Thu
Jul 2 2026
08:14 am
By: bizgrrl
AI Bubble Burst: Meta Admits 'Excess Compute Capacity.
Meta has to monetize this excess capacity - and that's why Meta is forced to enter the cloud computing business, directly competing with Microsoft, Google, and Amazon, and also neocloud companies.
Meta, like SpaceX, looks to turn excess AI compute into cash
Meta’s decision to sell off excess compute comes weeks after SpaceX, via xAI, announced similar plans. In early May, SpaceX signed a deal with Anthropic to buy out all of the compute capacity at SpaceX’s Colossus 1 data center. SpaceX has signed similar leases since with Google and Reflection AI.
Could this mean there is not the demand for data centers as expected?
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Demand for data centers
Demand for data centers must be driven by consumers and that demand simply isn't there. Computer programmers aren't the intellectual force they were under the COBAL and fortran guys. As I recall, coding errors had to be found and fixed line by line. They had to be a cohesive plan in order for the system to operate. Now, programmers have no clear goals and the software is more like a patchwork quilt full of holes that a cohesive solution to a commonly recognized need. There are simply no standards anymore and as a consequence, getting any of this stuffr to work is more trouble than the task you are doing by hand. AI is only as smart as the user, and programmers are designing AI with learning disabilities.
Demand is falling. Corporations are killing it. We don't need, or want, data centers here. They are a waste of resources, and until the operating philosophy behind AI changes. Right now there is no clear purpose. What are they making better?