It’s a simple supply-demand issue that took 30 years to arrive and will take at least 5 years to solve unless the AI bubble pops a lot sooner to stop the hoarding by big tech cloud companies, Chinese state-backed investment and others who are betting it all on black like a has-been Hollywood actor at a Caesars roulette table on a Saturday night.
The US never penalized US tech companies for shuttering the dozen memory plants since the 1990s so they just relied on the Koreans and a few others. Now Korea can’t keep up and the US tech companies have been caught with their pants down.
While these kinds of people are very bright within their areas of expertise, leading to huge earnings, they’re not bright on most business topics and eventually the market shifts and they’re struggling.
This is where the tech companies founded in the 1970s-2000s are right now. Their original ideas are long in the tooth at best and about to be disrupted, if not already disrupted. The cash cows are looking a little fatigued. They’re looking for a lifeboat to keep the good times going, thinking its AI, just now realizing their industry screwed itself with all of the offshoring but its too late now. They have to once again “fake it until they make it”.
They just hope the people providing the capital don’t start asking about when the market will accept the higher price points so they can break even. That’s a question nobody acknowledges today when it’s asked because they know it could sink the boat if it becomes a hot topic of the month on CNBC and Bloomberg.
It’s a simple supply-demand issue that took 30 years to arrive and will take at least 5 years to solve unless the AI bubble pops a lot sooner to stop the hoarding by big tech cloud companies, Chinese state-backed investment and others who are betting it all on black like a has-been Hollywood actor at a Caesars roulette table on a Saturday night. The US never penalized US tech companies for shuttering the dozen memory plants since the 1990s so they just relied on the Koreans and a few others. Now Korea can’t keep up and the US tech companies have been caught with their pants down. While these kinds of people are very bright within their areas of expertise, leading to huge earnings, they’re not bright on most business topics and eventually the market shifts and they’re struggling.
This is where the tech companies founded in the 1970s-2000s are right now. Their original ideas are long in the tooth at best and about to be disrupted, if not already disrupted. The cash cows are looking a little fatigued. They’re looking for a lifeboat to keep the good times going, thinking its AI, just now realizing their industry screwed itself with all of the offshoring but its too late now. They have to once again “fake it until they make it”.
They just hope the people providing the capital don’t start asking about when the market will accept the higher price points so they can break even. That’s a question nobody acknowledges today when it’s asked because they know it could sink the boat if it becomes a hot topic of the month on CNBC and Bloomberg.