Comment by 827a
12 hours ago
Another thing to note about China: while people love pointing to their public transit as an example of a country that's done so much right, their (over)investment in this domain has led to a concerning explosion of local government debt obligations which isn't usually well-represented in their overall debt to GDP ratios many people quote. I only state that to state that things are not all the propaganda suggests it might be in China. The big question everyone is asking is, what happens after Xi. Even the most educated experts on the matter do not have an answer.
I, too, don't understand the OP's point of quickly pivoting to value extraction. Every technology we've ever invented was immediately followed by capitalists asking "how can I use this to make more money". LLMs are an extremely valuable technology. I'm not going to sit here and pretend that anyone can correctly guess exactly how much we should be investing into this right now in order to properly price how much value they'll be generating in five years. Except, its so critical to point out that the "data center capex" numbers everyone keeps quoting are, in a very real (and, sure, potentially scary) sense, quadruple-counting the same hundred-billion dollars. We're not actually spending $400B on new data centers; Oracle is spending $nnB on Nvidia, who is spending $nnB to invest in OpenAI, who is spending $nnB to invest in AMD, who Coreweave will also be spending $nnB with, who Nvidia has an $nnB investment in... and so forth. There's a ton of duplicate-accounting going on when people report these numbers.
It doesn't grab the same headlines, but I'm very strongly of the opinion that there will be more market corrections in the next 24 months, overall stock market growth will be pretty flat, and by the end of 2027 people will still be opining on whether OpenAI's $400B annual revenue justifies a trillion dollars in capex on new graphics cards. There's no catastrophic bubble burst. AGI is still only a few years away. But AI eats the world none-the-less.
[1] https://www.sciencedirect.com/science/article/abs/pii/S09275...
My point is not that value extraction wouldn't happen, my point is simply that in addition to the value extraction we also made other huge shifts in economic policy that taken together really seem to put us on a path towards an "AGI or bust" situation in the future.
Is that a bit hyperbolic? isn't this just the same as dotcom and housing bubbles before where we pivoted a bit too hard into a specific industry? maybe... but I also am not sure it would be wise to assume past results will indicate future returns with this one.
AI is appealing to the investors not because it solves human problems, but because it solves some of the problems of previous bubbles.
When we wired the world for the Internet in the 1990s, or built railways across the continent in the 1800s, we eventually reached a point where even the starriest-eyed investors could see they've covered effectively the entire addressable market. Eventually AOL ran out of new customers no matter how many CDs they mailed out, or we had connected every city of more than 50 people with steel rail, and you could hear the music was slowing down.
By dangling the AGI brass ring out there, they can keep justifying the expenditure past many points of diminishing returns, because the first thing we'll ask the Omnipotent AGI is how to earn the quadrillions spent back, with interest.
It also has the benefit of being a high-churn business. The rails laid in 1880, or the fiber pulled in 2000, were usable for decades, but in the AI bubble, the models are obsolete in months and the GPUs in years. It generates huge looking commercial numbers just to tread water.
I often wonder, what if the AGI responds with "idk man, your situation seems pretty messed up". It will be comical