Hardware overhang refers to a situation where large quantities of computing hardware can be diverted to running powerful AI systems as soon as the software is developed.
In the context of AI forecasting, hardware overhang refers to a situation where enough computing hardware to run many powerful AI systems already exists by the time the software to run such systems is developed. If such hardware is repurposed to AI, this would mean that as soon as one powerful AI system exists, probably a large number of them do. This might amplify the impact of the arrival of human-level AI.
The alternative to a hardware overhang is for software sufficient for powerful AI to be developed before the hardware to run it has become cheap. In that case, we might instead expect to see the first powerful AI be built when it is very expensive, and therefore continues to be rare.