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Correct me if I'm wrong but if Chinese can produce the same quality at %99 discount, then the supposed $500B investment is actually worth $5B. Isn't that the ki
by mrtksn 2y ago
Correct me if I'm wrong but if Chinese can produce the same quality at %99 discount, then the supposed $500B investment is actually worth $5B. Isn't that the kind wrong investment that can break nations?
Edit: Just to clarify, I don't imply that this is public money to be spent. It will commission $500B worth of human and material resources for 5 years that can be much more productive if used for something else - i.e. high speed rail network instead of a machine that Chinese built for $5B.
- dtquad 2y agoSigh, I don't understand why they had to do the $500 billion announcement with the president. So many people now wrongly think Trump just gave OpenAI $500 billion of the taxpayers' money.
- mrtksn 2y agoI don't say that at all. Money spent on BS still sucks resources, no matter who spends that money. They are not going to make the GPU's from 500 billion dollar banknotes, they will pay people $500B to work on this stuff which means people won't be working on other stuff that can actually produce value worth more than the $500B. I guess the power plants are salvageable.
- itsoktocry 2y agoDeepseek didn't train the model on sheets of paper, there are still infrastructure costs.
- mrtksn 2y agoWhich are reportedly over %90 lower.
- thomquaid 2y agoBy that logic all money is waste. The money isnt destroyed when it is spent. It is transferred into someone else's bank account only. This process repeats recursively until taxation returns all money back to the treasury to be spent again. And out of this process of money shuffling: entire nations full of power plants!
- mrtksn 2y agoMoney is just IOUs, it means for some reason not specified on the banknote you are owed services. If in a society a small group of people are owed all the services they can indeed commission all those people. If your rich spend all their money on building pyramids you end up with pyramids instead of something else. They could have chosen to make irrigation systems and have a productive output that makes the whole society more prosperous. Either way the workers get their money, on the Pyramid option their money ends up buying much less food though.
- whatever1 2y agoMoney can be destroyed with inflation.
- brookst 2y agoIt means he’ll knock down regulatory barriers and mess with competitors because his brand is associated with it. It was a smart poltical move by OpenAI.
- angoragoats 2y agoUntil the regime is toppled, then it will look very short-sighted and stupid.
- brookst 2y agoNah, then OpenAI gets to play the “IDK why he took credit, there’s no public money and he did nothing” card. It’s smart on their part.
- angoragoats 2y agoThat would be an obvious lie, since they set up in front of cameras in the actual White House to publicly discuss it.
- itsoktocry 2y ago$500 billion is $500 billion. If new technology means we can get more for a dollar spent, then $500 billion gets more, not less.
- mrtksn 2y agoThat's right but the money is given to the people who do it for $500B and there are much better ones who can do it for $5B instead and if they end up getting $6B they will have a better model. What now?
- itsoktocry 2y agoI don't know how to answer this because these are arbitrary numbers. The money is not spent. Deepseek published their methodology, incumbents can pivot and build on it. No one knows what the optimal path is, but we know it will cost more. I can assure you that OpenAI won't continue to produce inferior models at 100x the cost.
- mrtksn 2y agoWhat concerns me is that someone came out of the blue with just as good result at orders of magnitude less cost. What happens if that money is being actually spent, then some people constantly catch up but don't reveal that they are doing it for cheap? You think that it's a competition but what actually happening is that you bleed out of your resources at some point you can't continue but they can. Like the star wars project that bankrupted the soviets.
- rightbyte 2y ago> Like the star wars project that bankrupted the soviets. Wasn't that a G.W Bush Jr thing?
- mattclarkdotnet 2y agoA timeline where the lesser Bush faced off against the Soviet Union would be interesting. But no, it was a Reagan thing.
- IamLoading 2y agoif you say, i wanna build 5 nuclear reactors and I need 200 billion $$. I would believe it because, you can ballpark it with some stats. For tech like LLMs, it feels irresponsible to say 500 billion $$ investment and then place that into R&D. What if in 2026, we realize we can create it for 2 billion$, and let the 498 billion $ sitting in a few consumers.
- brookst 2y agoDon’t think of it as “spend a fixed amount to get a fixed outcome”. Think of it as “spend a fixed amount and see how far you can get” It may still be flawed or misguided or whatever, but it’s not THAT bad.
- ein0p 2y agoI bet the Chinese can build 5 nuclear reactors for a fraction of that price, too. Deepseek says China builds them at $2.5-3.5B per 1200MW reactor.
- ioulaum 2y agoIt seems to mostly be hardware.
- HarHarVeryFunny 2y agoThe $500B is just an aspirational figure they hope to spend on data centers to run AI models, such as GPT-o1 and its successors, that have already been developed. If you want to compare the DeepSeek-R development costs to anything, you should be comparing it to what it cost OpenAI to develop GPT-o1 (not what they plan to spend to run it), but both numbers are somewhat irrelevant since they both build upon prior research. Perhaps what's more relevant is that DeepSeek are not only open sourcing DeepSeek-R1, but have described in a fair bit of detail how they trained it, and how it's possible to use data generated by such a model to fine-tune a much smaller model (without needing RL) to much improve it's "reasoning" performance. This is all raising the bar on the performance you can get for free, or run locally, which reduces what companies like OpenAI can charge for it.
- placardloop 2y agoThinking of the $500B as only an aspirational number is wrong. It’s true that the specific Stargate investment isn’t fully invested yet, but that’s hardly the only money being spent on AI development. The existing hyperscalers have already sunk ungodly amounts of money into literally hundreds of new data centers, millions of GPUs to fill them, chip manufacturing facilities, and even power plants with the impression that, due to the amount of compute required to train and run these models, there would be demand for these things that would pay for that investment. Literally hundreds of billions of dollars spent already on hardware that’s already half (or fully) built, and isn’t easily repurposed. If all of the expected demand on that stuff completely falls through because it turns out the same model training can be done on a fraction of the compute power, we could be looking at a massive bubble pop.
- AYBABTME 2y agoIf the hardware can be used more efficiently to do even more work, the value of the hardware will hold since demand will not reduce but actually increase much faster than supply. Efficiency going up tends to increase demand by much more than the efficiency-induced supply increase. Assuming that the world is hungry for as much AI as it can get. Which I think is true, we're nowhere near the peak of leveraging AI. We barely got started.
- thrw21823471 2y agoTrump just pull a stunt with Saudi Arabia. He first tried to "convince" them to reduce the oil price to hurt Russia. In the following negotiations the oil price was no longer mentioned but MBS promised to invest $600 billion in the U.S. over 4 years: https://fortune.com/2025/01/23/saudi-crown-prince-mbs-trump-kingdom-plans-invest-600-billion-us-4-years/ https://fortune.com/2025/01/23/saudi-crown-prince-mbs-trump-... Since the Stargate Initiative is a private sector deal, this may have been a perfect shakedown of Saudi Arabia. SA has always been irrationally attracted to "AI", so perhaps it was easy. I mean that part of the $600 billion will go to "AI".
- ein0p 2y agoMBS does need to pay lip service to the US, but he's better off investing in Eurasia IMO, and/or in SA itself. US assets are incredibly overpriced right now. I'm sure he understands this, so lip service will be paid, dances with sabers will be conducted, US diplomats will be pacified, but in the end SA will act in its own interests.
- addicted 2y agoOne only needs to look as far back as the first Trump administration to see that Trump only cares about the announcement and doesn’t care about what’s actually done. And if you don’t want to look that far just lookup what his #1 donor Musk said…there is no actual $500Bn.
- HarHarVeryFunny 2y agoYeah - Musk claims SoftBank "only" has $10B available for this atm. There was an amusing interview with MSFT CEO Satya Nadella at Davos where he was asked about this, and his response was "I don't know, but I know I'm good for my $80B [that I'm investing to expand Azure]".
- sampo 2y ago> i.e. high speed rail network instead You want to invest $500B to a high speed rail network which the Chinese could build for $50B?
- mrtksn 2y agoJust commission the Chinese and make it 10X bigger then. In the case of the AI, they appear to commission Sam Altman and Larry Ellison.
- astrange 2y agoThe US has tried to commission Japan for that before. Japan gave up because we wouldn't do anything they asked and went to Morocco.
- inejge 2y agoIt was France: https://www.businessinsider.com/french-california-high-speed-rail-north-africa-biden-trump-2022-10 https://www.businessinsider.com/french-california-high-speed... Doubly delicious since the French have a long and not very nice colonial history in North Africa, sowing long-lasting suspicion and grudges, and still found it easier to operate there.
- creato 2y agoIt doesn't matter who you "commission" to do the actual work, most of the additional cost is in legal battles over rights of way and environmental impacts and other things that are independent of the construction work.
- dutchbookmaker 2y agoMy understanding of the problems with high speed rail in the US is more fundamental than money. The problem is loose vs strong property rights. We don't have the political will in the US to use eminent domain like we did to build the interstates. High speed rail ultimately needs a straight path but if you can't make property acquisitions to build the straight rail path then this is all a non-starter in the US.
- futureshock 2y agoActually it means we will potentially get 100x the economic value out of those datacenters. If we get a million digital PHD researchers for the investment then that’s a lot better than 10,000.
- deleted 2y ago[deleted]
- thrance 2y agoAnd with the $495B left you could probably end world hunger and cure cancer. But like the rest of the economy it's going straight to fueling tech bubbles so the ultra-wealthy can get wealthier.
- porridgeraisin 2y agoThose are not just-throw-money problems. Usually these tropes are limited to instagram comments. Surprised to see it here.
- thrance 2y agoI know, it was simply to show the absurdity of committing $500B to marginally improving next token predictors.
- CamperBob2 2y agoIt's almost as if the people with the money and power know something about "next token predictors" that you don't.
- wonnage 2y agothey clearly missed out on the fact that they could've trained their $5bn model for much less
- WD-42 2y agoNot as much as the Chinese, apparently.
- thrance 2y agoDo you really still believe they have superior intellect? Did Zuckerberg know something you didn't when he poured $10B into the metaverse? What about Crypto, NFTs, Quantum?
- CamperBob2 2y ago
- raincole 2y ago> Isn't that the kind wrong investment that can break nations? It's such a weird question. You made it sound like 1) the $500B is already spent and wasted. 2) infrastructure can't be repurposed.
- asciii 2y ago> Americans excel at 0-to-1 technical innovation, while Chinese excel at 1-to-10 application innovation. I was thinking the same thing...how much is that investment mostly grift? 1: https://www.chinatalk.media/p/deepseek-ceo-interview-with-chinas https://www.chinatalk.media/p/deepseek-ceo-interview-with-ch...
- nejsjsjsbsb 2y agoThink of it like a bet. Or even think of it a bomb.
- ioulaum 2y agoOpenAI will no doubt be copying DeepSeek's ideas also. That compute can go to many things.
- iamgopal 2y ago500 billion can move whole country to renewable energy
- rcpt 2y agoReally? How? That's very interesting
- csomar 2y agoNot even close. The US spends roughly $2trillion/year on energy. If you assume 10% return on solar, that's $20trillion of solar to move the country to renewable. That doesn't calculate the cost of batteries which probably will be another $20trillion. Edit: asked Deepseek about it. I was kinda spot on =) Cost Breakdown Solar Panels $13.4–20.1 trillion (13,400 GW × $1–1.5M/GW) Battery Storage $16–24 trillion (80 TWh × $200–300/kWh) Grid/Transmission $1–2 trillion Land, Installation, Misc. $1–3 trillion Total $30–50 trillion
- oezi 2y agoThe common estimates for total switch to net-zero are 100-200% of GDP which for the US is 27-54 trillion. The most common idea is to spend 3-5% of GDP per year for the transition (750-1250 bn USD per year for the US) over the next 30 years. Certainly a significant sum, but also not too much to shoulder.
- _w1tm 2y agoIt’s also cheaper than dealing with the exponentially increasing costs of climate adaptation.
- iamgopal 2y agoIf Targeted spending of 500 Billion ( per year may be ? ) should give enough automation to reduce panel cost to ~100M/GW = 1340 Billion. Skip battery, let other mode of energy generation/storage take care of the augmentations, as we are any way investing in grid. Possible with innovation.
- suraci 2y agoThere are some theories from my side: 1. Stargate is just another strategic deception like Star Wars. It aims to mislead China into diverting vast resources into an unattainable, low-return arms race, thereby hindering its ability to focus on other critical areas. 2. We must keep producing more and more GPUs. We must eat GPUs at breakfast, lunch, and dinner — otherwise, the bubble will burst, and the consequences will be unbearable. 3. Maybe it's just a good time to let the bubble burst. That's why Wall Street media only noticed DeepSeek-R1 but not V3/V2, and how medias ignored the LLM price war which has been raging in China throughout 2024. If you dig into 10-Ks of MSFT and NVDA, it’s very likely the AI industry was already overcapacity even before Stargate. So in my opinion, I think #3 is the most likely. Just some nonsense — don't take my words seriously.
- HarHarVeryFunny 2y ago> Stargate is just another strategic deception like Star Wars Well, this is a private initiative, not a government one, so it seems not, and anyways trying to bankrupt China, whose GDP is about the same as that of the USA doesn't seem very achievable. The USSR was a much smaller economy, and less technologically advanced. OpenAI appear to genuinely believe that there is going to be a massive market for what they have built, and with the Microsoft relationship cooling off are trying to line up new partners to bankroll the endeavor. It's really more "data center capacity expansion as has become usual" than some new strategic initiative. The hyperscalars are all investing heavily, and OpenAI are now having to do so themselves as well. The splashy Trump photo-op and announcement (for something they already started under Biden) is more about OpenAI manipulating the US government than manipulating China! They have got Trump to tear up Biden's AI safety order, and will no doubt have his help in removing all regulatory obstacles to building new data centers and the accompanying power station builds.
- tap-snap-or-nap 2y agoNo nation state will actually divert money without feasibility studies, there are applications, but you are very likely misfiring. If every device everyone owns has continuously running agents, we will see the multiple applications as time passes by.
- pelorat 2y agoWhen we move to continuously running agents, rather than query-response models, we're going to need a lot more compute.
- m3kw9 2y agoThe 500b isn’t to retrain a model with same performance as R1, but something better and don’t forget inference. Those servers are not just serving/training LLMs, it training next gen video/voice/niche subject and it’s equivalent models like bio/mil/mec/material and serving them to hundreds of millions of people too. Most people saying “lol they did all this for 5mill when they are spending 500bill” just doesnt see anything beyond the next 2 months
- m3kw9 2y agoThe chinese gv would be cutting spending on AI according to your logic, but they are doing opposite, and they’d love to get those B200s I bet you