🌟I believe that the biggest risk of AI capital expenditure is that chips are updated too quickly & the rate of equipment depreciation is underestimated.
This is a ticking financial time bomb keeping Wall Street awake at night. Big Tech hyperscalers are extending their depreciation schedule from 3 to 5 years to artificially boost their paper profits today.
However the reality of the hardware lifecycle completely shatters this accounting magic.
In standard accounting like basic AWS or Azure web hosting, 5 year old servers work perfectly fine. But in the frontier AI arms race, a GPU from 3 years ago like NVIDIA A100 is already obsolete for training top models.
Tech Giants must generate enough cash to pay for the next generation of hardware before the current ones are even recovered. This creates a wealth depletion capital treadmill.
I would continue to DCA into index ETF like $Vanguard S&P 500 ETF(VOO)$ to safeguard this pitfall.
@Tiger_comments @TigerStars
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