Used vs. New GPU For Your Servers: How to Choose

The demand for GPUs is spiking, leaving new GPUs less accessible across the board. 

Some customers will have to pay a premium for GPUs, and others will be boxed out of the market entirely. More and more customers are forced to rely on the GPU resale market for relief. 

The resale market can deliver for all types of customers with cost-effective hardware deals. Some customers will look to the new GPU market first, but it’s always a good idea to see if a hardware reseller can meet business needs at a discounted price. 

Know Your Needs Inside and Out

Before you jump right into a purchase, take inventory of what you actually need and could choosing between a Used vs. New GPU improve your profitability. 

If you’re planning a new data center construction, you picked a tricky time to do so. Consider looking into cloud services that could offload your data center needs. 

Like Apple’s approach with AI, organizations can outsource workloads to third-party cloud vendors that would run on third-party GPU servers. This turns your expensive data center project into a projectable subscription cost.

If you’re already invested in on-premise data centers, then you should evaluate your data center needs to determine if new or used hardware is the best fit for your operation.  

AI Data Centers and Used GPUs

If you’re running AI workloads like LLMs or deep learning models, the latest GPUs are a starting requirement. The latest hardware is designed with AI workloads in mind, and companies will be at a massive disadvantage if they’re trying to scale AI capacity while using old hardware.

Even used GPUs that are only a year or two old are outclassed by the latest models. The higher price tag is worth it for anyone trying to compete with the AI market hyperscalers. Manufacturers are selling out IT hardware stock months and year in advance, so you need to lock in agreements with manufacturers if you want to see the hardware before the end of 2027.   

When Used Beats New

The primary benefit to used GPU servers is the lower purchase price. This sometimes comes at the cost of efficiency. 

If a used bulk GPU purchase saves you a few thousand dollars but your data center operations costs go up 15%, the short term savings aren’t worth it. Make sure any used hardware won’t put a strain on your infrastructure before making a used GPU purchase.  

Beyond the finances, there are broader reasons that make used GPU hardware more appealing. 

You Need Immediate Deployment

New GPU hardware is very hard to come by – manufacturers like NVIDIA and Dell have sold out most of their stock. They’ve even made deals to sell units that are still being manufactured and won’t be ready for months.    

Used listings are typically tied to tested hardware that’s sitting in the seller’s warehouse. They can ship it as soon as the money comes though. Used GPU purchases can help customers avoid supply chain issues. 

You Have Expertise in Optimization and Maintenance

Familiarity with your equipment is critical for data center management, so using familiar gear has some benefits. Administrators know how to manage this hardware, what its limits are, and when to perform equipment maintenance. If you don’t need to scale as fast as possible, then you can focus on stability with known equipment – even if it’s a generation or two behind. 

Your Power and Cooling System Can’t Handle New Equipment

AI training and operations brings strain and spikes to data centers, so older power systems are set up for failure. Newer GPUs use far more power than older ones. 

Depending on when you built your data center, you may need more than new GPUs. Without sufficient power or cooling, the GPUs won’t run at full capacity or you’ll put excessive strain on the other components of your data center.  

To avoid outages, companies can match the data center capacity and architecture with the hardware they’re running. 

Reliability of Used vs. Refurbished GPUs

If you’re going to purchase used over refurbished, make sure you have the in-house expertise to handle any issues that could come up with the gear. Refurbished GPUs are the best bet for smaller organizations without specialized staff to assess the quality of the hardware. 

When Are New GPUs Necessary 

Large scale data center operators will always prefer the latest GPU models, but there’s a fine line between preferred and required. 

New Data Centers Focused on AI

If you’re using outdated GPUs to train LLMs, your data center will technically operate just fine. Your business won’t.

The AI marketplace is defined by the cutting edge of capacity, complexity, and scale. If you don’t have the latest gear in your data centers, your competition will out scale you and offer better services. The challenge is finding these GPUs in stock.

Like DRAM, the GPU market is flooded with demand and the manufacturers are content to keep production relatively steady. Technology resellers often have current generation GPUs in stock, but you can only buy what’s on their shelves. You’ll need to get creative to break into this market if you don’t have long-term agreements (LTAs) in place.   

Hardware Capability Is Inhibiting Growth

If you’re running up against hardware limitations of an older data center, it’s time for a major upgrade. If you buy used GPUs and other server hardware, you may be in the same position in a few years. With new hardware, you can manage your hardware refresh cycle without worry about falling behind.

Once your data center can make use of the latest hardware, you’ll improve your power usage effectiveness, meaning more of your power goes to the computing processes instead of the building operations.

You Need OEM Warranties

The most reliable IT hardware strategy is to plan ahead with refresh cycles and protect your hardware investment with warranties. 

If your data center assets, like GPUs or DRAM, have a 5-year lifecycle, then a manufacturer offering a 5-year warranty ensures you will have functional equipment for the entire period. If certain assets fail prematurely, the manufacturer will restock the asset for you. 

Data center hardware is hard to get your hands on these days. Purchasing hardware with a manufacturer warranty ensures you won’t get stuck with damaged GPUs and no options to replace them. 

Conclusion

Between supply shortages, skyrocketing demand from AI workloads, and manufacturers selling hardware that isn’t even built yet, IT hardware procurement is extremely difficult to navigate.

AI and cloud-focused businesses should shell out money to enter LTAs for new GPUs, while companies that need stability more than scale can rely on the used GPU market. Ultimately, data center operations and procurement experts will give you the best idea on what your company should purchase for its data centers. Whether you purchase new or used, you need to keep one thing in mind: the data center architecture needs to match the hardware. If your racks are too dense or your cooling center can’t handle a usage spike, you’ll face outages, asset destruction, and worse.

Make sure procurement and architecture teams are on the same page to keep operations safe and efficient.