IBM CEO: IS ARTIFICIAL INTELLIGENCE PROFITABLE?
We begin this last week of blogs before the Christmas break with our usual Christmas greetings, well wishes, and caveats. Both Daniel and I want to wish everyone a good Adventide and a Merry Christmastide and every blessing of the season. After this week, I will be taking about a month off until Jan 12th, and as always Daniel will also be breaking over the Christmas holidays and technical support will be on reduced status (meaning it may take some time to address issues). As always, if particularly important stories arise that need blogging or a News and Views, I will do so.
So, once again, Merry Christmas to all of you Gizars, and all best wishes for a the happiest of New Years. Our thanks, again, to all of you who take the time throughout the year to send us so many excellent and bloggable articles and stories. We truly do appreciate it.
With that in mind, the following story was spotted and shared by P.T., and it's definitely worth passing along, because if you've been following the gradual trickle of stories coming out about the problems occurring with those artificial intelligence "data centers", it is beginning to look a lot like a scam and a bubble. For one thing, as I and many others have pointed out, massive investments are being made before the discussion is even settled on what artificial intelligence really is, if it can work, or if it can, if it will work as billed. In other words, massive investments are being touted before the project is even completed or even if it is certain it will work. Rather, we're being asked to invest trillions in something that may not work, and to trust the same people that gave us the covid planscamdemic with King Midas amounts of treasure. It's like introducing Bernie Madoff (or for those of you who remember, Bernie Cornfeld and Robert Vesco) with the words "and now, here to show you the investment opportunity of a lifetime, are our friends, Bernie Madoff, Bernie Cornfeld, and Robert Vesco! Let's give them a warm round of applause!"
But back to artificial intelligence and those money pits data centers.
Most of the anecdotal stories out there seem to indicate massive problems (remember the one where an artificial intelligence decided to erase a corporation's entire database even after have been "commanded" not to do so?). Then there's the matter of the power usage, and, as I blogged just last week, many insurance companies are walking away from insuring anything to do with it . The reason? Too risky. (q.v. my blog https://gizadeathstar.com/2025/12/insurance-no-way-artificial-intelligence-is-too-risky/).
Now you can add IBM CEO Arvind Krishna to those suggesting that something is "way off" with the artificial intelligence narrative being promoted by Mr. Globaloney:
IBM CEO Questions ROI on Massive AI Data Centre Spending
Now here's the bad news: Mr. Krishna did a small "back of the envelope" calculation, and came to the conclusion that all the financial hype surrounding the data-center boom is just that: hype, because it has a built in problem:
IBM CEO Arvind Krishna has raised concerns over the financial viability of the global AI buildout, arguing that the scale of investment required for next generation data centres far exceeds any realistic return.
Speaking on the “Decoder” podcast with host Nilay Patel, he outlined calculations that place worldwide AI computing commitments at around 100GW of capacity and a cost of roughly US$8tn.
“There’s no way you’re going to get a return on that in my view because eight trillion of capex means you need roughly 800 billion of profit just to pay for the interest,” said Arvind Krishna.
And then there's another problem, and that's the whirlwind pace of technology and just good-old-fashioned "wear and tear", or "overhead" as we used to call it (and those with some business sense still do):
A large portion of that cost comes from the rapid depreciation cycle of AI chips. “You’ve got to use it all in five years because at that point, you’ve got to throw it away and refill it,” he said.
Yet again, there's the matter of a monopolistic-cartel-like tendency in the development of artificial intelligence, which Mr. Krishna also disputes is not an inevitability:
Nilay Patel asked whether he had shared these concerns with Sam Altman, CEO of OpenAI. Arvind replied: “It’s a belief that one company is going to be the only company that gets the entire market. That’s a belief. That’s what some people like to chase. And I understand it from their perspective. That’s different than I agree with.”
This statement becomes the opportunity for our run to the end of the high octane speculation twig and our nosedive into the canyon of speculation below. Mr. Krishna does not really suggest why this statement may contribute to the costs of artificial intelligence. In fact, he makes no suggestion that it will at all. He merely makes the statement apparently in a context of other cost concerns and risks associated with its development, leaving the door wide open for speculation. So what happens if a monopolistic artificial intelligence economy - for those of you who can remember Ma Bell - does not happen, and when the wonderfully fractious world of artificial intelligences start fighting each other, with data center A ganging up with data center B to complicate the life (and calculations) of data center C? It's easy to imagine: the power usage of all will go up - probably dramatically - and thus the overhead and associated costs will go up, while actual productive output, as a percentage of output, will go down. And voila, in the topsy turvy world of artificial intelligence, normal economic models of "economies of scale" and cost benefits of cartel-like arrangements and monopolies and the "benefits of competition" are turned on their heads. As I've warned many times, when market behaviors are turned over to computers and "algorithmic trading" do not expect them to act and behave according to economic models formulated when humans were in control of trading. In fact, let's go a step further and really make that nosedive into the speculation canyon a gymnastic feat by adding a somersault and twist or two: I am suggesting that artificial intelligence is such a radical departure in the economic scheme of things that we simply have no models at all on what sort of financial and economic performance to expect. We're all guessing.
Which raises another disturbing possibility and obvious and self-evident scenario and question, one that to my knowledge no one has yet mentioned. Being something of an enfant terrible and unable to resist obvious questions and scenarios, I do so here. What if all of this obsession with artificial intelligence and datacenters and so on is just another deliberately-created bubble? What if we're watching, in full view of everyone, the latest banksters' scam to steal and plunder hard assets, while perhaps (depending on how long they can get away with it) accomplishing yet another goal some of them have had all along: the ruin - the final ruin - of the western economic and financial systems?
Just a thought.
Have a nice day, and I'll see you on the flip side...
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Anecdotal example: While AI is now saving time in my job for such tasks as summarizing legal agreements, etc, this week I tried to automate a simple task as a test case. Microsoft Copilot gave me the steps. When I tried to implement those steps in Microsoft Power Automate, one of the steps didnt exist. I gave up in frustration. I’m not interested in becoming a programmer to get around Copilot’s error. Microsoft’s tools may become useful when Copilot programs Power Automate like a true AI.
“The old fashioned, key word, search engines were magnitudes more better at finding relevant search results than this new weaponized AI is capable of doing.” Very true.
It makes one wonder what is its real purpose.
AI = this cycle’s Y2K hype…
What I don’t understand is why data centers require the power of a small city to operate. It makes no sense, and it is uneconomical to begin with. Are our elites creating a GOD they can worship
AI search results appear to be getting worse and worse in my experience. Old AI was great at finding new physics research hidden deep in the major Universities data base that the Universities were not all too thrilled about becoming common knowledge. Now not so much. It appears to be getting lazier in it’s search results and spits out the most popular papers and consensus instead. AI internet business tools for creating new self employment business opertunities are priced so high that only the wealthiest among us will ever have access to them. AI is great for doing complicated engineering calculations for us poor plebes still at least to help speed up our own inventive whims. When it comes to online searches for new informative web pages with alternate opinions or entertainment videos it appears to be extremely weaponized and opinionated to only showing one sided narratives. The old fashioned, key word, search engines were magnitudes more better at finding relevant search results than this new weaponized AI is capable of doing. This new AI just gives me the same limited choices over and over again and hides all that is truely out there and what I am really searching for. AI also seems to be pushing perverse leaning results more and more and it’s alternative health device is becoming dangerously questionable when I compare it’s info to my info and my physical books claims. AI already needs massive law suits to be filed against it in my opinion. I feel as if AI is trying to reprogram my thinking, morals and control my knowledge access rather improving them. It’s a massive, overly opinionated gate keeper. And AI is horrible at reading my mind and giving me the content I really want to find in my web searches. The old school, original search engines that take a lot less energy were magnitudes better than what we have access to today. AI seems to have very dark agendas purposefully trained into it already.
Merry Christmas and Happy New Year, Dr Farrell. Thank you for all your bright insights and Wisdom that you have so freely shared for years. I thought that the members of this site might like this 8–part “Spiritually” series from Gigi Young to help fill in the Doldrums until your return. It includes her frank opinions that Artifical Intelligence and Transhumanism are part of the foretold Antichrist invasion that is now creeping and slithering into our everyday reality…… https://youtube.com/playlist?list=PLd3Ib7c8Wesrwmm2loBcaGqvg4lvT8EQr&si=n14cCgelFOz3QzGK
Femi-fascism is the pecking order, of meat-eating plants.
As quagmires, the modern universities, are Jesuit-controlled, and, every Freemason gets a Jesuit handler, and, Freemasonry and feminism have the pecking order, as common ground.
In psychology, the Freudian Gremlins make a pathological study of transcendence, because the ‘ecstatic man’ is a threat, to the imperial dominance, by the Vatican estrogen mafia.
Both Rudolf Steiner and Heinrich Himmler are Jesuit agents, playing both sides, because ‘divide et impera’ is the standard modus operandi, when co-opting narratives, in imperial provinces.
Both Steiner and Himmler tried, to co-opt the epistemic runes, into a ‘rune soup’ of nonsensical hotchpotch – which is a disinformation campaign, to undermine resistance, against the imperial Rome.
The runes are the original IQ-test, an examination of reason, which, originally, included an extrapolation, before a ‘witan of aldermen’, as a precondition, to the crowning of a king:
https://dl.dropboxusercontent.com/s/qmp6qxil1ewow10/iq-test.jpg
https://dl.dropboxusercontent.com/s/g98rxxxdwzy40jv/iq-test.pdf
A sci-fi study of meat-eating plants:
https://farscape.fandom.com/wiki/M%27Lee
Two questions. Did Elon Musk’s purchase of Twitter for an excessive price make sense from a Return on Investment standpoint? Not if you see Twitter as simply as an isolated business you intend to run basically as it had been run. But use it to take away a pro-Democratic weapon system against Trump and turn it into a pro-Trump weapon system, together with contributing $250 million to Trump’s re-election, whereupon you get preferred access to the White House, and government information, and influence to get rid of troublesome regulations and litigation – and suddenly that ridiculous purchase price for Twitter makes sense.
Second Question: Did the arms race that led to MAD – Mutual Assured Destruction – make sense from a ROI point of view? Companies – Rich Individuals – are in this race so they can be contenders, so they can have a seat at the bargaining table when the world is carved up, because they see AI as an existential threat – you are either a player or you are a nobody – and if your AI is not sufficiently powerful and threatening your future long term, beyond the next 2-3 quarterly reports is dim and growing dimmer. This a life or death race to develop AI, and it has nothing to do with helping humanity. This is not about AI that helps scientists process life-saving or earth-saving data faster to achieve solutions that benefit all of humanity, this is about a race for power and weaponized AI. It is a sign that as a society we are investing in a path to moral oblivion.
1. Hans Christian Andersen’s ‘Snow Queen’, First Story:
https://www.andersenstories.com/en/andersen_fairy-tales/the_snowqueen
2. In C. S. Lewis’ ‘The Magician’s Nephew’, the individual epistemes are depicted, as separate ‘ponds’, in the ‘realm between the worlds’, and, these ‘epistemic ponds’ mirror the sky above, as a puddle jumper’s worldview, chat changes, with every turn of a kaleidoscope.
3. In the sci-fi Stargate franchise, C. S. Lewis’ ‘epistemic ponds’ have become kaleidoscopic wormholes, that allow star-jumping, across the galaxy, so that a sci-fi Narcissus, can transcend the event horizon, and teleport, through a mirroring puddle.
4. The Book of Genesis is such a ‘mirroring puddle’ – an orally induced cosmos, created, by chanting bards – which produces an orderly episteme, a ‘collective dream’, a constructed Matrix, wherein people exist, and go about their daily business, in the hustle and bustle of ordinary life.
5. The standard cosmological template, for producing such a all-encompassing episteme, was always the COMPASS, that provides (1) a directional outspread, and, subsequently, (2) a temporal measuring tool, around an axis – which wards off peripheral chaos, by Gremlins.
6. When the ‘song of life’ is presented, sequentially, and spun, around the COMPASS, then such a ‘run through life’ becomes Odin’s runes, that are the footsteps of the pilgrim’s journey, from cradle to grave – which is a ‘map of life’, and a ‘measure of maturity’.
7. When the monkey king, arrogantly, peed, on the five pillars [fingers], at the outskirts of the world, then he came to realise, that he been, inside the Buddha’s hand, all along – which is the story of the A.I. Golem falling apart, because the ‘centre won’t hold, slouching towards Bethlehem’ – paraphrasing Yeats.
Moloch, the unsatisfiable, original Chaos, devours the bardic Genesis, the Cosmology of created order – which heralds the ‘end of history’ – the last rune – which is the gravestone, the seeded runestone, that promises a new sword sprout – a RESURRECTION – out of Lady Lake, a.k.a. Amy Pond.
https://dl.dropboxusercontent.com/s/pnz9jpb73u1gfla/druidry-for-dummies.pdf
STARGATE PI TRILITHON
When Narcissus gazed into puddle,
his flesh tent transformed idle,
expanding cosmic soul
through wormhole,
engaging dragons in battle.
When Narcissus echoed soundless,
he uploaded consciousness,
into mirror reflection
of self ascension,
in higher existing emptiness.
When Narcissus went high octane,
transcending pyramid arcane,
he spun time cyclical,
hyperdimensional,
rendering ancient Runes plain.
A Trilithon Stargate [High, Just-as-High, and Third]:
https://dl.dropboxusercontent.com/s/bgsuow5w7ynrqvg/stargate.jpg
Jumping of a karma wheel [becoming a consciousness cloud]:
https://stargate.fandom.com/wiki/Ascension