I'm cautiously optimistic that this is the beginning of a much needed correction toward sobriety with regards to AI investment. The macro effects of all the money going into AI are apocalyptic. Maybe we can take some deep breaths and move forward a little smarter if the hype fest slows down a tad. And if we're lucky, eventually be able to afford RAM again.
> The macro effects of all the money going into AI are apocalyptic
The doomer discourse around AI is about as overhyped as the investors are. It's two parties getting pumped up by social media who will be disappointed it's just some new higher economic tier rather than a quick boom or bust.
It always takes twice as long for new markets to fully mature. Industries need to actually adapt technology before they see serious productivity gains (including coding). For now lots of businesses are haphazardly slapping AI on everything and early failures due to immaturity are being used to project long term negative outcomes. While chip and energy development will take even longer as unlike software it's full of the usual baggage of developing things IRL (long term high capital costs, local politics, regulatory compliance, supply chains, etc).
The doomers aren't the one investing billions, so I think they're a slightly lower cause for concern than the ones significantly reshaping the economy.
I'm mostly talking about incredibly environmentally destructive data centers and energy use on the current trajectory. Not even thinking about water problems, the gas and coal requirements alone are climate disasters. [1] [2]
But if it is a bubble, which many would argue is the case, an AI capex bust with it's circular financing collapse is one of, if not THE top threat to global financial stability. ~$725B combined hyperscaler capex in 2026 against roughly $25B of AI service revenue in 2025 on $250B+ of infrastructure spend. Not exactly a promising situation. [3] [4]
This is immediate-picture, I'm not talking about a singularity extinction event. Just what's actually happening right now and the trajectory of the next 4 years.
Hmm. I'm as big an environmentalist as anyone, but I'm pretty sceptical of the data centers as eco disasters narrative. Your sources indicate that renewables already meet over 50% of new data center demand, and the demand is predicted to drive advancements in technologies like SMRs. The water use of a data center is less than a golf course. Gas and coal cannot compete with renewables on price and speed of deployment, and increased utilization of the existing grid can help cover fixed costs which dominate the cost structure, resulting in decreased prices overall even as we increase deployment of renewables.
The facts don't support a real eco panic. IMO it's a proxy for middle class job security fears, displacing into known middle class shibboleths. It can be sincere, but it's motivated reasoning.
China managed to double energy production between 2015-2025 (including 60 nuclear reactors). On paper the west should be able to do the same, tech companies are putting huge money into solar, natural gas, and nuclear. Most of the limitations are as you mention people protesting the whole idea of new industry and energy, which is the source of most of the risk. That plus open model/Chinese competition undercutting some big US IPOs.
The long term investments in datacenters and chip manufacturing will likely coincide with with growth in demand from humanoid robots and self-driving cars, so it is likely going to happen anyway over the next decade.
It just will take longer than people expect which creates financial risk, but US capital markets are more resilient than people think.
> people protesting the whole idea of new industry and energy,
I may be venturing into aluminum hat territory but it appears that oil and gas companies and conservative organizations are pumping all sorts of FUD and misinformation into the anti-solar, anti-battery movement, period.
One of the arguments against widespread solar is that it's environmentally damaging, yet, time and time again, it's shown that solar farms increase soil moisture, improve biodiversity in plants and insects, period. If cattle or sheep are grazing on that land, the shade reduces their stress from summer heat and can also shelter them sometimes in the winter.
Again, may be complete BS, but apparently Chinese desert solar farms are increasing the moisture in the desert, making it easier for plants to grow and increasing rainfall downstream from the plant solar farms.
China has tightly integrated domestic supply and a centrally planned economy. That's why China has consistently been able to do things that are simply impossible in the west.
I had to buy an SSD and some RAM to help my son build a PC.
The SSD cost 30% more than I paid two years ago and was half the capacity (1TB).
The RAM cost double what I paid two years ago, was slower, and was half the capacity (32GB).
I hope you’re right. It does seem like we’re finally coming down off the peak of the hype cycle. I use Claude Code daily, but man I am just tired of hearing about AI. I’m tired of holding off on backing up my home server because disks are so expensive. I’m tired of HN being 50% articles about AI.
> holding off on backing up my home server because disks are so expensive
I think there are so many people in this same situation, not just with disks (and RAM), but all of the components because of bottlenecks of upgrading one without others, that there's going to be this on-going surge in demand starting from corporate and then trickling through decreasingly sized businesses and then finally the consumer market and this could keep prices higher for longer than most people are expecting.
I recently bought some second hand ex-terminal servers to run homelab stuff. I'd have preferred to get one big-ish thing to run it all, but it was more cost effective to get a handful of smaller, lower-spec devices since that's not what people are trying to get their hands on at the moment.
I think at this point writing like stream of consciousness / having imperfect grammar acts like a soft signal and I am inclined to pay it more attention.
Based on everything I've seen, this is an all-out sprint to whatever the goalpost is - superintelligence, AGI, singularity. Whoever is first will win, everyone else will lose.
I don't know if it's true or not, but it seems to explain the current direction of tech and leads me to believe no CEO is going to allow his company to slow down.
At some point the "money people" are going to stop setting huge piles of money on fire.
Big tech can finance a lot of AI investments themselves, but they can't keep up the current investments just by themselves, without compromising their non-AI business.
I do not work in finance, perhaps someone here can tell me if I have the wrong impression on the situation here:
Tech giants with AI interests, hyperscalers, have used "special purpose vehicles" — shell companies — to quietly issue credit to AI companies, and these AI companies have used this line of credit to purchase/lease compute hardware/infrastructure primarily from their creditors, inflating the demand and price of said hardware.
And much of the future infrastructure has yet to be constructed, and the hardware available now will at some point become obsolete or at least decrease in collateral value.
But the credit doesn't actually come from the hyperscalers themselves, as it exceeds their actual cashflow, so it comes from investment banks and/or private investors/lenders... who actually absorb the majority of the risk then?
And the big banks are currently offloading their loans at discounted rates, while simultaneously trading in swaps against hyperscalers?
I presume the reason for the shell companies/private funding shadiness, is to keep debt off-the-record and perhaps avoid regulation / exceed risk tolerance limits.
Just how exposed are the banks and the hyperscalers in all this?
There is undoubtedly a bubble in the sense that AI is crazy overfinanced, and there's a semiconductor shortage - chip makers usually have like mid to low two digit margins for manufacturers of complex chips like NVIDIA, and single digit for ones commodities like memory.
The fact that these companies are either selling these things at multiples of their previous prices, and even then, their P/E ratios are often 10,20,40 shows there's a bidding war for these chips.
It's too much money chasing a fixed amount of product, and the only way to scale the industry is by scaling the entire supply chain, which is a long and expensive process, and certainly isn't fixed by throwing more money at companies.
If existing hardware was sold at the usual margins, all this stuff would cost a tiny fraction of the current price.
I'd be cautious describing market sell offs as good news for anyone since the fall out could be pretty bad (that's a "worst case" scenario, so far nothing like that)
There's some winners though, people dumping AI stocks are mostly buying stocks elsewhere, Apple being an obvious winner[0].
I wasn't referring to the purely financial angle. I meant that whatever news is driving this apparent valuation change could have impacts on other companies (like ones that are having to cope with the chip shortages).
I’m wondering if this is leveraged investors in KOSPI, where retail > institutional traders. More leverage = more volatility. If it actually IS a correction, I’m hoping that some of these data center projects, the ones that are REITs wearing a funny hat, can stop.
Both Samsung and SK Hynix had record earnings and stocks dropped 15%. It might be localized leverage craze, I am not sure it will have any impact on actual RAM production/data center construction.
I feel like I've seen this headline (followed a week later by its inversion) countless times in the last 6 months. I have little doubt this is a bubble, but also very little certainty as to when or how it will "correct".
The KOSPI is almost not worth talking about as any serious signal. It has a circuit breaker drop almost weekly (again followed in no time with an equally high rebound) and basically has come to represent how insanely the South Korean market has become pure gambling (with retail investors absurdly leveraged). Sure , it's hard to image this doesn't lead to some disaster in the long run, but these fluctuations have become par for the course.
In terms of parallel headlines we're in the 1998 :-). This was market behavior during the last 18 months of the dot com bubble, then it burst. Plan accordingly? Always hard to time these things.
And now they will complain that they need loans guarentees due to a lack of equity to finance new investments. I await the announcement of fresh price rises.
Every stick of DDR5 should come with a share, so future dividends go back to the people who financed this insanity.
I'm cautiously optimistic that this is the beginning of a much needed correction toward sobriety with regards to AI investment. The macro effects of all the money going into AI are apocalyptic. Maybe we can take some deep breaths and move forward a little smarter if the hype fest slows down a tad. And if we're lucky, eventually be able to afford RAM again.
> The macro effects of all the money going into AI are apocalyptic
The doomer discourse around AI is about as overhyped as the investors are. It's two parties getting pumped up by social media who will be disappointed it's just some new higher economic tier rather than a quick boom or bust.
It always takes twice as long for new markets to fully mature. Industries need to actually adapt technology before they see serious productivity gains (including coding). For now lots of businesses are haphazardly slapping AI on everything and early failures due to immaturity are being used to project long term negative outcomes. While chip and energy development will take even longer as unlike software it's full of the usual baggage of developing things IRL (long term high capital costs, local politics, regulatory compliance, supply chains, etc).
The doomers aren't the one investing billions, so I think they're a slightly lower cause for concern than the ones significantly reshaping the economy.
Trillions in some cases.
I'm mostly talking about incredibly environmentally destructive data centers and energy use on the current trajectory. Not even thinking about water problems, the gas and coal requirements alone are climate disasters. [1] [2]
But if it is a bubble, which many would argue is the case, an AI capex bust with it's circular financing collapse is one of, if not THE top threat to global financial stability. ~$725B combined hyperscaler capex in 2026 against roughly $25B of AI service revenue in 2025 on $250B+ of infrastructure spend. Not exactly a promising situation. [3] [4]
This is immediate-picture, I'm not talking about a singularity extinction event. Just what's actually happening right now and the trajectory of the next 4 years.
[1] https://www.publicpower.org/periodical/article/electricity-d...
[2] https://www.iea.org/reports/energy-and-ai/energy-supply-for-...
[3] https://www.tftc.io/bis-annual-report-2026-ai-bubble-circula...
[4] https://alcapitaladvisory.com/research/intelligence/ai-infra...
Hmm. I'm as big an environmentalist as anyone, but I'm pretty sceptical of the data centers as eco disasters narrative. Your sources indicate that renewables already meet over 50% of new data center demand, and the demand is predicted to drive advancements in technologies like SMRs. The water use of a data center is less than a golf course. Gas and coal cannot compete with renewables on price and speed of deployment, and increased utilization of the existing grid can help cover fixed costs which dominate the cost structure, resulting in decreased prices overall even as we increase deployment of renewables.
The facts don't support a real eco panic. IMO it's a proxy for middle class job security fears, displacing into known middle class shibboleths. It can be sincere, but it's motivated reasoning.
China managed to double energy production between 2015-2025 (including 60 nuclear reactors). On paper the west should be able to do the same, tech companies are putting huge money into solar, natural gas, and nuclear. Most of the limitations are as you mention people protesting the whole idea of new industry and energy, which is the source of most of the risk. That plus open model/Chinese competition undercutting some big US IPOs.
The long term investments in datacenters and chip manufacturing will likely coincide with with growth in demand from humanoid robots and self-driving cars, so it is likely going to happen anyway over the next decade.
It just will take longer than people expect which creates financial risk, but US capital markets are more resilient than people think.
> people protesting the whole idea of new industry and energy,
I may be venturing into aluminum hat territory but it appears that oil and gas companies and conservative organizations are pumping all sorts of FUD and misinformation into the anti-solar, anti-battery movement, period.
One of the arguments against widespread solar is that it's environmentally damaging, yet, time and time again, it's shown that solar farms increase soil moisture, improve biodiversity in plants and insects, period. If cattle or sheep are grazing on that land, the shade reduces their stress from summer heat and can also shelter them sometimes in the winter.
Again, may be complete BS, but apparently Chinese desert solar farms are increasing the moisture in the desert, making it easier for plants to grow and increasing rainfall downstream from the plant solar farms.
China has tightly integrated domestic supply and a centrally planned economy. That's why China has consistently been able to do things that are simply impossible in the west.
Why is our economy so shitty?
I had to buy an SSD and some RAM to help my son build a PC.
The SSD cost 30% more than I paid two years ago and was half the capacity (1TB). The RAM cost double what I paid two years ago, was slower, and was half the capacity (32GB).
I bought 12 sticks of 64g lrdimm for about 400.
Now each stick is likely over 240$
I hope you’re right. It does seem like we’re finally coming down off the peak of the hype cycle. I use Claude Code daily, but man I am just tired of hearing about AI. I’m tired of holding off on backing up my home server because disks are so expensive. I’m tired of HN being 50% articles about AI.
I'm tired of friends, family, coworkers, and neighbors being revealed as soulless time-optimizing automatons.
2026 has been the year "you're not just X, you're Y" creeped into sermons and birthday cards. I want off this roller coaster.
> holding off on backing up my home server because disks are so expensive
I think there are so many people in this same situation, not just with disks (and RAM), but all of the components because of bottlenecks of upgrading one without others, that there's going to be this on-going surge in demand starting from corporate and then trickling through decreasingly sized businesses and then finally the consumer market and this could keep prices higher for longer than most people are expecting.
I recently bought some second hand ex-terminal servers to run homelab stuff. I'd have preferred to get one big-ish thing to run it all, but it was more cost effective to get a handful of smaller, lower-spec devices since that's not what people are trying to get their hands on at the moment.
Or written by AI. Or commented on by AI.
I'd love a flag for "Show HN"s that indicate the author actually wrote it themselves so I can go back to being impressed by them
I think at this point writing like stream of consciousness / having imperfect grammar acts like a soft signal and I am inclined to pay it more attention.
I feel for those who genuinely liked using emdashes in their writing
Em dashes are not the problem, nobody cares about their use. Shoddy and melodramatic writing that doesn’t even make sense is the problem.
The point is that nowadays people will see anything with emdashes and assume it is slop even if it's hand written
slow down in investment will happen only when token usage plateaus, until then companies will keep pouring money into this fire pit
> move forward a little smarter
Based on everything I've seen, this is an all-out sprint to whatever the goalpost is - superintelligence, AGI, singularity. Whoever is first will win, everyone else will lose.
I don't know if it's true or not, but it seems to explain the current direction of tech and leads me to believe no CEO is going to allow his company to slow down.
At some point the "money people" are going to stop setting huge piles of money on fire.
Big tech can finance a lot of AI investments themselves, but they can't keep up the current investments just by themselves, without compromising their non-AI business.
I do not work in finance, perhaps someone here can tell me if I have the wrong impression on the situation here:
Tech giants with AI interests, hyperscalers, have used "special purpose vehicles" — shell companies — to quietly issue credit to AI companies, and these AI companies have used this line of credit to purchase/lease compute hardware/infrastructure primarily from their creditors, inflating the demand and price of said hardware.
And much of the future infrastructure has yet to be constructed, and the hardware available now will at some point become obsolete or at least decrease in collateral value.
But the credit doesn't actually come from the hyperscalers themselves, as it exceeds their actual cashflow, so it comes from investment banks and/or private investors/lenders... who actually absorb the majority of the risk then?
And the big banks are currently offloading their loans at discounted rates, while simultaneously trading in swaps against hyperscalers?
I presume the reason for the shell companies/private funding shadiness, is to keep debt off-the-record and perhaps avoid regulation / exceed risk tolerance limits.
Just how exposed are the banks and the hyperscalers in all this?
There is undoubtedly a bubble in the sense that AI is crazy overfinanced, and there's a semiconductor shortage - chip makers usually have like mid to low two digit margins for manufacturers of complex chips like NVIDIA, and single digit for ones commodities like memory.
The fact that these companies are either selling these things at multiples of their previous prices, and even then, their P/E ratios are often 10,20,40 shows there's a bidding war for these chips.
It's too much money chasing a fixed amount of product, and the only way to scale the industry is by scaling the entire supply chain, which is a long and expensive process, and certainly isn't fixed by throwing more money at companies.
If existing hardware was sold at the usual margins, all this stuff would cost a tiny fraction of the current price.
This is clearly a precarious position.
There are also circular deals and self-financing happening from the likes of Nvidia.
I think that a gpt 5.6 level model might sustain the growth. We're seeing talented users squeeze non trivial math and code out these tiers of models.
So is this good news for the companies that have taken a hit as AI stocks have climbed, and semiconductor shortages have rattled investors?
I'd be cautious describing market sell offs as good news for anyone since the fall out could be pretty bad (that's a "worst case" scenario, so far nothing like that)
There's some winners though, people dumping AI stocks are mostly buying stocks elsewhere, Apple being an obvious winner[0].
[0] https://www.theguardian.com/technology/2026/jul/28/apple-sec...
I wasn't referring to the purely financial angle. I meant that whatever news is driving this apparent valuation change could have impacts on other companies (like ones that are having to cope with the chip shortages).
I’m wondering if this is leveraged investors in KOSPI, where retail > institutional traders. More leverage = more volatility. If it actually IS a correction, I’m hoping that some of these data center projects, the ones that are REITs wearing a funny hat, can stop.
Both Samsung and SK Hynix had record earnings and stocks dropped 15%. It might be localized leverage craze, I am not sure it will have any impact on actual RAM production/data center construction.
I feel like I've seen this headline (followed a week later by its inversion) countless times in the last 6 months. I have little doubt this is a bubble, but also very little certainty as to when or how it will "correct".
The KOSPI is almost not worth talking about as any serious signal. It has a circuit breaker drop almost weekly (again followed in no time with an equally high rebound) and basically has come to represent how insanely the South Korean market has become pure gambling (with retail investors absurdly leveraged). Sure , it's hard to image this doesn't lead to some disaster in the long run, but these fluctuations have become par for the course.
In terms of parallel headlines we're in the 1998 :-). This was market behavior during the last 18 months of the dot com bubble, then it burst. Plan accordingly? Always hard to time these things.
Snap back to reality, ope, there goes gravity
And now they will complain that they need loans guarentees due to a lack of equity to finance new investments. I await the announcement of fresh price rises.
Every stick of DDR5 should come with a share, so future dividends go back to the people who financed this insanity.
> Every stick of DDR5 should come with a share, so future dividends go back to the people who financed this insanity.
This will only lead to hyperscalers getting wealthier.
If a bottle of Scotch can come with a deed to land, I'm okay with RAM coming with stocks