I also understood that it was partly a FOMO mentality, the fear of missing out, that was also driving this AI Datacenter boom. Everyone wants to be the next Google, a company that provides a service so essential that their name become the description to what it does. Like Google is a verb in "to Google". There have been other successful internet companies but none to the scale of Google. Some will rise to dominance but who will later fade away. Facebook is a good example. In social media, people have started to move away from Facebook to other services such as instagram and tiktok. Facebook bought Instagram and that's why they remain relevant as a company. It also copied Twitter, tiktok and Snapchat services to be competitive. But many people under 20 don't have a Facebook account. All of these AI companies who are competing with each other, want to be dominant and will take the steps to become so. That that means building datacenters.
So, what does this have to do with running AI and the data Center boom? The secret is right there: It doesn't take a lot of processing power to run AI. Specifically, it doesn't take a a high end GPU to run AI. In fact, Local AI is where you download AI models and run them on your own hardware. This is obviously a threat to the AI companies. They would be less relevant if more people can run AI themselves. What would prevent people from running their own AI? Everyone would need a GPU powered laptop or PCs fitted with the GPU card. This is compounded when you factor in that normally prices for new technology drives the price of existing tech down. Your want faster processors which means that slightly older CPUs would cost less. Same thing works for storage. New storage devices rolling out of the factories with higher capacities would drive down the prices of the product already on the shelf. So the companies thought, how can this be stopped?
What if the data Center boom is actually a play against local AI? The construction of all of these new data centers gives a reason to buy out an entire year's inventory of GPUs and storage. That will drive up the prices of inventory in the market and make running local AI more expensive. If you can make running local AI more expensive than subscribing to AI Services, you would slow down the adoption of local AI by corporations and drive customers to your AI subscription services. And do you really need to buy all that storage and GPUs? Hardware that will become obsolete in the coming months? Or will this eventually lead to a situation where the consumer is forced to buy pre-owned GPUs and storage from the data centers? It is so important for these AI companies to build these data centers and buy all the GPUs and storage that they finance it all thru a circle-jerk financial and investment arrangement that will fold like dominos if something goes wrong, bringing down the entire stock market because investment firms are so into AI investments.
These companies can't stop local AI entirely because there are free and open source AI models. These models have become smaller and easier to run on consumer GPUs. But if you starve the market of GPUs, more people can't run Local AI immediately because the prices are so high. And maybe that's the point.
