Hyperscalers are buying all the chips to then rent them to us later
Hyperscalers are purchasing large quantities of chips despite rising prices, anticipating a return on investment through cloud-based AI services. Consumers may end up paying for these chips indirectly through rental models rather than direct ownership. The article suggests waiting for more affordable local AI solutions as an alternative.
- ▪Chip prices are increasing for everyone, including hyperscalers.
- ▪Hyperscalers are buying chips with the expectation of earning a return on investment.
- ▪Consumers are the end-users of these chips when accessed via rented cloud services.
- ▪The author suggests avoiding AI costs until local or federated AI becomes affordable.
- ▪The impact on the B2B market remains unclear to the author.
Opening excerpt (first ~120 words) tap to expand
This may sound alarming, but it appears as simple math to me1. Chip price increase applies to everyone, including hyperscalers 2. I assume most of consumers refuse to pay for such ridiculous prices. 3. Hyperscalers pay the price because they expect return on investment 2. We, consumers, are actually the end-users of the chips they boughtIt appears then that Hyperscalers are outbidding us at buying chips, then will make us pay back the ridiculous price they outbid us with through renting them back to us.The way out seems simple: don't pay for AI and wait till one can afford chips for local (or federated) AI.But there's the whole b2b market that I don't know what to think aboutWhat are your thoughts?
Excerpt limited to ~120 words for fair-use compliance. The full article is at Ycombinator.