literally infinity. Like seriously the plan that openai had a year ago was to scale their AI compute to be the biggest energy consumer in the world with many dedicated nuclear power plants just for their data centers. That means if they dont grab onto any and every opportunity for more energy, they have lost faith in their original plan.
More efficient hardware use should be amazing for AI since it allows you to scale even further.
If you can achieve scaling with software, you can delay current plans for expensive hardware. If a new driver came out that gave Nvidia 5090 performance to games with gtx1080 equivalent hardware would you still buy a new video card this year?
When all the Telcos scaled back on building fiber in 2000, that was because they didn’t have a positive outlook for the Internet?
Or when video game companies went bankrupt in the 1980’s, it was because video games were over as entertainment?
There’s a huge leap between not spending billions on new data centers ( which are used for more than just AI), and claiming that’s the reason AI is over.
If buying a new video card made me money, yes.
This doesn’t really work, because the goal when you buy a video card isn’t to have the most possible processing power ever and playing video games doesn’t scale linearly so having an additional card doesn’t add anything.
If I was mining crypto, or selling GPU compute (which is basically what ai companies are doing) and the existing card got an update that made it perform on par with new cards, I would buy out the existing cards and when there are no more, I would buy up the newer cards, they are both generating revenue still.
If a new driver came out that gave Nvidia 5090 performance to games with gtx1080 equivalent hardware would you still buy a new video card this year?
It doesn’t make any sense to compare games and AI. Games have a well-defined upper bound for performance. Even Crysis has “maximum settings” that you can’t go above. Supposedly, this doesn’t hold true for AI, scaling it should continually improve it.
So: yes, in your analogy, MS would still buy a new video card this year if they believed in the progress being possible and reasonably likely.
Fiber buildouts were cancelled back in 2000 because multimode made existing fiber more efficient.
Sorry but that makes no sense in multiple ways.
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First of all single mode fiber provides magnitudes higher capacity than multi mode.
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Secondly the modal patterns depend on the physics of the cable, specifically its core diameter. Single mode fibers has a 9 micrometer core, multi mode 50 or 62.5 micrometers. So you can’t change the light modes on existing fiber.
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Thirdly multi mode fiber existed first, so it couldn’t be the improvement. And single mode fiber was becoming the way forward for long distance transmission in 1982 already, and the first transatlantic cable with it was laid in 1988. So it couldn’t be the improvement of 2000 either.
You must mean something else entirely.
This is a good point. It’s never sat right with me that LLMs require such overwhelming resources and cannot be optimized. It’s possible that innovation has been too fast to worry about optimization yet, but all this BS about building new power plants and chip foundries for trillions of dollars and whatnot just seems mad.
AI is a tool, like a hammer. Useful when used for its purpose. Unfortunately every tech company under the sun is using it for the wrong fucking thing. I don’t need AI in my operating system or my browser or my search engine. Just let it work on protein folding, chemical synthesis and other more useful applications. Honestly can’t wait for the AI hype to calm the fuck down.
The only way it’s going to die down is if it gets replaced with the next tech bro buzzword.
The previous one was “smart”, and it stuck around for a very long time.
Preach it. I have been so sick of AI hype and rolling my eyes any time a business advertises it, and in some cases moving on. I don’t care about your glorified chat bot or search engine.
There’s been talk for a while that “AI” has reached a point where merely scaling up compute power is yielding diminishing returns; perhaps Microsoft agrees with that assessment.
My guess is that, given Lemmy’s software developer demographic, I’m not the only person here who is close to this space and these players.
From what I’m seeing in my day to day work, MS is still aggressively dedicated to AI internally.
That’s compatible with a lack of faith in profitable growth opportunity.
So far they have gone big with what I’d characterize as more evolutionary enhancements to tech. While that may find some acceptance, it’s not worth quite enough to pay off the capital investment in this generation of compute. If they overinvest and hope to eventually recoup by not upgrading, they are at severe risk of being superseded by another company that saved some expenditure to have a more modest, but more up to date compute infrastructure.
Another possibility is that they predicted a huge boom of a other companies spending on Azure hosting for AI stuff, and they are predicting those companies won’t have the growth either.
I think deepseek shook them enough to realize what should have been obvious for a while… Brute force doesn’t beat new techniques, and spending the most might not be the safest bet
There’s a ton of new techniques being developed all the time to do things more efficiently, and if you don’t need a crazy context window, in many use cases you can get away with much smaller models that don’t need massive datacenters
I am sure the internal stakeholders of Micro$oft’s AI strategies will be the very last to know. Probably as they are instructed to clean out their desks.
There are a few of us here who are closer to Satya‘s strategic roadmap than you might think.
Context is king which is why even the biggest models get tied in knots when I try them on my niche coding problems. I’ve been playing a bit with NotebookLM which promises to be interesting with enough reference material but unfortunately when I tried to add the Vulcan specs it complained it couldn’t accept them (copyright maybe?).
We have recently been given clearance to use the Gemini Pro tools with Google office at work. While we are still not using them for code generation I have found the transcription and meeting summary tools very useful and certainly a time saver.
Hmm, not meaning to get my conspiracy hat on here but do we think this could relate to the fact that Microsoft now has a quantum computing chip that they can hype to their investors to show they have the next big thing in the bag?
AI has served its purpose and is no longer strategically necessary?
Since they are only spending investors money it doesn’t matter if they burn billions on leading the industry down the wrong path and now they can let it rot on the vine and rake in the next round of funding while the competition scrambles to catch up.
How would that be a conspiracy. If the AI bubble bursts eventually, I’m sure Microsoft won’t want to be among the last ones to leave.
