Comment by bix6
4 days ago
“The AI capital influx means that mega-projects no longer seem outlandishly expensive. This is good for the world!”
Is it? This whole piece just reads of mega funds and giga corps throwing ridiculous cash for pay to win. Nothing new there.
We can’t train more people? I didn’t know Universities were suddenly producing waaaay less talent and that intelligence fell off a cliff.
Things have gone parabolic! It’s giga mega VC time!! Adios early stage, we’re doing $200M Series Seed pre revenue! Mission aligned! Giga power law!
This is just M2 expansion and wealth concentration. Plus a total disregard for 99% of employees. The 1000000x engineer can just do everyone else’s job and the gigachad VCs will back them from seed to exit (who even exits anymore, just hyper scale your way to Google a la Windsurf)!
> This is just M2 expansion and wealth concentration.
I just want to point that there's no scientific law that says those two must move together.
A government very often needs to print money, and it's important to keep in mind that there's no physical requirement that this money immediately must go to rich people. A government can decide to send it to poor people exactly just as easily as to rich. All the laws forbidding that are of the legal kind.
All true of course, with a clarification: even if all the newly printed money is put in the hands of the poor, the resultant inflation raises the prices of hard assets which are overwhelmingly held by the rich (fueling wealth inequality)
You can say that they fail to dilute the value of hard assets, yes. So they don't really "punish" the extra-rich. But they only inflate prices by the amount of money you print, you can't make the poor poorer by giving them money.
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There is something immoral about a company saying "we are going to spend $100bn this year on building a LLM"
The icing on the cake is when all their competitors say "so will we".
I'm really struggling with seeing how this is immoral.
10 years ago, Apple was the largest company in the world by market capitalization, its market cap was around $479.069 billion.
How have we gotten to a point in just a decade where multiple companies are dropping annual numbers that are in the realm of "the market cap of the worlds biggest companies" on these things?
Have we solved all (any of) the other problems out there already?
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they're all a bit immoral, like how Hollywood made it big by avoiding patents, how YouTube got its mammoth exit via widespread copyright infringement and now LLMs gather up the skills of people it pays nothing to and tries to sell.
However we could also argue that most things in human society are less moral than moral (e.g. cars, supermarkets, etc).
But we can also argue that dropping some hundreds of millions in VC capital is less immoral than other activities, such as holding that money in liquid assets.
* Glares at Apple cosplaying Smaug *
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I learned this in elementary school. When 10 kids join forces to bully one kid, that is immoral. Same with companies and VC money trying to corner a market.
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Just from the environmental perspective is pretty immoral, the energy being consumed it's ridiculous and now every company is in an arms race making it all worse.
AI will change the balance of power removing a vital counter balance against the negatives of capitalism.
It will take the power away from the workers, such that there will be no power left for people to make demands.
We can hope it’ll be positive, but we aren’t even involved in its creation and the incentives are there to ensure it isn’t.
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In general, modern English uses “this is immoral” to mean “I don’t like this”. It’s a language quirk. It’s good that you’re asking the whys to get somewhere but I might as well just get to it.
“Immoral”, “should not exist”, “late-stage capitalism” are tribal affiliation chants intended to mark one’s identity.
E.g. I go to the Emirates and sing “We’re Arrrrrsenal! We’re by far the greatest time the world has ever seen”. And the point is to signal that I’m an Arsenal fan, a gooner. If someone were to ask “why are you the greatest team?” I wouldn’t be able to answer except with another chant (just like these users) because I’m just chanting for my team. The words aren’t really meaningful on their own.
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The numbers are insane to me, relative to other "real" industries. E.g., making some inferences from a recent Economist article, the entire world's nuclear industry "only" generates something like $30bn/year revenue (https://archive.is/WYfIG).
If each French inhabitant consumes 500€ electricity per year and 73% is nuclear, that already makes 24bn€, $28bn.
All this time complaining about companies not investing in research and development for future prosperity and now when they actually do so it is suddenly outright immoral?
> complaining about companies not investing in research and development
Glancing over the last few decades of tax returns it looks like they are claiming a lot of tax credits for R&D, so much so that if someone had a closer look they might find some Fraud, Waste or Abuse.
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Burning a pile of money is not investing in research.
I think the author should've clarified that this is purely a conversation about the platform plays. There will be 100's of thousands of companies on the application layer, and mini-platform plays that will have your run-of-the-mill new grad or 1x engineer.
Everything else is just executives doing a bit of dance for their investors ala "We won't need employees anymore!"
Optimistic take. What's the say the application layer won't be dominated by the big players as they hoover up anything remotely promising. Leaving the crumbs on the mini-platform .. ala Apple App Store ...
Sorry, I'm pessimistic as recent experience is one of hyper concentration of ideas, capital, talent, everything.
O great so just the most important companies that are inherently monopolistic gate keepers. It's worked out so well with all these current platforms totally not restricting access and abusing everyone else with rent seeking and other anti competitive behaviors.
Ironically, there's no M2 expansion going on since Covid days and M2 to GDP is back to what it was pre-Covid and overall didn't even increase much at all even since GFC. It's only 1.5x of what it was at the bottom in 1997 when cost of capital was much higher than today. I think this concern is misplaced.
M2 is the wrong statistic for sure, but the thrust of GP's comment is accurate, IMO. Fed intervention has not remotely been removed from the economy. The "big beautiful bill" probably just amounts to another round of it (fiscal excess will lead to a crisis which will force a monetary bailout).
We should be using some kind of weighted total of all the things that get treated as money.
When a company makes a deal in exchange for shares or something, those shares are being used as money and must be included in any currency-neutral calculation of the money supply. However, most shares don't flow like money. You also have cryptos, which flow more than shares but less than government bonds and cash. It could be that the total of all money has expanded, even as the US dollar specifically stabilizes and slightly contracts.
Yeah I just threw out M2 because it's easily understood / harped on but it's certainly much more complicated than that.
>We can’t train more people? I didn’t know Universities were suddenly producing waaaay less talent and that intelligence fell off a cliff.
University enrolment is actually set to sharply decline. It's called the Demographic Cliff: https://www.highereddive.com/news/demographic-cliff-colleges...
Off topic, but: Supply and demand says that, if university enrollment drops sharply, the price of a university education should go down. That sounds like good news to me.
University enrollment doesn't drop sharply evenly across all universities. The lowest-desirability universities will go bust while the Ivy League continues to have hyper-competitive admissions and yearly tuition increases that outpace inflation.
In a homo economicus world. They will jack the prices up for the remaining few.
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Except it won't because a degree is a gate and people will pay whatever is demanded of them for it. Numbers go up never down.
If AI is important, speeding up development of it is good.
> We can’t train more people?
Of course people are being trained at Universities. Outside of The Matrix, it takes a few years for that to complete.
Speed of development of something important isn't necessarily good. Humans are bad at absorbing a lot of change at once and it takes time to recognize and mitigate second-order effects. There's plenty of benefit to the systems that disruptors operate within (society) to not moving as fast as possible... of course since our economic systems don't factor in externalities, we've instead turned all of society into a commons.
People said the same thing about the printing press. When you look across human history it's tough to make a moral case that slowing down technology development was ever a net positive. We can't reliably predict or prevent the problems anyway and it's pointless to even try. Just move forward and deal with the actual problems (which are usually different from the expected problems) as they arise.
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Nuclear weapons were/are important, speeding up the development of nuclear weapons doesn't seem like it would be good, though.
That's literally what the Manhattan Project was!
I think that was good, but not everyone agrees.
if you're targetting $200M, then I guess each round is to hire one or two engineers for one year lol
I'm curious if you're one of these AI engineers getting 100m, do you quibble over the health insurance? I mean at that point you can fully fund any operation you need and whatever long term care you need for 50 years easily.
"Yes sorry I'm turning down your $100M because I need 2 parking spots for my sidecar" :p
I agree with your sentiment.
> This is just M2 expansion
What is "M2 expansion"?
What does M2 expansion mean?
https://en.wikipedia.org/wiki/Money_supply
I.e. "printing money"
Thank you
Bubbles do what bubbles do.
Fwiw universities are producing less talent. They have been getting hammered with budget shortfalls thanks to Trump cutting research funding and this manifests into programs accepting fewer students and professors being able to fund fewer students.
They are producing less talent as industry defines it. It is because a large percentage of the people who could teach them anything useful (to industry) are actually employed by industry, and don't want to work in academia.
Another complication is academia simply does not have the resources to remotely compete with the likes of Google, OpenAI, Anthropic, xAI, etc.
Sure but that's new as of a few months. The university I went to still accepts the same number of students per year as it has for many years. Those numbers don't change much without significant land / program expansion which is certainly being cut now.
> mega funds and giga corps throwing ridiculous cash for pay to win
> This is just M2 expansion and wealth concentration
I actually think "throwing ridiculous cash" _reduces_ the wealth concentration, particularly if a chunk of it is developer talent bidding war. This is money that had been concentrated, being distributed. These over-paid developers pay for goods or services from other people (and pay income taxes!). Money spent on datacenters also ends up paying people building and maintaining the data-centers, people working in the chip and server component factories, people developing those chips, etc etc. Perhaps a big chunk ends up with Jensen Huang and investors in NVidia, but still, much is spent on the rest of the economy along the way.
I don't feel bad about rich companies and people blowing their money on expensive stuff, that distributing the wealth. Be more worried of wealthy companies/people who are very efficient with their spending ...
> I actually think "throwing ridiculous cash" _reduces_ the wealth concentration, particularly if a chunk of it is developer talent bidding war.
Very few developers are benefiting from this "talent bidding war". Many more developers are being let go as companies decide to plow more of their money into GPUs instead of paying developers.
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Wealth is power. Power decides what we use our collective time and resources on. The more concentrated power is, the less we use that time and resources on things that improves the life of the average person, and more on things that matter to the few with wealth.
By far the biggest concentration of power is the US federal government.
Any power centers outside that decentralizes power.
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I’m going to assume that this is just some edgy post, but you should read up on the relationship between wealth inequality and corruption, social mobility, and similar factors.
Advocating for increased concentration of power is quite a take.
Assuming you're not just a troll, it doesn't seem very reasonable to be against something simply because many people support it.
Not trolling. It has served me better than most heuristics.
If there is something subjective and if you cannot find a critique of it, it’s usually a super power to assume the opposite is true barring obvious exceptions.
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> simply because opposite of this is the prevailing normie zeitgeist
We'd love to be able to have reasoned discussions about economics and the pros and cons of wealth concentration vs redistribution here. But this is not the way to do it, and the comment led to an entirely predictable flamewar. Please don't do this on HN, and please make an effort to observe the guidelines, as you've been asked to do before.
https://news.ycombinator.com/newsguidelines.html
Can you write off everything popular with the normie zeitgeist?
I would say if there is a decline in society, the normies are wrong. And if there's steady improvement in quality of life, then the normie zeitgeist is correct. But there's always a delay in these things, at least a generation.
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Man it's hard to read stuff like this on the internet. When has wealth concentration ever been a good thing? Wealth is power and power leads to abuse almost universally.
https://en.wikipedia.org/wiki/Political_economy
Capitalism is made possible by the people. If it does not serve them well, it should be fixed or abolished.
You underestimate the resources the subset of society who it actually benefits can, will, and do use to distort views on how wide that benefit actually is.
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