Comment by rossdavidh

am i wrong to think that this sketch isn't at all applicable (besides the surface level joke of money being passed around) to the ai bubble or ""modern banking"" as mentioned in the youtube comments? i keep seeing it referenced like it is an explanation of some crazy conspiracy thing, so i don't know if i just don't get it.

An important thing that this joke misses is that both economists now also owe federal income tax and social security tax.

The replies explain all there is to explain in that example. If each economist thinks that eating shit is worth $100 then, well, that's what it's worth.

Or understood way too well. I promise it isn't Altman that will be left destroyed or jobless if this crashes.

The chips OPEN AI is buying don't even exist, they're hypothetical chips that will potentially exist at some point in the future.

It is equivalent under scrutiny, but casually looking the books and seeing Nvida making a sale to Nvida sticks out like a sore thumb a lot more than Nvida making a sale to OpenAI. The latter is much more likely to pass as revenue.

> or $34.72/month from every current iPhone user...

As a current iPhone user, I'm not signing up for that especially if it is on top of the monthly cell service fee.

I do realize though that you were trying to provide useful context.

$650bb / ($34.72 * 12 months) = 1.56 billion users.

That's far larger than the population of the USA (unclear to me if that 650bb number is global or USA only) but by sheer scale this is assuming that these companies can collect that fee from a global customer base - including users in developing economies, EU, China, etc. and after the middleman fees are accounted for.

The comments in this thread seem to be thinking within the context of 'the poorest in their nation'. This calculation assumes collecting this fee from among 'the poorest in the world'.

Sure, 1.56bb users could also be interpreted as 'the wealthiest 20% of the world'. But the tail is especially long on this curve given how wealth is concentrated in a small percentage of the global population (1% of users have 50% of wealth).

Personally I would be astonished if LLMs percolating through the global economy doesn’t give a 50bp bump from here on out.

Even if scaling hit a wall, commoditizing what we have now would do it. We have so much scaffolding and organizational overhang with the current models, it’s crazy.

It might provide cover to lay off more than 5% of us (the LLM can create a work-like text product that, as far as upper management can tell, is indistinguishable from the real thing!), then we will have to go find jobs swinging hammers to build houses. Well, somebody’s got to do it.

That seems pretty reasonable, yes. That is like asking if putting a low-cost Ops Research specialist in every company could make a 5% difference in operations - yes it could. Making resource-efficient decisions is not something that comes naturally to humans and having a system that consistently makes high quality game-theoretic recommendations would be huge.

Bunch of tiny companies would love to hire a mathematician to optimise what they are doing to get a 5-10% improvement. Unfortunately a 5-10% improvement in a small business can't justify the cost of hiring another person, and good mathematicians with business sense and empathy are a rare commodity.

That’s the bet! last time we had that growth was for a few years during the dotcom, followed by a lost decade of growth in tech stocks

Doesn't have to go up. It's also fine if they replace other parts of the economy.

The quote is about a one-time increase in growth of 5 percentage points. Not multiple years or forever.

Or obviously it can be spread out, e.g. ~1% additional increase over 5 years.

China did it. It’s not inconceivable.

Or we’re seeing a world where corporations dwarf countries.

Apple will be around in a hundred years.

Will the USA?

No, GDP is not revenue, it's lower

Children successfully protected. Nevermind the child groomers on Roblox.

I am more afraid if AI will actually deliver what CEOs are touting. People that are now working will be unemployable and will have to pivot to something else, overcrowding these other sectors and driving wages down.

If that comes to pass you will work the same or more for less money than now.

Basically jump back to a true plutocracy since only a few people will syphon the wealth generated by AI and that wealth will give them substantial temporal power.

There has never been an industry that does that consistently (that wasn't government subsidised at least).

We got lucky with the dotcom bubble.

There's no guarantee of anything, and it's totally possible for the industry to collapse and stay that way.

Make sure you click the unmute button, imgur mutes by default it seems.

Smiling Friends

> I don't know how you can write down those numbers and come to the conclusion they sound reasonable at all.

Half this board is in the most hyped echo chamber I’ve ever seen.

> ChatGPT had 800m MAU at one report, but that's a chat interface and free. Do you really believe over half of those users are going to convert from "free" to paying $60/mo for access to the chat

Even if these things worked great for everyone, the percent of free uses who convert to paid users is low single digits per cent. For OpenAI to have any chance of breaking even in the consumer space, they need to develop an ad biz that makes around 20-25% of G does. That's a tall order in that G doesn't make good dough from search anymore as SERP page clicks are down 80% with AI summaries being good enough for most.

Just like all feemium, it’s supported by power users.

I pay for gpt myself, and my work pays for Copilot, GPT, Claude, cursor, Glean, and other enterprise tools. And we make enterprise tools on top of AI that our customers pay extra for.

Averaging the revenue over headcount isn’t the right model, anymore than it would be for RIOT games or YouTube.

I don't know a single person in my (non-tech!) life that doesn't use AI, shy of toddlers and geriatric people.

The famous MIT study (95% of AI initiatives fail, remember that one?) actually found that pretty much every worker was using AI almost daily, but used their personal accounts (hence the corporate ones not being used).

If you are brand new to the tech world, and this is your first new product cycle, the way it works is that there is a free-cool-we're-awesomely-generous phase, and then when you are hooked and they are entrenched, the real price comes to fruition. See...pretty much every tech start-up burning runway cash.

Right now they are getting us hooked, and like the dumbasses consumers are, they will become totally dependent and think it will stay this cheap.

Which is good right?

The payback period would be 5-10 years at those prices($60-$80/mo), which is pretty normal.

Isn't the 650 billion required per year, so the monthly cost is automatically 12x

Consumer spending is strong and growing, don't listen to dregs milking upvotes on the internet, people will easily come up with 4-5 hours of minimum wage pay in a month to cover the cost of the thing they use many times a day.

Why not reply than just downvote? Seems cowardly.

> They of all people in the world would know it's a bad idea to go all in, in this manner.

Or this kind of financial crash is exactly what they want. If they can drive the markets to failure, only the largest companies can hold on - and acquire more of the failing companies in the process.

Interest rates have been comically low for way too long. This alone would change a lot, favoring labor over capital and more sustainable growth.

Meaning or not, UBI doesn't work because the math doesn't work.

> bizarre

It isn't bizarre at all. Without work people devolve into playing video games and smoking pot in their mom's basement.

I remember summer vacations from school. It was great for a while, but soon I was looking forward to getting back to school.

UBI doesn’t mean people don’t work. It means work is partially decoupled from basic needs.

People would work for two reasons. One is to make extra money and afford a lifestyle beyond what UBI provides. The second is to… do things that are meaningful. If people derive meaning from work then that’s why they’ll work.

Some people will just sit around on UBI. Those are the same people who sit around today on welfare or dead end bullshit jobs that don’t really produce much value.

I’m not totally sold on UBI but there’s a lot of shallow bad arguments against it that are pretty easy to dismiss.

governments will collapse before we are at a moment where UBI is needed. Billionaires and companies hardly pay any tax and if white collar jobs die down, there is no guarantee that government will even have money to wipe their butt.

Whatever happened to crypto/blockchain ASICs

AI, obviously! A bubble doesn't mean demand vanishes overnight. There is - at current price points - much more demand than supply. That means the market can tolerate price hikes whilst keeping the accelerators busy. It seems likely that we're still just at the start of AI demand as most companies are still finding their feet with it, lots of devs still aren't using it at all, lots of business workflows that could be automated with it aren't and so on. So there is scope for raising prices a lot as the high value use cases float to the top, maybe even auctioning tokens.

Let's say tomorrow OpenAI and Anthropic have a huge down round, or whatever event people think would mark the end of the bubble. That doesn't mean suddenly nobody is using AI. It means they have to rapidly reduce burn e.g. not doing new model versions, laying off staff and reducing the comp of those that remain, hiking prices a lot, getting more serious about ads and other monetized features. They will still be selling plenty of inferencing.

In practice the action is mostly taking place out of public markets. We won't necessarily know what's happening at the most exposed companies until it's in the rear view mirror. Bubbles are a public markets phenomenon. See how "ride sharing"/taxi apps played out. Market dumping for long periods to buy market share, followed by a relatively easy transition to annual profitability without ever going public. Some investors probably got wiped along the way but we don't know who exactly or by how much.

Most likely outcome: AI bubble will deflate steadily rather than suddenly burst. Resources are diverted from training to inferencing, new features slow down, new models are weaker and more expensive than new models and the old models are turned off anyway. That sort of thing. People will call it enshittification but it'll really just be the end of aggressive dumping.

Anyone who regularly tries to rent GPUs on VPS providers knows that they often sell out. This isn't a market with lots of capacity nobody needs. In the dot.com bubble there was lots of dark fiber nobody was using. In this bubble, almost every high-end GPU is being used fully by someone.

We can use the GPUs for research (64-bit scientific compute), 3d graphics, a few other things. We programmers will reconfigure them to something useful.

At least, the GPUs that are currently plugged in. A lot of this bullshit bubble crap is because most of those GPUs (and RAM) is sitting unplugged in a warehouse, because we don't even have enough power to turn all of them on.

So if your question is how to use a GPU... I got plenty of useful non-AI related ideas. But only if we can plug them in.

I wouldn't be surprised if many of those GPUs are just e-waste, never to turn on due to lack of power.

Heating!

Can they run Crysis?

It’s too bad they’re all concentrated in buildings, having been hovered up by the billionaire class.

I would love to live in the world where everyone joins a pool for inference or training, and as such gets the open source weights and models for free.

We could call it: FOSS

cloud gaming?

> Wild speculation detached from reality which destroys personal fortunes are not "a desirable feature."

This is not the definition of a bubble, and is specifically contrary to what i said.

A good bubble, like the automobile industry in the example I linked, paves the way for a whole new economic modalit - but value was still destroyed when that bubble popped and the market corrected.

You may think its better to not have bubbles and limit the maximum economic rate of change (and you may be right), but the current system is not obviously wrong and has benefits.

The trouble is, you can only tell what was "detached from reality" after the fact. Real-world bubbles must be credible by definition, or else they would deflate smoothly rather than growing out of control and then popping suddenly when the original expectations are dashed by reality.

> It's only a "desirable feature" to the nihilistic maniacs that run the markets as it's only beneficial to them.

... and which forces do you think are the core concept of "the American experiment"?

The issue in the late-90s was all the investment created a lot of real revenue for telecoms and other companies. Even though there were a lot of shenanigans with revenue, a lot of real money was spent on fiber and tech generally.

But the real money was investment that didn’t see a return for the investor. The investments needed to have higher final consumption (such as through better productivity or through displacing other costs) to pay back the investment.

The RAM shortage is extremely temporary. It’ll last as long as it takes for new capacity to come online. RAM shortages and price spikes have happened many times before.

Eventually China will catch up in EUV fabrication and flood the market with cheap silicon. When that happens a terabyte of RAM will cost what 128gb costs now.

Cloud gaming is crap and any actual gamer will tell you that. The niche of gamers casual enough to not care about playing over network latency but serious enough to pay real money for cloud gaming is microscopic.

Even if gaming goes to the cloud, how are they going to run the massive existing library of video games on the dedicated AI inference hardware that everyone is buying right now? Seems like that pivot would require even more spending.

What amount of the gaming industry do you think will go to AI providers and not game developers?

You think we'll replace gaming and desktop computers into the cloud in the timeline of the poster above (2-4 years?)

Just not realistic.

That may be true, but all of this can be done today without the massive capex and without “AI”.