[mbreese]

The question isn’t if the demand is real or not (supplies are low, so demand must exist). The question is if the demand curve has permanently shifted, or is this a short-term issue. No one builds new capacity in response to short term changes, because you’ll have difficulty recouping the capital expense.

If AI will permanently cause an increase in hard drives over the current growth curve, then WD, et al will build new capacity, increasing supply (and reducing costs). But this really isn’t something that is known at this point.

[aurareturn]

My post argues that the demand has permanently shifted.

By the way, plenty of people on HN and Reddit ask if the demand is real or not. They all think there's some collusion to keep the AI bubble going by all the companies. They don't believe AI is that useful today.

[foobarchu]

Usefulness and overvaluation are not mutually exclusive. AI is useful, but it is not a fraction as useful as these companies spending rates would have one believe.

If it is, then the world is going to lose pretty much all white collar jobs. That's not really the bright future they're selling either.

[mbreese]

> My post argues that the demand has permanently shifted

The time horizon for this is murky at best. This is something you think, but can’t know. But, you’re putting money behind it, so if you’re right, you’ll make a good profit!

But for the larger companies (like WD), over building capacity can be a big problem. They can’t plan factory expansion based on what might be a short term bubble. That’s how companies go out of business. There is plenty to suggest that you’re right, that AI will cause permanently increased demand for computing/storage resources. Because it is useful and does consume and produce a lot of new data and media.

But I’m still skeptical.

The massive increase in spending can’t be sustainable. We can’t continue to see the AI beast at this rate and still have other devices. Silicon wafer fabs can’t be built on demand and take time. SSD/HD factories take time. I think we are seeing an expansion to see who the big players will be in the next 3-5 years. Once that order has been established, then I think we will fall back to more sustainable rates of demand. This isn’t collusion, it’s just market dynamics at play in a common market. Sadly, we are all part of the same pool and so everything is expensive for all of us. At some point though, the AI money will dry up or get more expensive. Then I think we’ll see a reversion back to “normal” demand, maybe slightly elevated, but not the crazy jump we’ve seen for the past two years.

[geerlingguy]

AI can be useful today, while also being insanely overvalued, and a bubble.