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Groq investor sounds alarm on data centers

64 points by giuliomagnifico

by jacquesm

2 subcomments

This data center boom is so reminiscent of the .com period. Suddenly everybody with two computers next to each other had a data center (usually in a closet somewhere, if you were lucky it was locked).

by password54321

0 subcomment

2026 is going to be about going all in on automating software development. This is where the money is currently at as software developers need compute and what could justify all the data centers being built. It is much harder to convert students with limited money or people who don't care about accuracy or the highest end models as much in a lot of other fields. The thing most people even got excited about by the end of this year is obviously Claude Code. If they can solve software development the bubble may take longer than expected to burst.

by ambicapter

0 subcomment

> We will stay largely under the radar
He says this and then publishes the letter on LinkedIn? What's the play?

by fweimer

1 subcomments

> I am also deeply concerned about the “speculative” data center market. The “build it and they will come”strategy is a trap. If you are a hyperscaler, you will own your own data centers.
Is this actually true? I thought that hyperscalers keep datacenters at arm's length, using subsidiaries and outsourcing a lot of things.

by tmaly

1 subcomments

I am hoping things revert to the mean and by extension, the consumer chip prices revert.

by gtirloni

8 subcomments

If/when the AI bubble pops and we're left with hundreds of underutilized datacenters, I think this could be good for hosting customers by driving prices down across the board. Maybe it will make self-hosting even more cheaper than public clouds.

by michaelteter

3 subcomments

Many of the crazy things we see happening today come from the same root problem: the wealth of humanity has increasingly been funneled into the hands of a few. These may be mostly companies rather than individuals, but they are a proxy for a relatively small few people.
This glut of finances leaves those few with a problem: what to do with it? And since accumulation of wealth is the ultimate goal, FOMO encourages increasingly foolish decisions (or at least unsustainable ones).
The housing crisis is one of the outcomes. This AI bubble is another. I'm sure if we look around, we can find other examples.
If resources were more evenly distributed, we would see different regions and peoples doing more varied things which would be appropriate for their needs.

by christophilus

3 subcomments

Axios hijacks the back button. The TLDR is: we’re building too much speculative capacity and the “if we build it, they will come” assumption will be proven wrong.

by delichon

2 subcomments

They are building too many steam engines. It's a bubble that's going to pop and leave investors empty handed. There are only so many mines to pump water out of, mills to turn, textile machines to crank. And those industries have jumped on a bandwagon that they don't understand, and most will soon mostly revert to good old English laborers. His Majesty's subjects are starting to see the terrible environmental effects of burning so much more coal. As a prudent investor I now recommend a Sell for the stocks of the Boulton & Watt company.

by OutOfHere

1 subcomments

by MangoToupe

2 subcomments

> Data centers are becoming political flashpoints, primarily because of their impact on electricity prices.
I'd bet anything that they know people are pissed the market has wildly misallocated capital and are trying to save face by framing it as a cost that directly impacts consumers. In reality, the fear is knowing that our investor class is really too dumb to handle the money we've stuck in a box called "the world's retirement funds" and handed to them.

by morninglight

0 subcomment

A Data Center is a Crypto Miner in disguise. Understand that fact, and you understand the future.