this post was submitted on 03 Apr 2026
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Makes sense. It takes years to complete construction projects and budgets always overrun. AI is a fad for most companies trying to get into it.
Think about the dotcom bubble. We went from having all of these businesses that shot to the moon for valuation... and then it collapsed. Feels exactly the same. A few will survive to become metas and googles because it is not a worthless technology, but most of them are going to be worthless companies when investors decide it's time to run.
Amazon and Google and basically all of FAANG/MAMA beg to differ.
And basically every company still has a website and ecommerce in general is still massive.
The Dot Com bubble was brutal. But it was not a collapse of the industry. It was much more of a correction after so many companies blew up to sell services like "rate my dog" and many of the smaller ecommerce sites were absorbed by larger ones.
And that is likely what will happen with generative AI. I expect a MUCH bigger bloodbath for openai but anthropic seem to have scaled a lot better (although they also are going into their IPO with a massive data breach...). But expect most of the smaller companies to similarly get gutted.
But
Data Centers exploding... honestly have little to do with AI. No... not the way they explode in the UAE... metaphorical exploding. The reality is that data centers are GOOD money. Basically every company needs data hosting and offloading internal infrastructure is... honestly a really smart play. Same with the massive push for streaming of basically everything so that nobody owns anything and subscribe to everything. You want regional data centers and... this is how you get them.
FAANG exists because they have rock solid products with built in users. Their new business initiatives and decisions are woefully lacking. The new ideas aren't bubbling up. Nvidia is the only one that isn't staring into the abyss but their only products are iterative and once something revolutionary comes along they are sunk, like AMD v Intel these last 5 years.
Don't think FAANG is a leader of anything except valuation. They are hopeless business leaders.
I mean they don’t beg to differ at all and it absolutely collapsed. The result of which is the reason why FAANG as an acronym exists. FAANG is the resulting consolidation of the industry made possible by its widespread collapse.
It collapsed into... 4 or 5 of the most powerful companies in human history.
And that is the thing to understand. These bubbles are less about widespread collapse and more about consolidation. And it tends to be the smaller companies that suffer, not the biggies who were driving much of it to begin with.
You’re just describing bubbles. That a few survived is not the strong point you think it is.
Data centers existing makes sense, but this specific aggressive AI data center buildout (with special-purpose hardware) doesn't: the two AI companies you mentioned, OpenAI and Anthropic, aren't making a profit, and they don't appear to have a viable path to one. OpenAI claims it'll be wildly profitable in just a few years, but they don't go into how.
"aren't making a profit" gets into the mess that is book keeping and is a giant rabbit hole people actively avoid because it is just easier to get angry at stupidity rather than complex malfeasance.
But what makes something an "AI data center" outside of the branding?
The reality is that it is a shit ton of computers connected to a really fast internet connection. Preferably through a properly managed set of switches but you do you. And the reason that we still mostly use GPUs for "AI" rather than highly specialized hardware (although, nvidia DID just buy groq a few months back...) is for that reason. They might do linear algebra of quarter precision floats REALLY well but they also do linear algebra of single and double precision floats pretty well too. And the CPUs and mobos (that are mostly optimized for data movement to offload to said GPUs) are no slouches either.
Which is what most of these companies are planning for. openai is, arguably, really fucking stupid. Whereas anthropic have shown decent signs of "diversifying" as it were. And nvidia... if we lived in a world where they could get enough RAM I think they would be fine. As it stands... Jensen (and a LOT of people) are kinda fucked and I expect to see a hard pivot over the next 12 months.
Because if we banned ALL generative AI tomorrow? The people who think you can't use a computer without installing litellm first are gonna be fucked. But everyone else will just put other workloads on there and be... "fine" is a strong word but they won't go bankrupt. And the data centers themselves will still be incredibly valuable.
I wish GPUs in AI data centers (or worse, the ones purchased and not installed yet) were more general-purpose than they appear to be. That's the part that makes them AI data centers: the optimized hardware.
I do agree things are complex. And I like reading about the intricacies of that complexity. The overall picture is still a pretty bad one, though.