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00:00:13.679Hey everybody and welcome back to another episode of the Cables2Clouds podcast Fortnightly News.
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00:00:15.839That's quite a quite a mouthful.
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00:00:24.000And uh so we're covering stories that we thought were interesting and came up in the last month.
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00:00:28.559So this is October, so these are gonna be mostly stories from uh September.
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00:00:30.960And uh that's that's how we do it.
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00:00:35.280And with me is my co-host, Katherine McNamara.
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00:00:36.479Say hi, Katherine.
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00:00:37.679Hi.
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00:00:42.320And uh actually she's gonna launch us off today.
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00:00:47.439So uh yeah, she's got some uh really interesting story about California where she lives.
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00:00:53.200Well, there's a couple stories, but uh basically they went on a flurry of uh bill signing for laws.
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00:00:58.399Uh some of it's interesting, and some of it is just uh I'll spare my opinion.
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00:01:09.519But um so the fur the first uh there was a group of bills that basically are aiming at protecting uh workers' rights uh you know against basically the AI boom and stuff like that.
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00:01:13.040I'll leave it up to the audience to decide whether this is enough or not.
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00:01:23.040But you know, basically uh a few of the uh legislations that were uh laws that were passed and signed into law, like um a couple of them are really uh good, I think.
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00:01:29.040Uh for example, one of the worries is HR, uh AI uh powered HR.
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00:01:42.719So some of the laws that were passed were um things that would require uh human decisions and and review in any AI uh, you know, AI generated disciplinary action or termination decision for employees.
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00:01:51.359Um when people, when companies decide to lay off people, they have to actually be transparent on whether it's not or not it's you know caused because of AI.
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00:02:01.599In my opinion, um I feel like a lot of companies are pretty honest about this with Wall Street, but now they have to fill out fill it out in the form that they submit to the government prior to layoffs.
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00:02:09.759Um one really cool one is protecting employee uh privacy, basically banning workplace surveillance tools by employers in bathrooms uh located in the workplace.
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00:02:11.199You may ask, what do you mean?
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00:02:12.960Like they're not setting up cameras, right?
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00:02:17.680No, they're probably not setting up cameras, but think about it this way like uh Wi-Fi telemetry.
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00:02:22.400A lot of companies monitor your cell phone locations and stuff like that.
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00:02:29.120And um we've heard horror stories about companies like writing people up because their cell phone's in the toilet too long.
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00:02:39.120Um public ed uh uh you know, higher education has to provide AI training for uh and procurement training for students, faculty, and staff now.
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00:02:55.520Uh one of the things that have been hit hard is the legal system uh with AI slop, um, both from a um you know, from people trying to be pro se, but also lawyers just basically submitting briefs and uh uh and uh submitting uh documents basically that are AI generated, not reviewing it.
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00:03:04.879So now uh they codified it in California, basically saying that if you're a lawyer or somebody submitting something to the court, you're responsible for anything you submit.
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00:03:11.120If it was uh, you know, if you're providing legal judgments, briefs, whatever else, you're responsible.
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00:03:13.919That kind of already was in play uh already.
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00:03:23.680Like we've seen sanctions being handed out by judges for people submitting like, you know, briefs and stuff with fake references, but this just kind of codifies it further.
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00:03:30.639Um as far, you know, in medical care, they've also some uh created some legislation in California regarding that.
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00:03:37.680So um doctors and licensed providers can use their own professional judgments when AI or like other clinical tools are used in patient care.
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00:03:43.759They don't have to use that, they don't have to use that uh, you know, decide uh basically trust the decision of AI.
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00:03:47.199They can make their own decision if they're a licensed professional.
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00:04:00.960Um and uh, you know, uh it also codifies that developers of clinical decision tools have to take reasonable steps to reduce their known or predicted bias uh predictable bias and how those systems are used.
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00:04:08.240Some other things that combat deep fakes as well, uh uh basically prohibiting the uh deletion of digital watermarks.
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00:04:12.080So, you know, basically allowing access to metadata and other things.
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00:04:20.240I don't know how easily they're gonna be able to enforce that one, but uh, you know, if it's involved in a deep fake in a crime and deep fakes, that would be easy.
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00:04:28.480But outside of that, I don't know how you're gonna, you know, arrest someone for using, you know, wiping exif data for some like silly picture you made.
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00:04:41.759Um and uh, you know, they're um they're making they have to also make clear like local government meetings uh have to be from a uh uh must come from like uh real people, not AI bots.
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00:04:49.439So people have to be clear in like public notes and stuff like that for uh public institutions that these are AI generated notes or not.
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00:04:56.079Um and uh they also updated the laws to protect against false impersonation and deep fakes.
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00:04:59.759Um that's that's a big thing, that's a big thing as well.
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00:05:16.480Um I still think it was pretty uh uh, you know, like they they did have some uh uh laws in place and framework in place to uh prevent against like fraud and and identity theft, but this just strengthens it by adding language that helps against deep fakes.
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00:05:29.040And then uh there's some uh another uh, you know, some other news in California is that California basically signed seven data center bills that uh, you know, kind of clamping down on the data center building uh to some degree.
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00:05:32.720So for those of you who don't live in California, but probably look at the news.
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00:05:35.600Um, California has a lot of wildfires.
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00:05:38.240We have a very and and you may ask why.
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00:05:45.279I mean, yes, we have deserty portions of California that are naturally deserts and they can be very dry climate.
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00:05:53.519But one of the bigger problems and why a lot of these wild wildfires start is because our power grids are very, very aged.
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00:06:00.959So a lot of it is just the power grids like sparking in the summer and causing a fire, and it turns into a huge fire.
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00:06:12.000So um, and unfortunately, some of the privatized entities like uh Southern California Edison and others don't want to, you know, it's it's really burdensome to pay pay to upgrade that.
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00:06:16.319So we kind of am used to fires at this point, sadly.
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00:06:23.680Um so adding a bunch of data centers onto those power grids would be pretty disastrous in a dry climate.
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00:06:27.600So um some of the bills aim to kind of circumvent that.
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00:06:45.439So if uh if if uh um if folks wanna like uh companies want to build data centers, they have to actually now, according to law, um, have to help uh pay for the upgrades to those grids uh and uh help pay, you know, offset those costs so we don't get more wildfires and other things.
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00:06:53.360They also have to uh provide you know the you know, we also have updated in the in these laws that were signed, water and efficiency disclosure rules.
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00:07:01.519So um they have to basically disclose like how much water, power, and other things they're you're they're using and how they're gonna make that a little bit more efficient.
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00:07:14.720It's basically providing transparency on that angle and you know, some due diligence to pri uh to try to uh basically uh make sure it's efficient and not just draining all the water and power around them.
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00:07:21.759But I do think that the grid upgrade part is uh uh is uh a really good part of that.
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00:07:34.720Um you know, honestly, that's that's uh that requiring the data centers to help pay for those grid upgrades is something that will probably discourage some of them from opening in California.
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00:07:48.319But to be fair, rather have them not open California and us have less wildfires than you know, or them to say, okay, if we're gonna open it there, we're gonna at least pay for some of the costs so we're not causing more wildfires.
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00:07:49.360Yeah.
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00:08:05.040The it's it's honestly it's so far past time that uh you know these people who build stuff start paying the costs of actually you know being a burden to their locations.
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00:08:06.959Uh I think.
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00:08:20.240So, you know, as an example, you can't just buy, you know, uh up until now you just the companies would just buy a plot of land, you know, pay to build the pay to build the data center there, right?
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00:08:31.439So so very temporary jobs, usually from out of state, would come in, and then they would just basically become a burden on the location on which they were built, you know, for water, for power.
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00:08:36.080Um to say this is overdue is you know, burying the lead a little bit.
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00:08:38.000Like that it's it's well overdue.
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00:08:49.120Uh it's i I I will say I'm not surprised that California is probably the first one that stepped up to actually codify this in some way, uh, just because you know they they kind of have a history of this.
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00:08:58.320And of course, like you said, the power grid is so ancient out there um anyway, and most of the wildfires are caused by by that, by exactly that.
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00:09:11.759You know, I can't rem remember how many articles I've read where you know the wildfire started because of you know transformer blowing or something falling off of the one of the um poles or or whatever, something like that, right?
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00:09:14.159So yeah, this is yeah.
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00:09:22.240I'm not a hundred percent sure on what the percentage is, but a large number of our wildfires are like are are because of the aging power grid.
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00:09:31.840Um and maybe this you know, I don't know what the power grid allocations and and climate is like in every other state.
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00:09:34.720Maybe there are other states that don't really require that.
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00:09:43.039Um maybe they have X, you know, uh more up-to-date infrastructure or more power uh yeah and capacity.
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00:09:59.840But in California, this is absolutely needed, or else it would cause it it would cause an enormous amount of problems if if uh and real cost of human life and property if they could just build wherever they want and you know, F the infrastructure.
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00:10:13.360I mean it's a even yes, of course, there are definitely other areas of the country that have better infrastructure, but I mean, even in Northern Virginia, like where they've built, you know, that has like the most, I think it's Virginia, Texas, and Flor Florida?
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00:10:19.519I forget what the third uh state is, but they have the most uh California actually is the third one, sorry.
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00:10:26.320Uh California, it's Virginia, Flor it's Virginia, Texas, and uh California have the most data centers of like the whole country.
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00:10:31.039And in all cases, I mean let's not talk about Texas's power infrastructure.
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00:10:36.639You know, next time it snows, we'll have to, you know, read another story about that.
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00:10:46.639Virginia, I guess, probably is the best in the best situation of the three, but it also I think has just an insane amount of infrastructure there already.
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00:10:50.480And I've seen uh articles from Virginia.
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00:10:53.600I have a you know family that lives there, so friends that live there that talk about it.
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00:10:55.840Uh, you know, what is it, Governor Spanberger?
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00:11:01.840I think just put out new new tax stuff uh associated with uh you know energy grid stuff, you know.
00:11:01.840 -->
00:11:04.879So it's somebody's gotta pay for all that infrastructure.
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00:11:06.000It's so why not?
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00:11:16.320Why shouldn't it be the companies that are gonna be taking the lion's share of that of that power and um essentially you know subsidize using taxpayers to subsidize it?
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00:11:20.080So yeah, I'm 100% on board with uh with this.
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00:11:22.879And you know, this isn't the only thing, right?
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00:11:25.200This is just one, this is just California doing it.
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00:11:29.519I think we're we have seen and are gonna see more of this uh in other states as well.
00:11:29.519 -->
00:11:36.480But generally, we're also seeing just a just a big pushback against data center building in general.
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00:11:38.399Like some, some just at the community level.
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00:11:41.120We've heard we've I think we've seen many stories by now.
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00:11:49.919Some some of we we even you know have reported in the last few months about communities standing up to uh data center builds build out uh companies.
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00:11:56.320I think I just read an article this morning about something, maybe Penn I think it was at somewhere in Pennsylvania or something.
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00:12:09.759There's a data center company is trying to pay every uh person who lives in this town where they want to b build a data center, $10,000 to like let them build the data, you know, to let them let the city council like let them come build a data center.
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00:12:13.120Personally, I don't think $10,000 is enough to have a data center in my backyard.
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00:12:16.240I don't I don't know what the number would be, but it wouldn't be $10,000.
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00:12:18.720Um yeah.
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00:12:25.440Yeah, uh yeah, that could be, you know, it really depends on how close your house is to it and stuff like that.
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00:12:31.360But w some of the things that we've heard is, you know, that there's white noise or noise that c uh that emanates from the city.
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00:12:46.000Yeah, that uh that you know, i i depending on how much property value is there, it could significantly drop the property value with the noise, the the uh additional cost of electricity and water, other things like that.
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00:12:48.799There's it's ten thousand dollars, you're right.
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00:12:59.039Like it, you know, if you're if your pro you know, your real estate property goes down by you know one third half, it could be ten thousand dollars could be not not even touch that.
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00:13:00.159Right.
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00:13:08.159Because I mean the think about it, even if the property value itself dropped, like who's gonna who's who's buying that house next to a data center?
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00:13:10.480Like just forget about the property value itself.
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00:13:16.399Like, let's assume you went, oh well, we went from a $300,000 house to a $250,000 house.
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00:13:19.440Who's looking to pay $250k to live next to a data center?
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00:13:20.480Like nobody, right?
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00:13:30.639Like it's not, it's so it's the point is it goes beyond liter the literal loss of of of value of the property into into can I even sell this place if I wanted to, you know.
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00:13:36.480I mean, there's a reason why they're not setting these up in the back of like in the backyard of billionaires.
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00:13:37.840Yeah, right.
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00:13:38.639Exactly.
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00:13:40.159So anyway, yeah.
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00:13:50.639So um, so we have a story, uh, let's see, uh US data center speculation is curbed, $170 billion worth of uh investment is stalled.
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00:13:57.360So utilities and regulators are adding vetting requirements, large load of tariffs to filter speculative data center projects.
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00:14:06.000So under over $170 billion of AI data center capacity has been blocked, withdrawn or stalled since 2020, so since like 2024.
00:14:06.000 -->
00:14:12.639So but that's against like almost $600 billion worth of planned spend.
00:14:12.639 -->
00:14:16.000So so I mean that's a significant amount of block, basically.
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00:14:18.000So the um this R.
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00:14:22.240That's like one sixth or one fifth.
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00:14:25.519Yeah, I mean it's a it's a significant large amount, right?
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00:14:31.279So um the utility piece, the vetting, like just the extra moratorium stuff.
00:14:31.279 -->
00:14:36.799Like North Carolina just put moratorium, like the just signed in uh moratorium on data centers, for example.
00:14:36.799 -->
00:14:42.399Like there's a lot of of blocking that's coming up uh from communities and states uh on this.
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00:14:48.399And it's not gonna be one I think that just writing a ten dollar check is gonna solve.
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00:15:09.039Um so you know, is this the question though really is is is this is this ultimately good in a way that only the largest players are gonna be aboard afford are gonna be able to overcome these hurdles and then they're gonna be the ones that are gonna have the biggest legal uh weight to throw around?
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00:15:11.759Or or you know, I guess is that good?
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00:15:27.759Because it what the un I won't say unintended, but like the side effect is that we draw drop out other competitors that can't afford to essentially spend against this kind of uh these kind of blocks that are being put up.
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00:15:31.519So I don't know I don't know if that ends up being a good thing or not, to be honest with you.
00:15:31.519 -->
00:15:36.960I think just less data centers in general is probably the right answer, uh, regardless of who's paying for them.
00:15:37.120 -->
00:15:43.600But um, I also feel like it gives some of the bigger like AI labs and stuff a doubt.
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00:15:59.519Um, you know, like I I heard that like uh yeah, I I remember like we did a news story a while ago about how OpenAI was like pulling out of some of its like uh some of its uh committed like RAM purchases and stuff, uh like uh like memory purchases and stuff like that.
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00:16:20.159And this kind of gives the like you know, like given that some of those larger AI labs, uh Frontier A labs are having a real problem with like uh still turning a profit and they're trying to focus on um going public, this might just give them the opportunity to to pull out of some of the things they already wanted to pull out too.
00:16:20.159 -->
00:16:24.879So it may not just be like, oh, only the big AI labs can uh afford it.
00:16:24.879 -->
00:16:30.320It might be actually an easy out for them to kind of pull back on some of their uh some of their predictions.
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00:16:31.279Some of their commitments.
00:16:31.440 -->
00:16:32.879Yeah, some of their commitments and predictions.
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00:16:33.840Commitments, sorry.
00:16:33.840 -->
00:16:34.240Yeah.
00:16:34.240 -->
00:16:35.039Yeah, yeah, yeah.
00:16:35.039 -->
00:16:36.799No, I mean both, both are true.
00:16:36.799 -->
00:16:40.639Um actually it's interesting because this next article goes right into that, right?
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00:17:03.039So Bain Capital is estimating that basically in order to pay for what's what's committed and and planned from a build-out perspective, the whole, I guess the AI industry, whatever you would call it, like the whatever that looks like, whoever's using these data centers needs to make about six trillion dollars in annual revenue to pay off, to pay for these investments.
00:17:03.039 -->
00:17:04.960And that's that's not one company, right?
00:17:04.960 -->
00:17:06.240That's just the industry as a whole.
00:17:06.559 -->
00:17:07.519The whole industry, yeah.
00:17:07.920 -->
00:17:10.480Has to make six not not the whole tech industry, right?
00:17:10.480 -->
00:17:13.839This is the AI data center, whatever industry itself.
00:17:14.319 -->
00:17:18.480Yeah, like the AI labs, the basic AI labs, like uh like anthropology.
00:17:18.799 -->
00:17:19.839And all the downs.
00:17:19.839 -->
00:17:21.519Yep, exactly.
00:17:21.519 -->
00:17:25.759They all have to make a coal mined total of six trillion dollars in revenue.
00:17:25.759 -->
00:17:26.880Not that's revenue.
00:17:26.880 -->
00:17:28.480Like that's that's crazy.
00:17:28.480 -->
00:17:30.240Like, I just think that's nuts.
00:17:30.960 -->
00:17:33.759Yeah, um, I I do think that we're like so.
00:17:33.759 -->
00:17:34.480It was interesting.
00:17:34.480 -->
00:17:37.519I was talking to someone about the profitability of AI a while ago.
00:17:37.519 -->
00:17:42.319Um, and you know, like the actual AI labs are not yet profitable.
00:17:42.319 -->
00:17:45.119Like, let's let's just again like focus on that.
00:17:45.119 -->
00:17:46.480They're not yet profitable.
00:17:46.480 -->
00:17:55.119There are companies that are utilizing their services that are probably that are getting a profit from this, but not currently the actual company.
00:17:55.119 -->
00:17:57.039Yeah, the AI uh labs.
00:17:57.039 -->
00:18:09.519At some point, they're gonna have to raise rates and and other things in order to uh in order to basically make that that six trillion number to basically justify all this spending.
00:18:09.519 -->
00:18:14.640They're either or they're gonna have to cut some of their capex, like and and and and a lot.
00:18:14.640 -->
00:18:17.119Basically, like uh yeah, by a lot.
00:18:17.119 -->
00:18:23.519Um and I suspect it'll and I was not this is opinion, but I suspect it'll be a balance of those two things.
00:18:23.519 -->
00:18:31.599They'll probably cut some of their capex, but they'll also probably will have to raise rates, especially if they want to make a lot of money when uh they go IPO.
00:18:32.640 -->
00:18:38.720Yeah, I mean, and this is this is Bain Capital uh that is kind of figuring this number out, right?
00:18:38.720 -->
00:18:43.680So it's not these are these these are the you know Bain Capital loans money, right?
00:18:43.680 -->
00:18:55.920This these are the the the the investors essentially saying like, hey, uh this is gonna have to take a shit ton of money to uh to be to for us to get our money back and for everybody to get their money, basically, for this whole thing to work.
00:18:55.920 -->
00:18:58.640Uh so yeah, it's gonna have to be both, right?
00:18:58.640 -->
00:19:17.200They're gonna have to I am waiting, I I have I keep hearing about more and more efficient, you know, AI inferencing and and and just generally how they're trying to make the models more um efficient without without sacrificing improvement in reasoning and and all of those things.
00:19:17.200 -->
00:19:34.160I I still don't think we're there, and I'm curious how big the where the ceiling is on it, or they could break through and and all of a sudden this whole thing um you know, does like a a Moore's law kind of reversal thing where I don't know, where where things get exponentially cheaper because of some technological breakthrough.
00:19:34.160 -->
00:19:34.640I don't know.
00:19:34.640 -->
00:19:36.400The I know we're not there yet.
00:19:36.400 -->
00:19:40.880So I'm curious to see um how this one break uh plays out.
00:19:41.519 -->
00:19:46.640Yeah, I'm not a hundred percent sure, but I I do think that w you're you're right, we're not there yet.
00:19:46.640 -->
00:19:57.119But each model like that comes out that like you know, up upgrade from the previous model is more efficient, um, is you know faster and and and getting better.
00:19:57.119 -->
00:20:02.240So there but we are very far away from uh from being able to just ask.
00:20:02.240 -->
00:20:03.759Yeah.
00:20:03.759 -->
00:20:04.400Yeah.
00:20:04.400 -->
00:20:14.000Um like like look at Astra, like they were able to get like hallucinations way down to like I think it was like 2% out of scope things down to like almost 0%.
00:20:14.000 -->
00:20:20.880So there's they are improving models, but um is it enough to offset all of this?
00:20:20.880 -->
00:20:21.680I don't know.
00:20:21.680 -->
00:20:26.160And and eventually, no matter what, they're gonna have to raise rates because they can't afford it.
00:20:26.160 -->
00:20:31.680Like even the most efficient system, they still can't afford the like OpEx and CapEx for what it's costing them.
00:20:32.400 -->
00:20:38.319Yeah, my $20 subscription is costing them, you know, five thousand dollars or something every month or something.
00:20:38.319 -->
00:20:39.279It's ridiculous.
00:20:39.599 -->
00:20:43.759Yeah, pretty much right now they're the drug dealer just giving you the taste to get you hooked.
00:20:44.160 -->
00:20:44.720Yep.
00:20:44.720 -->
00:20:51.680They will they will raise the rates and we'll be and I'm actually very interested to see what happens at that point.
00:20:51.680 -->
00:21:06.720Like I said, I my my prediction is that what we'll see is kind of like what would happen with cloud, where you'll see a a lot of repatriation, meaning like a lot of coming back, you know, taking the a what we gave to AI and doing some and doing it ourselves instead for cheaper.
00:21:06.720 -->
00:21:09.039Um button.
00:21:09.200 -->
00:21:12.559I'd really like to have stable code for cheaper at this point.
00:21:13.839 -->
00:21:14.799Stable code.
00:21:15.200 -->
00:21:15.839Yeah.
00:21:16.160 -->
00:21:19.759Um sadly, uh you know, it's a whole other discussion.
00:21:19.759 -->
00:21:39.920But you know, like unfortunately, the industry's kind of gotten like uh with the rise of vibe coding, we've kind of accepted like patchy unsecured code, and it's just kind of like we have to be okay with uh uh with um more errors, and it's like, wait, I don't I I don't want more errors.
00:21:39.920 -->
00:21:41.519I don't want to be okay with that.
00:21:41.519 -->
00:21:43.039Um, but I I digress.
00:21:43.039 -->
00:21:50.240Um I you know, we already have companies that are complaining about how vibe coding is costing more than the actual like developers.
00:21:50.240 -->
00:21:53.119It just does it faster for them than developers do, maybe.
00:21:53.119 -->
00:22:01.440But like the the whole like yearly salary of their whole like you know, of their their developer staff is like was cheaper than uh than vibe coding.
00:22:01.440 -->
00:22:10.720And um yeah, it'll it'll be interesting because this is nowhere near their final form on what the rates will end up having to settle at for them to make a profit.
00:22:11.119 -->
00:22:11.519Yeah.
00:22:11.519 -->
00:22:12.000Yeah.
00:22:12.000 -->
00:22:28.079Well, and I was I wish I was reading an article today uh about slop grenades, which is what the Shopify CEO calls uh coined after he he first started by saying like in order to not fire people, you have to prove me that the the job can't be done by AI.
00:22:28.079 -->
00:22:48.720And then a year later basically he's like okay yeah we're wasting so much productivity because all these workers are creating slop and hand and throwing it over the fence to the other to their coworkers to consume which is causing their coworkers to like spend more time than they would have consuming the slop grenade and then you know like apparently this is like a whole thing.
00:22:48.720 -->
00:22:57.839They're actually losing productivity because of AI because like the worker will just create something you know here's my AI made this go consume it.
00:22:57.839 -->
00:23:08.319And have you ever had this happen to you where a coworker gives you something that they basically slopped with with AI and like hey I need your comment on this or I need you to edit this for me or I need you to do that.
00:23:08.480 -->
00:23:10.880No, that's never happened at all to me at all.
00:23:11.119 -->
00:23:11.440No.
00:23:11.440 -->
00:23:12.559Right.
00:23:12.559 -->
00:23:20.559So I mean it sucks right like then you're spending way more time than you would have and then all they've done is taken off their plate and given it to you.
00:23:20.559 -->
00:23:26.319So now you caught the grenade basically and you get to spend all the time unslopping it.
00:23:26.319 -->
00:23:33.519So this is a thing that happens um so that's the other piece right does is the did the product activity actually get better?
00:23:33.519 -->
00:23:35.759I think the jury is still out on that one.
00:23:35.759 -->
00:23:55.440But anyway uh all right so let's let's let's move on uh the next thing is let's see oh yeah so on top of pushback against AI what we're actually finding you know kind of coming from the other side of this is that our AI data centers are hitting physical limitations.
00:23:55.680 -->
00:23:55.920Right?
00:23:56.400 -->
00:23:57.759You mean physics still apply?
00:23:58.319 -->
00:24:06.720Yep today today at least until AI figures out a way to vibe code itself a way for physics not to apply uh they currently do still apply.
00:24:06.720 -->
00:24:11.359So you can build all the data centers you want but you still have to fill them with gear that doesn't exist.
00:24:11.359 -->
00:24:20.000So um this article from the register is talking about basically that America's planning more AI data centers than chips can fill.
00:24:20.000 -->
00:24:30.079Like there's no you can build them all day but like they'll be empty husks until you start filling them with racks of gear but those gear does not exist and will not exist for quite a while.
00:24:30.079 -->
00:24:39.359So satellite imagery is putting ADI data center deployment at about 11 gigawatts uh that was in 2025 so we're really looking at more like 16, 18 now.
00:24:39.359 -->
00:24:45.839Practical capacity capped in the low 20 watt 20s of gigawatts by 2027 and then forecast it on from there.
00:24:45.839 -->
00:25:00.160Doesn't matter the big deal is that they can build these data centers and run them all day but like they cannot actually produce the silicon fast enough in Taiwan via the fabs to fill these data centers.
00:25:00.160 -->
00:25:24.079So you're creating empty buildings basically you're kind of China did this but they did it with housing back in like I don't know 10 years ago or 15 years ago now where they just created like they figured the way to solve housing problems was just to build a lot of housing um but then a lot of these houses were built using government spending and then you know did sat empty essentially because people couldn't afford it or didn't want to move there or whatever it was.
00:25:24.079 -->
00:25:28.720So you just had all these cities that were basically empty from all the but all the work was done.
00:25:28.720 -->
00:25:36.079All that all that wonderful economic activity happened and uh you know these buildings are created and then nothing.
00:25:36.079 -->
00:25:41.440So I guess we're good we're gonna do that here in the US but with data centers instead.
00:25:42.000 -->
00:25:53.200I suspect that they're probably thinking that they'll figure something out or they'll find a way around it or they've got so many uh back orders that it'll Micron or whoever else will take care of it.
00:25:53.839 -->
00:26:02.960I mean but well I would think that way if it was one governing body but really you've it's it's all these companies racing to do to get their piece, right?
00:26:02.960 -->
00:26:11.759So I think that's more likely what we're seeing is that you know however many data center companies are trying to get their contracts and trying to build their data centers.
00:26:11.839 -->
00:26:21.279Aaron Ross Powell I'm sure the big AI labs though think that they since they're a big customer they probably have like first pick as it's the smaller companies though that will probably suffer more.
00:26:21.279 -->
00:26:34.400Oh yeah no doubt they'll they'll build it and then they'll go out of business because there's no like they're not gonna get paid basically they're gonna get pulled out or yeah they're they're in line for resources behind some larger AI labs.
00:26:34.400 -->
00:27:22.640Like like if you're a little company like try you know that built a data center for your own like uh your uh for your own uh project uh or for your own AI company and you're a small company and then you're competing with open AI and anthropic for gear I mean you're yeah good luck right it's the same as if you're not you're not the hyperscalers yeah so I mean and this this is actually interesting because uh we've been thinking that one of the ways we're gonna get around frontier you know frontier paying frontier costs is that we can repatriate or or bring our AI on-prem but I mean there's gonna be a shortage problem there as well if you don't already have it like you and the the big AI labs are trying to get open models um uh regulated and and banned so you have to go through them.
00:27:22.640 -->
00:27:31.759That's basically you'd have to have a license for the government to run your own AI uh and it definitely can't be open uh open uh source AI.
00:27:32.160 -->
00:28:20.000Yep yeah so I mean there's that too right the frontier models want to own the whole pro the thing new soup to nuts they don't want competit essentially competition uh from free free models or or open source models rather um so there's that right so we'll just say AI is gonna kill us all uh so that they please regulate us we can't do it ourselves for some reason so yeah there's a that's a whole thing we covered last time as well um yeah all right let's uh this actually segues into the the memory shortage no less by the way like I was gonna say like you know not only are we dealing with silicon requirement you know Micron has been comp you know complaining that uh you know the shortages in RAM and memory are gonna continue on for uh you know and it get w even worse in 2027 to 2028.
00:28:20.240 -->
00:28:30.480So if you have a computer or a laptop sitting around with a lot of RAM in it hold on to that bad boy because you're probably not gonna be uh getting a new beefy computer for a while um with that much RAM.
00:28:30.480 -->
00:28:38.160Um just hold on to it I'm holding on to my nice little like system 76 I got before this all blew up 96 gigs of RAM.
00:28:38.160 -->
00:28:38.880I'm rich.
00:28:39.279 -->
00:28:41.359I wish I'd I wish I'd gotten one at that point.
00:28:41.359 -->
00:28:44.799Uh but who knew who knew at that point I thought I had time.
00:28:44.960 -->
00:29:07.039So oh well I actually uh got my spouse a like uh like right before all this blew up I I got uh her like a brand new like laptop like MacBook for her work with like 128 gigs of RAM and stuff like that and I'm like you know I'm like wow that that would have been that would have been like 10 grand now.
00:29:07.440 -->
00:29:24.160Yeah absolutely insane now yeah and that's another one like how are we gonna deal with that because uh you know that's that's not just memory for you know data centers that's the same memory that everybody needs for their business for their personal like yeah it's it's everything.
00:29:24.559 -->
00:29:26.240Well how how are we gonna deal with it?
00:29:26.240 -->
00:29:48.319Unfortunately there's a lot of big corporations like Bezos and like even Google that are pushing for like let's do cloud computing like let's just have you set up with like a VDI or something which is really going to upset the gamers because a lot of the gamers are like you know they buy big beefy machines so they can play their the latest game and they don't want to deal and not deal with latency or like graphical issues.
00:29:48.319 -->
00:29:56.799And uh yeah like you're competing with those big data centers or big uh companies with uh for like GPUs and stuff.
00:29:57.359 -->
00:29:58.799Yeah it's it's insane.
00:29:58.960 -->
00:30:05.200I don't I don't know what to say about it but that's I'm I'm glad that I'm not a big gamer at this point in my life.
00:30:05.200 -->
00:30:08.880Not that I don't love games but I just don't have enough time to do it.
00:30:09.440 -->
00:30:14.960Yeah I am but I I bought my computer right before this whole thing started.
00:30:14.960 -->
00:30:20.160So I think 2024 is when I bought my computer so it's still it's still doing alright.
00:30:20.160 -->
00:30:25.759I'm just gonna keep it for I think I have six I forget how much I have it 6496 gigs of RAM in this one.
00:30:25.759 -->
00:30:32.799I I bought it right before things blew up and I got lucky on that one because I didn't it's not like a new right I just that happened to be when I needed a new computer.
00:30:33.039 -->
00:30:45.359Um I got lucky my my nice 76 uh seven system 76 machine like with like that's like got ton of SSD space and like a a RAM was only like $2,500.
00:30:45.359 -->
00:30:49.039Like that would have been god awful expensive right now.
00:30:49.039 -->
00:30:53.519I went back and like looked at their site and like put the same like it was double the price.
00:30:53.680 -->
00:30:57.039It was just like I believe it it's absolutely insane.
00:30:57.039 -->
00:31:01.359So yeah good luck to everybody may may the odds ever be in your favor.
00:31:01.359 -->
00:31:08.480Alright so we got a couple off the wall uh stories and then we'll wrap it up.
00:31:08.480 -->
00:31:13.680Um so there's one that uh so here here's one that's interesting.
00:31:13.680 -->
00:31:18.880Uh it's got just gonna do it the not lightning round but not not spend as much time on these.
00:31:18.880 -->
00:31:22.160So Google launched its first orbital data center satellite.
00:31:22.160 -->
00:31:31.119So this is something like Elon and and then multiple people have been talking about this idea of essentially moving edge computing to the far, far edge of space.
00:31:31.119 -->
00:31:36.319So it launched its first suncatcher prototype to test TPUs in orbit.
00:31:36.319 -->
00:31:55.839So the idea is we pack a a satellite with essentially CPUs, hard drives, etc just for edge computing and launch it into orbit where we can uh do edge compute I mean there's not much to say here like if you're using satellite that's definitely edge.
00:31:55.839 -->
00:32:18.799Yeah that's edge gets that's the serious edge computing um it does have to get cheaper though uh it says a 200 200 per kilogram threshold is what makes it roughly comparable to terrestrial uh deployment so I don't actually know what it is right now but it's it's higher than that so definitely the costs have to be solved come down a lot before that really becomes a thing.
00:32:19.599 -->
00:32:28.079I would also think that like uh I don't see it replacing all terrestrial data centers just because of latency latency issues and stuff like that.
00:32:28.079 -->
00:32:31.839Like could you imagine your VoIP going to space and having it come back down?
00:32:32.720 -->
00:32:34.000No no no not at all.
00:32:34.799 -->
00:32:40.559It'd probably feel like charter cable or something if you were a customer you you'll you'll know what what I mean.
00:32:40.559 -->
00:32:53.839No, I mean it's an interesting concept it's cool like uh I don't have a lot of personal thoughts about that except like you know I hope it could be cheaper but obviously it's gonna be for certain use cases.
00:32:53.839 -->
00:33:04.480It it wouldn't be great for like like VoIP for example and and certain like latency sensitive sense yeah latency sensitive applications but it you know it's cool.
00:33:04.880 -->
00:33:16.640Well I like the idea of edge compute because I mean if in theory the the the idea would be that you know hey we have data going going to the satellites so we could do work on that data there at the satellite edge.
00:33:16.640 -->
00:33:33.200Remember we talked with uh Tom Coonath and he we he was talking about he was on here talking about low earth the LEO constellations and stuff right so this is this is right in line with with that idea of of a constellation of like you know compute and networking so it's an interesting idea.
00:33:34.559 -->
00:33:40.000Next one I think you should probably cover the Stanford okay yeah yeah so all right no worries.
00:33:40.240 -->
00:33:42.319So this is a really interesting idea.
00:33:42.319 -->
00:33:49.839There's a Stanford uh professor who basically is saying essentially that TCP doesn't work for AI.
00:33:49.839 -->
00:33:50.720It's it's too slow.
00:33:50.720 -->
00:34:07.200And I think that's probably to some degree accurate um because of the way that TCB works with the SINS and acts you know like the the the transactional nature uh which you know ends up being reliable um but reliable but chatty.
00:34:07.200 -->
00:34:35.679Yeah reliable but yeah but chatty and also just you know because of recovery and all of this it it ends up being really slow comparatively right the that's why we don't do VoIP with uh TCP we use it with UDP because you just slit you just throw packets all day and very quickly and the idea is that it's the same with AI inferencing or just AI workloads in general that there's so much data moving at such speed that something like TCP just doesn't meet the need.
00:34:35.679 -->
00:34:36.719This is what he's saying.
00:34:36.719 -->
00:34:37.920I don't know if that's true or not.
00:34:37.920 -->
00:34:45.360Again I don't I'm not an AI uh you know data center professional or anything but he's saying basically TCP is too slow.
00:34:45.360 -->
00:34:50.960And he's promoting a new protocol called HOMA HOMA which is I don't know anything about it.
00:34:50.960 -->
00:34:58.719But in this case basically he's saying that networks should it's a clean slate rethink of how a network should be managing the traffic congestion.
00:34:58.719 -->
00:34:59.199Right?
00:34:59.199 -->
00:35:07.519So he's working on this protocol uh and literally this he's he's saying this is a live mission his life's mission is creating this protocol.
00:35:07.519 -->
00:35:12.239So um it's he says it's message based rather than stream based.
00:35:12.239 -->
00:35:14.480I don't quite understand what that means.
00:35:14.480 -->
00:35:20.880I mean it ultimately well okay so the article mentions it's like an RPC like a remote remote procedure call.
00:35:20.880 -->
00:35:25.039So it's kind of an explicit messaging protocol.
00:35:25.039 -->
00:35:30.239So he says that uh unlike TCP it designates the receiver to manage congestion control.
00:35:30.239 -->
00:35:30.719Okay.
00:35:30.719 -->
00:35:40.800I although doesn't the receiver even in TCP manage congestion control by yeah by managing windowing?
00:35:40.800 -->
00:35:49.920So I'm kind of curious what the means by that the first packet the receiver gets has information on how much data is incoming and then it can explicitly schedule when packets should be sent.
00:35:49.920 -->
00:35:57.760Oh okay okay I see that's and he's built an algorithm that basically says send the shorter messages first, send the longer messages later.
00:35:57.760 -->
00:36:10.639So this is about uh from a congestion control perspective it means that get it get us more data faster and save the longer data you know save the longer messages you know for for later.
00:36:10.639 -->
00:36:13.599So kind of like QoS I guess this is really interesting.
00:36:13.599 -->
00:36:26.239I highly recommend I don't want to get too far into it it's it's it's it's really long actually it's not super long it's just that it gets really deep in the weeds but I wanted to more like just make everybody aware of this uh of course the links are always in the show notes.
00:36:26.239 -->
00:36:41.599I highly recommend taking reading reading through this whole article um to talk about it talks about how TCP isn't enough but it also talks about how his protocol aims to be enough so it gets really kind of deep in the weeds on how how different it is.
00:36:41.760 -->
00:37:48.559So really really interesting uh read highly recommended yeah and it'll be interesting it yeah you know some of the things that was mentioning uh I was mentioning is that it's not a general TCP replacement it's more of like uh for some workloads um so you know but it'll be interesting to see the next book TCP IP illustrated uh slash HOMA HOMA illustrated so for those of you who studied network engineering or networking in general there was this famous book called TCP IP illustrated it's actually a really good book um I have it and I think uh most of us who study for CCIEs and other things actually studied this book as well but uh uh it'll be interesting TCP IP slash IP uh slash HOMA um as the illustrated illustrated volume one yeah exactly yeah volume two or something like that um but you know TCP IP is uh older but reliable protocol uh you know in general but you know if we have to like go back like they've had several improvements over the years obviously like it's not like they just come out with a protocol that never gets changed but like uh you know it was originally developed like what 30, 40 years ago.
00:37:48.559 -->
00:37:54.400Um so like things change new protocols are added all the time as as things happen.
00:37:54.400 -->
00:38:03.039But the big thing to kind of focus on here is that even he admits that it's not a complete TCP IP replacement.
00:38:03.039 -->
00:38:16.159So uh it's it would be useful for things like data like the data center uh center AI use case, but it wouldn't necessarily be like what you're what you're playing around with on the internet, like pulling a website or something.
00:38:17.119 -->
00:38:30.320Yeah I mean the use case makes the use case itself and what he's talking about r the way it working means that like a lot of applications would would would need complete rewrites to use this type of protocol for example.
00:38:30.320 -->
00:38:44.800Like there's there's definitely it's I could definitely see where we don't want to use that as it's not a replacement for TCP except in very specific situations where you basically just have like ultra fast requirement but you still want some element of reliability.
00:38:44.800 -->
00:38:49.360I kinda basically that's kind of a mix between TCP and UDP I guess.
00:38:49.760 -->
00:38:54.719Yeah and I and when it comes to writing data center applications, we're updating those all the time anyway.
00:38:54.719 -->
00:39:03.440So it like those are like moving forward with like you know such uh velocity that adding another protocol in there actually probably wouldn't be too hard.
00:39:03.440 -->
00:39:06.960But doing it in every single like desktop app out there is be insane.
00:39:07.360 -->
00:39:08.000It's impossible.
00:39:08.000 -->
00:39:08.400Yeah.
00:39:08.719 -->
00:39:11.199I mean it wouldn't be impossible but it would just take forever.
00:39:11.199 -->
00:39:22.719Like look how long like we WPA3 came out like what almost eight nine years ago and majority of companies and personal users are still on WPA2.
00:39:22.719 -->
00:39:34.000So like just because no one's gonna go and upgrade their actual hardware and stuff then that's hardware but like um you know like even software stacks it just takes forever to adopt something new.
00:39:34.000 -->
00:40:23.679Yep absolutely and last story because I I know we have to go back to a uh back to real world um Microsoft uh yeah ends exchange web services in exchange online so basically being able to like not have the hardware client and being able to like log into the like OWA and like check your emails uh that is uh officially ended on uh October 1st but you can temporarily reenable if you're an admin of the exchange online until April 1st 2027 uh after that no exceptions I actually don't really like that because uh but you know like one of the things if if folks have been paying attention to the industry is a lot of people are moving away from Windows since Windows 11 has become w you know pretty terrible and has had a lot of hiccups along the way.
00:40:23.679 -->
00:40:38.159So people have migrated to you know Mac OS which is fine there's a ex there's a uh Outlook client for that but a loss also a lot of people have migrated to Linux and there is no you know Outlook client for it.
00:40:38.159 -->
00:40:52.320If you want to run Outlook uh in Linux you pretty much are having to run it in like a VM or like or Wine or some some sort of application that ports over like Microsoft uh like Windows uh applications.
00:40:52.320 -->
00:41:05.679So this is more going like this will probably affect people who like checking it on the web and not having an installed app, which is probably a smaller portion, but definitely going to hit Linux desktop users harder.
00:41:06.000 -->
00:41:06.239Yeah.
00:41:06.239 -->
00:41:15.599I mean it also hits any Windows user or and just any user that used the for you know had a legitimate case to use the exchange web client.
00:41:15.599 -->
00:41:26.800Like um you know I'm thinking of a hundred different you know situations where you want to be able to check your work email but you know you're you can't connect to your work VPN for some reason or or something like that, right?
00:41:26.800 -->
00:41:37.920Where you just need to be able to get to a SaaS version of your uh email without having to to go through jump through other hoops to be able to use the hard the um ethic client.
00:41:37.920 -->
00:41:40.239So but yeah it's it's interesting.
00:41:40.239 -->
00:41:44.480I mean basically they just basically said you know we can't support it.
00:41:44.480 -->
00:41:48.559It's too you know too full of holes and we can't keep it running.
00:41:48.559 -->
00:41:55.360So yeah I am I am interested to see what people have to say about it.
00:41:55.360 -->
00:42:04.400Like what's the you know like I mean people are just gonna have to deal with it I guess until unless Microsoft changes its mind but I I I don't think it plans to change its mind.
00:42:04.400 -->
00:42:07.119Um and what what will come out as a result?
00:42:07.119 -->
00:42:08.880Like what what what will be the successor?
00:42:08.880 -->
00:42:13.920Will it just be only the client or like what you know where are they going to draw the line?
00:42:15.199 -->
00:42:19.679Yeah or more people will migrate off of Office uh off of exchange.
00:42:19.679 -->
00:42:38.480Um you know like Microsoft kind of coming down heavy is why um why a lot of European governments are migrating off of Windows and a Azure and stuff because you know there's been some news stories in recent months where you know Microsoft is unhappy with the government's decision and cuts them off of Azure or something along those lines.
00:42:38.480 -->
00:42:50.559And so um this is just another decision that s I could see some major companies but mostly governments being like nah we're we're good now.
00:42:51.519 -->
00:43:06.719Yeah any any big change like this I mean you you risk lose uh shaking loose customers that either were you know wholly dependent on that feature you're res you're sunsetting or otherwise you know that's just like the last snail in the coffin for them, right?
00:43:06.719 -->
00:43:10.800Like they were already looking at other stuff and this is just enough to push them off.
00:43:10.800 -->
00:43:15.280So I am curious to see what the backlash if any uh will be from with Microsoft.
00:43:15.280 -->
00:43:16.400All right.
00:43:16.400 -->
00:43:21.119Uh and I think we are out of time for this month.
00:43:21.119 -->
00:43:27.039So um all as usual like I said all the episode notes will include all the links to all the articles.
00:43:27.039 -->
00:43:30.719Highly recommend people check out the ones that they find interesting.
00:43:30.719 -->
00:43:33.920Uh I personally highly recommend checking out the one on that new protocol.
00:43:33.920 -->
00:43:36.239It's very interesting to us at network engineers.
00:43:36.239 -->
00:43:44.719And um yeah we'll see you next month uh we'll see you next month for another episode of the uh Cable Clouds podcast Fortnightly news
