By skyforbes One of the talking points in the argument that we are in an AI bubble is that NVDA chips supposedly have a shorter useful life than NVDA claims. I don’t understand this argument. Even assuming that NVDA chips have a shorter useful life, why would that signal an AI bubble? Wouldn’t the fact that NVDA is turning out faster and more economical chips that make older chips obsolete mean that NVDA will have a greatly extended period of high demand for its next generation of chips? And on the buy side, wouldn’t the fact that new chips coming out are better and cheaper argue for expansion of the market for so services (services doing more and costing less)?
I can see a problem for an overleveraged data center that doesn’t have cash flow to meet debt service and upgrade — but isn’t that a limited problem and not an indication of a bubble?
Can anyone explain why chip obsolescence is supposed to be a sign that the AI trade is at risk?