Discussing the GPU market...again...

 So...time to discuss the GPU market....again. This article will be a bit more on the political side though, and needs to be discussed. So....JayZTwoCents nailed it again in discussing how the current AI market is...in fact, a bubble. There's been a lot of rumblings over this over the past few days, and I largely agree. Even more concerning, now there are reports saying that a lot of GPUs are just sitting unused in warehouses since Nvidia and other sellers like those in the RAM industry are pressuring buyers to buy stuff they dont need because if they don't, they fear not being able to get their hands on them. This is leading to a lot of buyers buying excessive amounts of GPUs...and then storing them in warehouses unused. And I just wanna say, freaking called it.

Seriously, Im no econ expert with markets and investing, but even I could see this from a mile away. The AI bubble has been a sight to behold. And not in a good way. It seems like collective short term insanity. People are convinced that AI is the next big thing and they gotta to out and BUY BUY BUY or be left behind. Even normal consumers are doing it, and it just comes off as insane to me. Suddenly people who have $200-300 GPUs are going out buying 9070 XTs at $800+ fearing that if they dont BUY NOW they wont be able to later and that things will get worse. but again, this whole thing is FOMO. It's like the crypto stuff again, or the covid shortage, and people keep talking like YOU DONT KNOW THAT ITS JUST GONNA GET WORSE, BUY NOW! And...my own opinion? This is unsustainable.

Here's the thing. Companies exist to make money. And for as damning as nvidia looks in that above article, they're making money hand over fist over this. it's like they created a new gold rush and they're making a killing selling the shovels. As for the other companies, this looks more and more iffy.

Here's the thing. It's like AI has been forced on us for a good 3-4 years now. I started noticing it right after I upgraded my PC last time, how we suddenly need NPUs on CPUs even though I dont care about AI and have next to no use case for it. Sure I could use it to improve my writing, but what's the point in doing that? I do it for the love of the game, and even professionally, there are ethical concerns with just having AI write for you. Like do you even own your own work?

But still, these companies were convinced to CREATE a need in the populace. When that largely failed, they pivoted to businesses, who were hooked with promises of eliminating jobs and improving productivity. And while AI does have great promise of doing that, even I, the anti work guy, know that there are some obvious limitations. Also, AI companies are basically being forced to give away their product very cheaply or even free to get consumers hooked because...again, those consumers (businesses) also need to make money. AI is only worth it if it's cheaper than human labor. And given its obvious drawbacks it often isn't better than human labor at the jobs. Maybe it'll get there eventually, but we're not there yet.

Still, major companies were all pressured by each other and competition to buy into AI models. open AI was the early one but lots of people not use claude. I tend to use gemini these days given its integrated right into google searches if i need it. And heres the thing. How are they making money on this? I mean, again, a lot of users are only using it because it IS free and being forced onto the websites we use anyway. It seems like the idea is that if we get people hooked on AI now, they wont be able to live without it later, and then they can charge subscriptions for it. But if they do that, guess what, a lot of the casual users are OUT and it's only a minority of businesses and power users who will insist on using it all the time.

So with that said, let's discuss what the AI bubble is, it's Nvidia and other companies pressuring buyers to BUY now to build data centers nobody wants for a product that no one really wants, and there's serious questions of whether it will be profitable. Because, again, I cant see people wanting to PAY for AI, outside of some businesses seeking to automate work flows, and even that will happen less than we think it will IMO, given how fallible AI really is and how unreliable it gets when humans arent actually constantly double checking everything it does. Like seriously, it isnt human, it will do weird stuff, it'll get lazy, hallucinate, fall into weird logic loops that cause it to quickly become corrupt and stuff. it cant really be trusted with anything. it can be a nice tool, but its usefulness is overstated. And again, I say this as the anti work guy. 

So...with that said...how the hell are the companies supposed to make money off of this? They're buying tons of GPUs at inflated costs, building warehouses no one wants, for a product no one wants, and doesn't have a clear path to profitability. And heres the reality, we're in a huge debt bubble. These companies took on huge debt to push this product and get it up and running, believing they can make up the money later. They'll go into debt now...hoping to become profitable in a few years, but if they don't, guess what, they'll likely go bankrupt. And we're likely gonna see a lot of companies doing that. Because again, this is a gold rush with nvidia selling the shovels.

And a lot of people, including jayz above, are saying when it pops it's gonna be painful for all of us. because this AI bubble is the only thing keeping the economy going. Trump's policies sure AF arent helping. The economy is growing DESPITE trump's policies, and AI is literally the core reason. All of this money going back and forth is artificially increasing GDP and when that bubble pops, BOOM, we're back in 2008 again. And people are gonna be laid off from their jobs, their retirements will be kaput if they're in the stock market, it's gonna be a bad time. 

Honestly, at this point though, and I know these takes are harsh, I'm to the point of saying this market correction is needed. I hope, if this is a bubble, it pops before 2028 because that will MASSIVELY help the democrats. Hell, it might actually propel progressive candidates to the forefront, since economic populism will be on the menu again. Maybe the public WILL want an andrew yang or AOC if this happens. 

And as far as GPUs...well....if you didnt buy into the hysteria, 2028ish might finally be the time to upgrade our 2022-2023 era parts. Imagine if we suddenly see say, RDNA4 chips (since AMD will likely drop first, Nvidia will artificially keep prices high as long as possible) at RDNA2 pricing. Like, imagine THIS product stack:

RX 9060 XT 8 GB- $200

RX 9060 XT 16 GB- $250

RX 9070 GRE- $350

RX 9070- $450

RX 9070 XT- $500

....or something like this. I'm kinda basing that on RDNA2 pricing vaguely, kinda like how we had:

 RX 6600- $200

RX 6650 XT- $250

RX 6700 XT- $350

RX 6800- $480

RX 6850 XT- $600

I mean, it can happen. If we have a bubble burst, we could get something like that. Happened once, it can happen again, especially if we suddenly got tons of GPUs sitting in a warehouse that they have to sell. 

Nvidia ones likely will still be at MSRP, they'll push $250 for a 5050, $300 for a 5060, etc., and it will be a bad value but some idiots will buy them anyway, just like they're buying them now at the ridiculous inflated prices where a 5060 Ti 16 GB costs as much as a 9070 XT. Im mostly betting on AMD being cheaper at this point. 

I know a lot of people will think this is a ridiculous fantasy and "theyll never let us have good hardware again and it will get worse", but that's what they want you to think. They want the consumer to BUY NOW, fearing that in the future it will get even more expensive. That's kind of part of the bubble. it's a pump and dump scheme driven by FOMO and short term thinking. Right now the prices are being pumped, and then the bubble will deflate, and we'll get the inevitable "dump." I'm waiting for the dump. 

Now, some might fear they cant afford an upgrade if they lose their job in the impending aftermath of this bubble bursting. That IS a legitimate concern. But still, if you CAN swing it, yeah, this is the play IMO. Dont buy now, i mean, you're insane if you buy now. Wait for this crap to burst and the prices to drop like crazy, THEN upgrade cheaply if you can afford it. Buying right now is like buying in 2021 when GTX 1050 tis were $400. Dont do that, you'll regret it.

Anyway, that's my take on the situation. And you know what? When the bubble does pop, give AMD, and if you can stomach the downsides, even intel, your business. Nvidia deserves to be punished for doing this crap IMO. And it's so stupid, they do all of this abusive behavior, and then 90% of people buy them anyway. Just...dont. There are other companies out there, especially if you're a gamer. AMD being the best one besides nvidia. Even Intel is half decent, although I kinda got reservations for reasons mentioned previously. Still, as we saw in my article thinking about it rationally, I tend to exaggerate intel's problems to some degree and have a bias against them as a result. But yeah, that's where I stand.