AI, Computer Scientists, Data Center Builds, and Facebook's Subsea Cable Waterworth

The emerging computer scientist consensus is that large language models are a dead end and will never achieve general artificial intelligence. It is interesting in this respect that Microsoft just cancelled two gigawatts worth of data center projects. Analysts at TD Cowen, an investment management firm, argue that a data center glut is developing due to too many AI-driven projects. Their view is supported by senior management in the cloud and data center industries. "Earlier this week, Alibaba Group Holding Ltd. Chairman Joe Tsai warned of a potential bubble in data center construction, saying new projects may exceed demand for AI services." Right now the main demand is for AI writing and data summary services via chatbots. It takes a special kind of obtuseness to think these services merit hundreds of billions or even trillions of dollars in data centers, GPUs, and servers. 

The herd phenomenon where copy cats pile into a sector due to investor excitement, but without a solid understanding of the technology, creates these investment bubbles. At particular risk are dozens of new AI-centric data centre projects announced over the last six months not to mention a few subsea cables like Facebook's bizarre Waterworth cable. I may be wrong on this last point because the very smart Yann LeCun heads META's AI research efforts. But unless he has something very clever under wraps, it is hard to justify the Waterworth cable given its routing. The cable looks more like a monument to hubris than anything else.

Map of Facebook's Fibre Optic Subsea Cable Waterworth



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