Crashed demand after one of the big AI labs (probably Anthropic because they focus way too hard on expensive frontier models) become insolvent and every trader panic sells tech stocks.
Even if that doesn't happen, a lot of non AI companies like Oracle that invested too much on data centers will fail and have to sell their hardware. Big models are getting too expensive for a lot of smaller businesses so demand migrates to less GPU hungry ones. That means Oracle might be left with excess capacity.
And we also get more supply because high margins attract investment. 7 years is a realistic time frame to build new DRAM fabs and packaging, it might take even less if governments treat it as a security issue.
Even if that doesn't happen, a lot of non AI companies like Oracle that invested too much on data centers will fail and have to sell their hardware. Big models are getting too expensive for a lot of smaller businesses so demand migrates to less GPU hungry ones. That means Oracle might be left with excess capacity.
And we also get more supply because high margins attract investment. 7 years is a realistic time frame to build new DRAM fabs and packaging, it might take even less if governments treat it as a security issue.