If the AI bubble pops, will GPU prices increase or decrease?

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One-Pain6799@reddit

It will likely continue the same way; after all, the parallel processing logic of GPUs contributes to many different sectors.

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bgravato@reddit

According to experts in stocks technical analysis, one of two things can happen: it can go up or it can go down!

/s

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lemondrops9@reddit

you forgot sideways... which is the worst if you like the swing trades.

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bgravato@reddit

you're not zooming in enough... sideways is just a series of alternated ups and downs.

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srigi@reddit

You or "experts in stocks technical analysis" are mistaken - there is always also the third option: it will go to the right.

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ag789@reddit

if LocalLLM become a blowout success, then that everyone will need to upgrade their PCs to run the localLLMs, then you can try to figure out what is the size of that bubble lol

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Adventurous-Paper566@reddit

Pas besoin de bulle, le simple fait que l'IA existe fait que la demande restera élevée pendant un long moment.

Pour le RAM on peut espérer voir de nouvelles usines apparaître dans les 10 ans, mais pour les GPU nVidia restera le roi.

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If a thing like a bubble burst happens, the companies who bought hardware can become unable to generate revenue. This makes them unable to pay the installments for hardware already bought and for hardware ordered for the future.

The first circumstance means they have to sell assets to gather money. The assets they sell are hardware. The market get flooded with server RAM and GPUs. Their price tanks.

The second circumstance means that their suppliers like Nvidia and Micron (which have in turn suppliers to pay) have revenues cancelled. They need to find new customers. Because there are not other serious customers, they have to flood the market with underpriced hardware.

This is what would happen if a real bubble burst happens. But I doubt it will happen.

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nickless07@reddit

Right after the Smartphone bubble pops...
They already bought the whole production that the fabs will produce this year. Even if there is something that will pop there is no going back anymore.

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lemondrops9@reddit

Well AI won't go away but the investor hype train will.

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alphatrad@reddit

GPU prices? Likely increase. Inference is incredibly expensive.

And.... I don't think this thing is going to pop. It should. So should have the housing market by now... and somehow it's still chugging a long. How is America as a whole still chugging along? No idea.

We live in upside down world. So I don't see these prices coming down. Also not when you have Sam Altman running around talking about how AI is going to be a utility. If me and you aren't paying for it, they're trying to convince the government to pay for it.

Right now, I am looking at the hardware market like the housing market. Waiting for prices to drop is a fools errand.

Got friends who have been waiting for falling prices since 2023. Hasn't happened. They're still renters.

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mohelgamal@reddit

The reason everything is high in America is because we have a really overheated economy with lots of inflation.

The dollar value went down against everything, including price of human labor. So now everybody is making more money, but they go to buy stuff with it and it buys them the same amount they used to get before everything got expensive.

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MelodicRecognition7@reddit

you have everything high because you have an idiotic system when some idiot could buy an expensive item, use it for a month, then decide that he does not like it and return it back to the seller, and seller has to bear the loss of reselling the used item at much lower cost.

https://www.google.com/search?q=site%3Areddit.com+inurl%3A%22localllama%22+should+i+%22return+it%22

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alphatrad@reddit

YUP well we imported a zillion people to hide the cost of labor and create wage suppression, otherwise we might have noticed the inflation sooner. Gotta fund the boomers retirement.

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FatheredPuma81@reddit

That's not quite how a bubble being popped works/happens... it's a panic and loss in investor confidence which means less are willing to lend money and suddenly companies sitting on monstrous losses funded entirely by investors like OpenAI would be in serious trouble and would either need to quickly start making profit or go bust.

Anyways my TLDR is that GPU prices would go down. Why? The companies/branches that fail will be liquidated and the ones that survive will be either much leaner (reducing compute needs) or much more expensive (reducing demand thus reducing compute needs). Less compute needs means less of a reason to buy a GPU. But it's also still possible that the current insane backlog of cards would prevent this and those cards would feed those in other fields that need GPUs.

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SnooPaintings8639@reddit

🌈🐻

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ag789@reddit

there is only one scenario where the AI bubble will appear to pop, is a devastating global economic and properties and bank crash and bank run everywhere, the economic scare must so huge that all companies stop manufacturing everything, including mobile phones because of no demand, unemployment raises to 30% worldwide, and there must be a global economic depression

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No-Mountain3817@reddit

Demand will not going to die down.

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ttkciar@reddit

I'm honestly not sure, but it will depend somewhat on whether the bubble bursting coincides with an AI Winter or not.

Both imply a reduction in funding, but AI Winter further implies a change in people's attitudes towards AI. In an AI Winter, people's attitudes toward AI sour, and both investment in AI and demand for AI decrease.

If the bubble bursts but there is no AI Winter, then demand for LLM services will continue to be high, and people/companies who find themselves priced out of the new service tiers may seek to purchase GPUs themselves for on-prem LLM deployment.

Whether that demand continues to outstrip supply depends on whether LLM service companies have to pause their procurement, or if they get acquired by other companies. Procurement freezes are common in acquisitions, but they don't always happen, so it's a coin-flip.

If procurements do pause, then GPU vendors should aggressively go after prospective customers who might be considering on-prem LLM, including customers who are on the fence about it. Salespeople are very good at persuading prospective customers to buy if they're even half-thinking about buying anyway, so demand could be very high.

If procurements don't pause, then of course we'll still be in the same scarcity we're in now, but worse, because more people will be vying for GPUs to use on-prem.

If there is an AI Winter (and I suspect there will, though it might not happen until a year after the bubble bursts) then fewer people will be seeking GPUs, and LLM services will be less in demand, so once the hardware manufacturers/vendors pivot from datacenter sales to consumer sales we should be drowning in cheap GPUs.

Most likely scenario, IMO: Bubble bursts in 2026 or 2027, GPUs get even more scarce, and a year or two later AI Winter falls.

Second most likely scenario: AI Winter falls in 2027, and bubble bursts within a month or two following it.

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sn2006gy@reddit

Increase...

AI is here to stay, whether the big players fail doesn't matter - they would go bankrupt and rebalance anyway - not like 10 million B200s would show up on ebay.

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segmond@reddit

AI bubble might burst financially, but inference demand will never go down. You will not see cheaper GPUs. Not going to happen.

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RegularRecipe6175@reddit

No. Even assuming a pop, there is pent up long term demand, which will cause hoarding.

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anak541@reddit

Well, if the bubble bursts those datacenters won't get built and those GPUs will reach the market, which should make the price go down

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RegularRecipe6175@reddit

If it does pop, don't think for a second Uncle Sam won't do whatever is necessary to bail them out, including buying up data centers and gpus with taxpayer money. Just like they did for the banks.

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Bulky-Priority6824@reddit

Good luck using those data center gpus and home lol. Nothing is popping. You'll know that to be true when either a claude sub is $49.99 a mo or usage gets reduced drastically.

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inrea1time@reddit

There is no bubble, the is happening and there is not enough compute period. The hyperscalers committed hundreds of billions of $$$ to the build out. It's possible that supply will catch up with demand within 2-3 years and prices will go down, but don't count your pennies yet. There is also a chance that some output would be redirected because of data center construction delays. If you see any price drops or stabilization right now its only because the hoarding slowed down.

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arthor@reddit

the demand for ram is going to drive massive cap ex to build out more facility to meet the needs.

if suddenly that need is gone from hyper scalers, then smaller the demand would be on consumer side.

there is definitely a future where ram gets cheaper. but a future where the AI bubble pops is one where you might not be able to afford anything anyways.

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Sooperooser@reddit

Cap ex is still directed towards hyperscale infrastructure hardware and not consumer products. So the digital peasants will still fight over limited supply and prices gonna stay high. Even if the cloud AI bubble pops, there are still very capable local models out there and people will want to run them. AI is here to stay and people need the hardware for it.

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a_beautiful_rhind@reddit

How? A lot of it is probably inflation too. If the bubble pops they won't increase production. You want GPUs to run LLM's, right? Even if no new models released from tomorrow you'd still probably buy one.

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ProfessionalSpend589@reddit

flood the market with extra GPUs decreasing the prices?

There are no extra consumer GPUs on the market to decrease prices in the short term. They’ll have to stop producing server GPUs which you can’t use in a consumer motherboard.

Last week the news was that as AI companies switch from training LLMs to inference they’ll need more CPUs. Server class CPUs. So production is shifting towards server CPUs which… you can’t run on a consumer motherboard.

This week? The news is that some kind of chemical producing facility was hit which could lead to headaches for chip producing companies: https://www.tomshardware.com/tech-industry/complex-that-supplies-70-percent-of-global-critical-pcb-base-targeted-in-iranian-strike-attack-could-fracture-the-already-disrupted-electronics-supply-chain

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jerkosaur@reddit

I think cards will pivot to try to cram as many tensors in there and they will release new cards and the AI models will run more than 2x faster and that will be enough to get a shortage.

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Metalmaxm@reddit

Everything and anything related to servers, will be dumbed on market, like a mega wave. Sellers would be pricing them self to rock bottom - to much server hardware. That includes server grade gpu's, ram.

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MachineZer0@reddit

I think GPU prices will go up. The bubble popping really means valuations get more sensible. It’ll get hard to get further rounds of investment. It forces companies to shift from growth mindset to profitability. Prices will go up fast because the runway is getting short without fresh capital. It doesn’t mean demand goes down.

Just look at the internet bubble popping in 2000. I’d venture to say there is 1000x more demand for internet today. Back then Google, Yahoo and eBay had to get profitable quick. Less so Amazon, even with stock price down they hemorrhaged more money for years on purpose.

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nullmove@reddit

"AI is a bubble" is something I see everywhere in reddit. Is this some kind of hopium/copium, or actually grounded in serious analysis?

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Terminator857@reddit

AI bubble won't pop. It might happen that some companies slow down like mostly-closed-AI. At some point , 2+ years?, supply will catch up to demand, and then there might be a significant drop in prices. New production in 2028: https://www.google.com/search?q=What+new+production+is+starting+in+2028+to+affect+memory+supply%3F

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mohelgamal@reddit

There is good news and bad news

The bad news: The prices of GPUs will not change whether an Ai bubble pop or not. The demand for AI is there and is insanely high, and it opened a Pandora’s box when it comes to AI processing massive amounts of data anyway.

The bubble is really a valuation bubble of what Open AI and co are valued at. Chances are they will all IPO, get massively inflated stock prices the will crash, but they won’t go out of business. They will be like Microsoft in the dot-com bubble, they went down severely then went up slowly to much higher levels because the demand for the service was true and is still needed.

The good news is that eventually the chip prices will eventually go way down. That is going to be the result of massive expansion in chip production capacity, as well as better chip tech that will give individual customers extremely powerful chips just buying the lowest tier of what is being made for AI. So ultimately will be a good thing but will take a few years to get there.

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