Today we’re sharing something a little different in your feed — an episode from our colleagues at Here’s Why, Bloomberg’s weekly show that answers one big question in under 10 minutes, explaining the ideas shaping our world. This episode looks at a story right at the heart of the tech world: the massive investments in AI data centers, and the hidden costs that come with them. If you’d like to hear more episodes like this one, you can follow Here’s Why wherever you get your podcasts: Apple Podcasts: https://podcasts.apple.com/gb/podcast/heres-why/id1479610314 Spotify: https://open.spotify.com/show/6dajvfHUjw7HaFot0BoNNu Bloomberg: https://www.bloomberg.com/podcasts/series/heres-why See omnystudio.com/listener for privacy information.
Full Episode
Hi, this is Caroline Hyde from Bloomberg Tech. Today, we're sharing something a little different in your feed, an episode from our colleagues at Here's Why, Bloomberg's weekly show that answers one big question in under 10 minutes. Host Stephen Carroll is joined by our Bloomberg Tech Eurobanker, Tom McKenzie, to dive into a story that's right at the heart of the tech world.
the massive investments in AI data centres and the hidden costs that come with them. If you'd like to hear more episodes of Here's Why, you'll find a link to the podcast feed in the show notes. Hope you enjoy.
I'm Stephen Carroll and this is Here's Why, where we take one news story and explain it in just a few minutes with our experts here at Bloomberg.
It's 1030 p.m. in this AI party. It started 9 p.m. and that party goes to 4 a.m. And the reality is like, look, this is going to be a two to three year left in this bull cycle for tech. The tech sector is very strong because artificial intelligence is really a qualitative leap in the kind of technology that we've had over the last several decades.
You're seeing an exponential growth of adoption and use of AI. The number of applications that are going to be using these AI is also growing.
Everyone has an opinion on where the AI frenzy is going next. But while optimism is rampant about the technology's potential, more questions are now being asked about AI's running costs.
We are putting mostly chips, silicon, into these data centers that have a lifespan of perhaps four years. Those chips, they depreciate very quickly. Even NVIDIA, there's a new chip every 18 months and it's 10 times as powerful as the earlier ones. The thing with the rally this year is that almost every investor knows it's all going to turn into pumpkins and mice at midnight.
Only as Buffett would say, no one in the room has a clock.
Even with bumper results and bullish revenue forecasts, here's why AI costs still worry investors. Tom McKenzie, who hosts Bloomberg Tech Europe on Bloomberg Television, joins me now for more. Tom, the investor Michael Burry of Big Short fame is among those who's worried about these future costs of AI and data centres in particular. What's the concern?
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