Item — HN Reader

>(world's first trillionaire anyone?)

With some work on crypto many people could be a trillionaire on paper. Whether it translate to actual wealth and liquidity is another matter. We are talking about P/E of 300 / P/S of close to 100 for Tesla and SpaceX.

>When exactly are the upsides going to hit?

A lot of people take Moore's law, or technology improvement as granted. It will always come. It will always become cheaper. But none of that is true. Massive R&D is required along with ROI.

The AI Boom pushed a lot of technology forward by at least 2 - 3 years or 1 cycle. What normally would have taken 10 years to happen is now getting close to 5 years. We were suppose to stagnate or slow down with 3nm and 2nm, we are now rushing to push through everything from interconnect, smaller transistor and massive increase in Foundry capacity. PCI-Express 8.0, Nvidia Photonics, DRAM Improvement, HBM, HBF, even capacitor, immersive cooling. I don't even record the last time we had such a massive shift and changes in hardware technology. Even the start of smartphone era wasn't like this as majority of its start was picking on lower end PC components. Instead the AI is pushing the frontier hardware technology. With multiple trillion companies, insane appetite from market. We are basically saying we have Trillions to spend over the next 5 years. Give me everything you have got.

3 comments

Sure would be nice if we got to see any of that, instead of it all going solely to resource guzzling data centres selling opaque models whilst simultaneously destroying the pricing for local hardware!

>Sure would be nice if we got to see any of that,

We are only 1 to 2 year into a cycle and we expect a lot of things to happen. Even the business decisions of things were decided before the cycle happened, as if they are fortune teller or God, the hardware lead time would meant it will be next year at best before we see results. And Nvidia has already moved at a faster pace than most imagined. Latest GPU R&D are now fully amortised on the AI server front. GPU now move to leading edge node faster than before and iterate on a shorter cycle. I have yet to read a single comments on either HN, Reddit or wider internet that appreciate this.

And as to NAND and DRAM, which most people are concern. We only need a few companies to commit to long term ( 3 - 5 years ) agreement on pricing and quantity, DRAM and NAND will increase supply or new fabs accordingly. This isn't new and is exactly what Apple did with iPod. But no companies wants to do that, as they all want lowest price and little commitment, while foundry don't want to bare the risk of new fab and over supply in the long term. This is just classic commodity supply and demand scenario.

On a simpler terms, no one asked why Toilet paper companies aren't putting up more factory just to output more paper rolls during COVID. And If you need 5 to 10 years just to earn back the cost of additional supply line, why risk that?

Please show sources. Maybe no one appreciates it because it's only rumors spread by enterprises massively profiting from such rumors? And about your toilet paper analogy: Every producer tried everything to improve output. You cannot just let your machines run faster. You also need input materials, workers and logistics to scale accordingly, which is often not possible.

>You cannot just let your machines run faster. You also need input materials, workers and logistics to scale accordingly, which is often not possible.

It is not about getting machines to run faster, it is about buying new machines setting up a whole new line. And the ROI will never make sense until the scale and price reach certain point.

>Please show sources.

You can literally apply the same theory across all commodity industry. The problem is supply Chain was never understood by wider audience.

> We are basically saying we have Trillions to spend over the next 5 years. Give me everything you have got.

We are saying AI companies have trillions to spend over the next 5 years on infrastructure, based on servicing a hypothetical TAM that includes large amounts of workers who it also expects to displace.

One of these two things can be true.

> The AI Boom pushed a lot of technology forward by at least 2 - 3 years or 1 cycle.

Untrue. Technology has been evolving perfectly fine for the last 50 years. If anything it has slowed down lately due to getting close to the physical limits - which were reached without any AI whatsoever. We were getting insane gains in clock speed and memory capacity some 20 odd years ago, it's not the case any more.

> We are basically saying we have Trillions to spend over the next 5 years.

No we don't, inflation tells you that loud and clear. If the Fed wanted to really take care of the raging (but under-reported) inflation, they'd have to raise interest rates a lot more but that would kill the pump-up operation of the AI market bubble. So the Fed is sitting on their hands.

> Give me everything you have got.

That figures. I'm pretty sure you're never going to say "We're giving you everything we've got". The asset pump works only one way - up, trickle down is for losers. You see, the trillionares aren't waiting for the bright future, they're grabbing all they can right now, only the peons are forced to "give everything they've got" while on a steady diet of hallucinations which can never materialize.

>Technology has been evolving perfectly fine for the last 50 years.

Tell that to Intel and how TSMC manage to outpace Intel. It was because Smartphone had a much bigger scale. The TAM of custom foundry went up by 10x.