AI’s US$400 billion problem: Are chips getting old too fast?
Before the AI wave unleashed by ChatGPT, cloud computing giants typically assumed that their chips and servers would last about six years
In pursuit of the AI dream, the tech industry this year has plunked down about US$400 billion on specialised chips and data centres, but questions are mounting about the wisdom of such unprecedented levels of investment.
At the heart of the doubts: overly optimistic estimates about how long these specialised chips will last before becoming obsolete.
With persistent worries of an AI bubble and so much of the US economy now riding on the boom in artificial intelligence, analysts warn that the wake-up call could be brutal and costly.
“Fraud” is how renowned investor Michael Burry, made famous by the movie The Big Short, described the situation on X in early November.
Before the AI wave unleashed by ChatGPT, cloud computing giants typically assumed that their chips and servers would last about six years.
But Mihir Kshirsagar of Princeton University’s Centre for Information Technology Policy says the “combination of wear and tear along with technological obsolescence makes the six-year assumption hard to sustain”.