technology

As has been mentioned, private equity grifting, but also

They're not really -for- anyone, and they may or may not even get built. It's a front for the circular financing that's propping up the bubble. NVidia invests $3bn in OpenAI, who goes and buys $3bn worth of future datacenter capacity from a cloud provider, who pre-purchase $3bn of GPUs from NVidia.

Everybody just made $3bn and the line keeps going up.

Obviously if you can run frontier quality models on consumer hardware then the quality of models you can run in a data center will let you hit AGI. Unless there's any sort of diminishing returns in quality when increasing model size.

But in seriousness Qwen3.8 was trained in a data center. It takes way more VRAM and compute to train a model than to run one.

Basically the top tier datacenter models right now are extreme generalists and store quite a lot of humanity's total knowledge on them, even the ones that are capable of being run locally are 2-4tb in size and would require thousands of gigabytes of ram to run well, a cluster that could run that would cost 50k-100k usd. The local 27b models try to rip out the "intelligence" of these titanic large models. They then augment the model's intelligence with toolcalls (looking at say, github or a search engine) instead of having all the knowledge baked into the model. This approach results in less hallucinations and far less resource usage, but it also isn't as generally useful because you may not have access to some niche information, information you couldn't find with a google search.

The big benefit for local models is you can use them to crush through a lot of google searches in one go and find you a good source, its great for people doing scientific research because you can search all the journals you have access to very quickly for relevant info. Its also great for doing up small bits of code quickly and iterating on that code for your various experiments.

The big tech companies have more money than God and have had historically high revenue growth for decades. They achieve that high growth rate by re-investing that giant stream of money into more growth. Their stocks are entirely valued on that high growth rate - for whatever reason, growth is valued more than dividends in the current stock market climate. But they've basically saturated their markets - Google can't spend more money to make more people use search, Facebook can't spend more money to make more people use social media, approximately everybody with an internet connection is already using those. They can't just sit on the money, because if they do, the expected thing is to pay a portion of it out to the shareholders as a dividend. But dividend stocks are valued less than growth stocks, so their stock price will tank, and the board (comprised of rich people who own a lot of that company's stock) don't want that to happen. So they need something else to spend the giant stream of cash on.

Data centers full of GPUs are the most expensive possible thing that a tech company could conceivably make a profit off of, so it solves the problem of what to do with the giant stream of cash. And the boards and investors are required to believe in it, because otherwise they're wasting the giant stream of cash.

Surveillance and squeezing stones.

its a real estate bubble

Honestly it's all up in the air at this point, I don't think anybody can predict what kind of AI will be ran on data centres and on consumer hardware in the next 5-10 years. Maybe it all deflates because we hit a wall with it, maybe your phone will run a model more powerful than today's top ones.

My guess is the really good models will keep running on data centres but will be prohibitively expensive and/or will have their use regulated by their government so only big institutions and companies get access to it and the users will be running dumber models on their own hardware.

I also cannot deny the military applications something like a fast running qwen 3.8 27b will have for guerrilla groups. I think we're going to see a revolution in warfare soon, and it might become so deadly that no country will be interested in fucking with anyone because even individual civilians will be able to destroy major targets. Drones will be able to be trained on specific individuals faces, they can be used as smart missiles, they can be mobile defensive mines to protect against aerial bombardment, you can constantly surveil an area with automated drone swarms, the possibilities are endless and its frankly pretty dangerous tech.

Training a frontier model is like Karsus' casting a 12th level spell. it takes a massive amount of everything to get it to go. Even the enigma machine was huge before it could be one shot by claude. So if it's going to become something that can use your phone's worth of compute then it's gotta get big and dense and then you take the 10% of it that works and do it over again. But in the mean time they'll keep pushing the frontier, it'll get distilled and open sourced, and that will be whittled down. Like a giant, electric-steel, writhing eldritch monster

Surveillance