I'm not saying they won't (the "if" is an important word in the sentence), it's just that datacentre growth is not the same as AI growth. It's related, but it is, by definition, temporary as datacentres are soon completed.
There's obviously evidence people use LLMs. That's not necessarily the same as people paying a noticeable fraction of all their money to use them in perpetuity. And even if "normal" people do start taking out $50 subscriptions as a matter of course, commoditisation could push that price down as could "dumping" of cheap models from overseas. A breakthrough in being able to run "good enough" models very cheaply, or even locally, would also make expensive cloud AI subscriptions a hard sell. And expensive subscriptions are the only way this pans out.
It hasn't yet been shown that AI is a gas that will fill all the available capacity, and keep it filled. If bread were 10 times cheaper, would you buy 10x as much? That has more or less happened to food availability in the West over the last 200 years and OpenBread and BunVidia don't dominate the economy.
None of that is sure to happen, and maybe the AI hype train is right and huge expensive LLMs specifically drive a gigantic productivity boom¹ and are worth, say, 0.2*GDP forever. But if it isn't, and it turns out $5 a month gets you all people actually need, it's going to be untidy.
¹: in which case, why is GDP not growing from the AI we already have?
It is very interesting to see two completely different positions on the economics AI but come to the same conclusion that AI is a bubble
1. LLM's are so economically unfeasible that companies won't be able to make a profit and investing in datacenters will turn out to be a bad bet because AI companies themselves are a bubble
2. LLM's will become so cheap that datacenters will be useless and people will just use local models so investing in datacenters is a bad bet
I see both positions in this thread so which one is true?
It's a spectrum of possibilities upon which, as yet, no one is sure where it will land. Invested proponents say it will eat the world. Sceptics say it's all a crock of shit. Anyone who says they know the answer, doesn't.
The two positions there aren't really different, they're mostly that the profitability of AI can be eroded from several sides. One: the cost to run (power and hardware) being high and bring unable to recover it from revenue. Or two, commoditisation and efficiencies (which can also be operational convenience rather than only about power) driving down costs and therefore also revenue, and being unable to compensate by selling more AI more cheaply. Three: AI didn't actually help as many people make money as hoped and thus they don't want to pay, also depressing revenue.
In the middle is the three-axis happy AI place where costs are not too high, but also AI is too hard to have someone else do it cheaper, and it's useful enough to be paid for.
My guess is AI ending up roughly as impactful overall as cloud computing. A big industry, makes a lot of money, touches and enables very many businesses but hasn't replaced the entire economy, profitable especially if you can stake out a moat, with low-margin battlegrounds for the price-sensitive.
I agree with all your points. But I still do feel it is interesting that the vibe is on both ends of the opposite spectrum - both highly efficient and highly expensive.
Maybe it just works out like CPUs or as you said cloud computing? CPU's got cheaper and demand increased and more people use them but everyone still made a profit.
It just goes to show how little information there really is about what will happen here. Literally no one knows. It's uncharted territory, but it's filled with map-sellers.
Another good example is railways in the US. That was an huge, huge boom, around a fifth of GDP. No one knew what the railway-based economy of the 1900s would look like but it was surely going to be spectacular. All that money! The speed! The cargo! All those people! Railways absolutely were a commerce multiplier, and made stacks of revenue very quickly and got investment from around the world to build build build. But, eventually, the (over)building was done, there were bankruptcies and consolidations and it ultimately did not become the dominant industry. And yet, it's still a big industry that enables a lot of other economic activity. Trains are still expensive to operate, but moving goods is pretty cheap. Obviously there's a natural physical monopoly at play there that AI doesn't have so again, who knows.
Which leads to another thought the AI investors, both commercial and national, maybe should eventually have: is there an automobile or airliner to their railway?