Comment by 0xbadcafebee
2 days ago
I just realized that other industries are way larger than AI. Assuming they capture the entire advertising market, only $390 Billion was spent in the US last year. Compare that to health care, where 4.3 Trillion was spent in the US last year, or commercial banking's revenue of 1.5 Trillion, commercial real estate's 1.5 Trillion, gasoline stations' 1.10 Trillion, etc. What's amazing is, despite the fact that AI isn't making much money, is taking on considerable debt, and isn't even assured to be all that useful, one third of the stock market is now just AI crap. The economy is going to collapse because of a small, brand-new industry. This... shouldn't be possible.
Stock market isn't the economy. If wages are largely stock comp at high valuation they get clawed back in a crash. Infrastructure spend is massive but at 70-80% margins for nvidia real cost to economy is cut by that much, aside from the datacenter and power build out which is definitely a big portion.
It could unwind cleanly as long as we don't let it infect the banking system too much, which it has started somewhat doing with more debt financed deals instead of equity financed and probably book values making it into bank balance sheets.
Truck driver wages are $180-280 billion annually and seems like something that will get replaced and should justify $1 trillion of the spend or more, economically. I think Tesla for instance only spends single digit billions in R&D most years though, so the spending may not be going to where the most immediate solid/lasting economic impacts will come from. I'm not sure what Waymo's spend is.
I don't know about those other things, but driverless trucking isn't going to happen within the next 50 years at least. Besides all the logistical challenges and risks to businesses throughout the supply chain, you're talking about 3.6 million American truck-driver jobs. There is little else that politicians love more than saving jobs, especially blue collar, and that's a helluva lot of jobs. To put it in perspective, the TSA is basically a jobs program that costs 12 billion to employ only 58,000 people who don't do anything useful. Politicians'll do whatever it takes to keep those 3.6 million jobs. Add on the fact that truckers can and do organize, and it doesn't take many of them to shut down shipping and transportation. The trucking industry is also reticent to upgrade or spend more money; they won't even invest in electric trucks with drivers. And there's a wide variety of trucks out there with complex routes that won't be mapped, so only a few major highways will be covered, meaning you still need a driver. There will be pilot programs but that's it.
> they won't even invest in electric trucks with drivers.
Do any of these make sense economically right now? The Tesla one is mainly being piloted hauling potato chips for Pepsico because they are so light weight. Few of the Tesla Semi numbers from the presentation seemed to come true (and the part about having autonomous follower convoys working in ~2017...), and you had the guy from Nikola rolling it down a hill and needing a presidential pardon.
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> This... shouldn't be possible.
1. Quite a lot of companies are not publicly traded, and therefore are not reflected in the stock market. AI companies have an incentive to be publicly traded because it's all venture-capital stuff.
2. Technology in general is always going to be over-weight anyway because these are companies that tend towards "growth" (re-investing profits into future expansion, offering to buy back stocks at a higher price as a means of compensating investors, etc.) rather than "value" (compensating investors by paying out an explicit cash dividend on shares). This tends to push their P/E multiples higher.
3. Publicly traded companies, and thus stocks, generally are valued based on speculation about future cash flows, not according to current holdings.
4. The companies that you have to add up in order to come to a figure like "one third of the stock market", are doing a lot of things outside of AI. People still play video games, and they still do GPU-accelerated data analysis with conventional techniques. People still want their computer to include an operating system, and still use their social media to talk to accounts that they know are operated by people they know in real life.
5. The term "AI" is now used as if it exclusively referred to LLMs, but other AI systems have existed for a long time and have been actually accomplishing real things in the economy.
> The economy is going to collapse
There are a great many people out there who have predicted a hundred or so out of the last seven recessions. You don't know this, and there are many reasons to doubt it.
Suppose some anti-AI deity snaps its fingers tomorrow and every LLM simply spontaneously ceases to function. It's not as if we've lost the knowledge of how to do things without LLMs. It's not as if the things we created without LLMs disappear, or anything else. We at worst, at a very conservative, scare-mongering estimate revert to that level; and things were pretty tolerable at that level. And technologies that are not LLMs have also advanced since the release of ChatGPT.
Yeah this is ridiculous when you consider all the dorps who quail "Fix the existing problems of the world first!!!" when things like space exploration and other scientific endeavors without an immediate benefit are discussed. Where are they now?
Now compare on free cash flow
AI market is all the jobs that could be replaced by AI in the future. People paying 20USD/month for ChatGPT is a drop in the bucket.
I know right it's like people are buying future value rather than based on current revenues or something.
How long did Apple keep going up following the smartphone revolution?
Build a system which can read MRI images, now AI took over the whole MRI Analysis sector.
Let AI diagnose the avg cold, now AI took over the household / local doctor for 90% of cases.
Use AI for support, now AI took over the call-center business.
AI can already code. It might not be perfect, it might not be always good but NO ONE assumed that 2025 some matrix multiplication can mimick another human being so well that you can write with it and it will produce working code at all.
thats the hype, thats the market of ai.
And in parallel we get robotic too. Only possible because of this AI thing. Because robotic with ML is so much better than whatever we had before. Now you can talk to a robot, the robot can move, the robot can plan actions. All of these robots use some type of ML in the background. Segment Anything is possible because of AI.
Thats the reason why this 'AI crap' is so hyped.
Why is there a shortage of radiologists today if image categorization was solved 15 years ago?
Have you ever talked to AI Support?
It’s easy to name a random industry and assume you’ll automate it with a few clicks. It’s harder to actually do it.
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I don't understand why people think that AI "being able to code" has any bearing on anything else that humans do
Because AI doesn't mean 'AI' it means massive compute, massive amount of data and machine learning.
All of that pushes everything forward: LLMs and any other architecture to LLMs, GenAI for images, sound and video, movement for robotics, image feature detection.
Segment Anything 2 was a breakthrough in image segmentation, for example.
The latest Google Weather model is also a breakthrough.
All progress in robotics is ML driven.
I don't think any investor thinks that OpenAI will achieve AGI with an LLM. Its Data + Compute -> Some Architecture -> AI/ML Model.
if it will become the golden model which will be capable of everything or a thousand expert models or the Model of Expert model, we don't know yet.