I think it’s less artificial scarcity and more actual scarcity. They haven’t reduced production to strangulate supply, they’re redirecting a portion of supply because of the dramatically increased demand as AI companies rush to build more stupid datacenters in the hope of being positioned to capture a greater share of the profits, once someone figures out how any of this LLM stupidity can actually be profitable at all.

The question then is, will it? If it turns out they’re right and there’s some unforeseeable breakthrough that causes the company with the greatest compute power to make the most money, then the hardware situation will not pop. Production may increase but until some ceiling is hit on the compute power to profit graph, you can expect consumer computer prices to continue to be absurd.

I don’t think that’s going to happen, though. These LLM companies are losing money hand over fist, kept afloat only by more and more investor input. The more they expand and the more they develop their products, the more expensive it becomes to run, with no real increase in actual revenue. Sooner or later, someone’s going to call the bill due. Promises of future earnings won’t be enough, someone will pull their support. Once that starts, the whole thing is going to burn FAST. There is a huge amount of money tied up in this mess and none of the big players are going to want to be left holding the bag at the end. You can expect planned datacenters to be cancelled, which will drop hardware prices significantly as planned production suddenly needs a buyer, and you can probably expect some existing datacenters to shut down, flooding the market with second hand components.

The important thing is, the hardware market won’t move separately from the LLM Companies and their valuation. There isn’t going to be some huge spike in production that is made specifically available for the consumer market. Even if there could be a spike in production at all, the consumer market isn’t what’s most profitable right now. The current hardware situation is going to be the new normal until datacenter construction stops, and probably stay this way until and unless those facilities shut down. If the AI bubble doesn’t burst, and again I think it absolutely will, you should get used to consumer PC hardware bordering on the unattainably expensive.