alt Hacker NewsFWIW it is entirely possible to square the notion that small models will still be hosted on cloud hardware with the idea that the data centre buildout will end in tears.
Many analysts (and Microsoft) think even now that if everything committed gets built there will be considerable oversupply and there is not the revenue to pay for it.
If small models do continue to improve in unusual ways (I think there are limits) then the marginal need for cloud AI compute could fall precipitously beyond current estimates. The marginal need for consumer AI could almost totally collapse if someone makes good progress on very small reasoning and tool-calling models (which is a modestly big if)
The possibility of the data centre boom resembling the Chinese real estate bubble is not inconsiderable.
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When the glut of GPU arrives I'm sure humanity will find a good use for all that excess compute, like finally getting back to signing monkey pictures and excreting endless hash based pyramid schemes.
So far everyone seems to be consistently GPU-poor, despite the huge buildout, and usage keeps going up drastically. I don't know what would make usage drop.
Every time they've made smarter models we've wanted the smarter ones, and local models runnable on typical hardware are still very far behind in speed and intelligence (as neat as they are)