7 ms·

I don't know... 1.2% of GDP just doesn't seem that extreme to me. Certainly nowhere near "eating the economy" level compared to other transformative technologie

I don't know... 1.2% of GDP just doesn't seem that extreme to me. Certainly nowhere near "eating the economy" level compared to other transformative technologies or programs like: - Apollo program: 4% - Railroads: 6% (mentioned by the author) - Covid stimulus: 27% - WW2 defense: 40%

zachlatta 1y ago
We are only 2 years in! 1.2% of GDP is enormous! The fact that we can even make any of these comparisons is stunning.
- dude250711 1y ago
  It's hard for me to tell what is a bigger misspending of money - LLMs or Apollo... At least I have a direct access to LLMs. Not sure I would need a direct access to moon rocks though.
  - nilamo 1y ago
    One is a footnote in history on the way to decent ML, and the other is the literal moon in the sky. Your comment must be dripping in sarcasm.
  - UncleOxidant 1y ago
    It seems quite plausible that if we hadn't done the Apollo program that we'd probably be about 10 to 20 years behind in semiconductors right now (not to mention other technologies).
    - roenxi 1y ago
      When you say "we" I assume you are from Taiwan? Good for you people, but it isn't much of a win for US industrial policy when it pushes Taiwan to the ascendant position and seems to be locking in Asian dominance of tech manufacturing.
      - UncleOxidant 1y ago
        No, "we" as in humanity. Apollo funding gave the development of integrated circuits a boost. Sure, we would've developed integrated circuits eventually anyway but it would've taken longer to get there.
  - azan_ 1y ago
    And what would you rather spend money on?
    - oblio 1y ago
      Probably housing.
- AlotOfReading 1y ago
  1.2% is larger than either agriculture or mining (including O&G).
EA-3167 1y ago
- The birth of the space age, and more realistically the birth of the ICBM and satellite age. Both key to national security, and in the context of a cold war. - 40% of long-distance ton miles travel by rail in the US. This represents a VAST part of the economic activity within the country. - A literal plague, and the cessation of much economic activity, with the goal of avoiding a total collapse. - ...Come on. So we're comparing these earth-shaking changes and reactions to crisis with "AI"? Other than the people selling pickaxes and hookers to the prospectors, who is getting rich here exactly? What essential economic activity is AI crucial to? What war is it fighting? It mostly seems to be a toy that costs FAR more than it could ever hope to make, subsidized by some obscenely wealthy speculators, executives fantasizing about savings that don't materialize, and a product looking for a purpose commensurate to the resources it eats.
- ToucanLoucan 1y ago
  > What essential economic activity is AI crucial to? The continued devaluing of skilled labor and making smaller pools of workers able to produce at higher levels, if not their automation entirely. And yeah AI generated code blows. It's verbose and inefficient. So what? The state of mainstream platform web development has been a complete shit show since roughly 2010. Websites for a decade plus just... don't load sometimes. Links don't load right, you get in a never-ending spinning loading wheel, stuff just doesn't render or it crashes the browser tab entirely. That's been status quo for Facebook, YouTube, Instagram, fuck knows how many desktop apps which are just web wrappers around websites, for just.. like I said, over a decade at this point. Nobody even bats an eye. I don't see how ChatGPT generating all the code is going to make anything substantively worse than hundreds of junior devs educated at StackOverflow university with zero oversight already have.
  - wizzwizz4 1y ago
    Stack Overflow university is quite good, honestly. The bigger problem is documentation written by Twitter and Facebook folk: their "solutions" don't even work within those companies, and certainly don't work when other people adopt them. On Stack Overflow, people occasionally point out the bad practices that others try to promote.
kulahan 1y ago
As a % of GDP it doesn’t seem very large, but that’s because our GDP is so massive. This is still an entire Norway’s worth of GDP. Like 1.2% isn’t a big percentage, but neither is 3.4% - our total military expenditures this year.
- pinkmuffinere 1y ago
  You’re right that it’s large in an absolute sense, but any sector of the US economy is going to be large in an absolute sense. It’s not a very meaningful statement. Using percentages allows comparison to other items, which for some purposes gives a more useful sense of size. For instance, based on your numbers, AI expenditure is about 1/3 the total military expenditure. I tend to agree that this is less than I expected, and generally makes me feel a bit better about the (imo excessive) hype.
  - joe_the_user 1y ago
    It's small as a part of the economy. It's huge as a completely new thing. The US economy in total has been growing something like an average of 2.5% over recent years. Something that is all-the-growth-of-the-last-year-in-one-place is pretty significant.
    - pinkmuffinere 1y ago
      AI didn’t happen in one year. Netflix’s famous recommender system challenge kicked off in _2006_! And “Big Data” was all the rage ten years ago. The category “AI” includes these things.
      - datameta 1y ago
        We both know the NN boom of the 2010s pales in comparison to the post GPT3.5 era of LLMs.
        tw2742827727 1y ago
        Not in terms of the progress that was made. Almost everything relevant was invented back then.
raincole 1y ago
Yeah that's my first reaction to. 1.2% doesn't sound much. It's just people making headlines out of thin air. If it lists the water and energy consumption I might be more concerned. Slightly off-topic, but ~9% of GDP is generated by "financial services" in the US. Personally I think it's a more alarming data point.
- linotype 1y ago
  https://youtu.be/HA1YKg_OLBw https://youtu.be/HA1YKg_OLBw Financial services makes the unrealistic consumption of rich countries possible. That’s worth 9%.
  - UltraSane 1y ago
    How do they do that?
    - dismalaf 1y ago
      Money multiplier, resource allocation.
      - UltraSane 1y ago
        Odd, they just seem mostly parasitic to me.
  - anticorporate 1y ago
    Wait, so we could end unrealistic consumption in rich countries and get 9% of our economy back to doing something useful? Sounds like a win-win.
    - rogerrogerr 1y ago
      Yes, and you could go back to agrarian life too! Win-win-win! The finance industry's ability to teleport value across time and space is a massive boon for quality of life across the world.
deleted 1y ago
[deleted]
ivape 1y ago
[flagged]
- simianparrot 1y ago
  Please tell me this is satire. Surely you can’t honestly mean this, but these days with AI Poe’s law is way too strong.
  - Sivart13 1y ago
    [flagged]
    - more_corn 1y ago
      LLMs don’t educate. They prevent learning in important ways by solving problems for us.
  - ivape 1y ago
    You think the world does a good job educating people? I’m very serious about making that wholesale change. Many are functionally illiterate and never reach sophisticated academic levels. Many don’t even have parents at home that are qualified to supplement them. Many have teachers who absolutely will never be able to extract their potential. Many are in environments where our current education paradigms will never be able to overcome. LLMs will save a generation of kids.
- intended 1y ago
  Absolutely. Add robotics over vocational training too. I guess religious donations could be rerouted to encoding human consciousness. Wow, then the cheapest servers which run the poorest uploaded consciousnesses (correct plural ?), would also likely be the worst cooled. Making it a cold day in hell if the incentives of humanity ever change.
arthurofbabylon 1y ago
You're looking at dots on a graph when you should be looking at lines and curves (and slopes of curves). The author makes this argument: * Movement of capital from other fields to "AI". * Duration of asset value (eg, AI in months/years vs railroad in decades/centuries). * "Without AI datacenter investment, Q1 GDP contraction could have been closer to –2.1%".
- roxolotl 1y ago
  To state a bit more simply: the rate at which this spending has gone from about 0% to 1.2% is extremely fast which is point the author is trying to make. The Q1 GDP comment is stunning because what it says is that if the same Q1 had happened just two years ago there’s a very good chance we’d be looking at a modestly sized recession. Now of course things aren’t zero-sum and it’s impossible to really make a useful claim like that but it’s still striking.
ViscountPenguin 1y ago
Covid stimulus isn't directly comparable to the other three programs you listed. It was more like tax legislation than an industry.
dyauspitr 1y ago
1/100th of the US economy sounds massive to me.
- jfghi 1y ago
  …for just the cap ex part
  - blibble 1y ago
    the crash is going to be glorious
afiodorov 1y ago
The crux of the article is asking whether such a large investment is justified; downplaying the article saying it's only X% of the GDP compared to Y doesn't address the issue.
AlecSchueler 1y ago
Those were all mega events though.
zer00eyz 1y ago
> Apollo program: 4% More than a decade long. The technology and industry here was broadly shared. They did things like highjacked bra manufacturers to make space suits. > Railroads: 6% (mentioned by the author) We're still using this investment today. > Covid stimulus: 27% The virus that was killing us the fizzled is probably not the best example... Only arguments will ensue if I even attempt to point thing out in this one. > WW2 defense: 40% I mean Russia made its last lend lease payment in 2006. It lead to America dominance of the globe. It looks like an investment that paid it self off. How much of the hardware spend on AI is going to be usable in 5years? There are some deep fundamental questions one should be asking if they pay attention to the hardware space. Who is going to solve the power density problem? Does their solution mean we're moving to exotic cooling (hint: yes)? Have we hit another Moores law style wall (IPC is flat and we dont have a lot of growth left in clock, back to that pesky power and cooling problem). If a lot of it is usable in 5 years thats great, but then the industry isnt going to get any help from the hardware side and thats a bad omen for "scaling". Meanwhile capex does not include power, data, constables or people. It may include training, but we know that can't be amortized. (how long does a trained system last before you need another, or before you need a continuation/update). Everyone is going after AI under the assumption that they can market capture, or build some sort of moat, or... The problem is that no one has come up with the killer app where the tech will pay for itself. And many in the industry are smart enough not to try to build their product on someone else's platform (cause rug pulls are a thing). "AI" could go the way of 3d tv's, VR, metaverse, where the hype never meets up with hope. That doesn't mean we wont get a bunch of great tooling out of it. It is going to need less academics and more engineering (and for that hardware costs have to drop...)
- gsky 1y ago
  thing you are missing out if opportunity cost. All these investments are a chump change for big.
  - chii 1y ago
    > thing you are missing out if opportunity cost. so presumably, the people spending those money have considered the opportunity cost and reckoned it be worth it. Unless you proposed some alternative which would've been better, you cannot say that those spending were bad because "opportunity cost".
deleted 1y ago
[deleted]
bane 1y ago
Total global military expenditure as a percent of global GDP is about 2.5%.
nine_k 1y ago
But it's not about "wow, how much!", it's about "wow, it even registers!"
mycall 1y ago
> WW2 defense: 40% Do you think WW3 defense should be on the charts yet?
- lostlogin 1y ago
  Given that defence spending is hovering around 2.0-2.5% of GDP, I don't think we are there yet. https://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS https://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS
refurb 1y ago
All your other examples were over a period ranging from 3 years to more than a decade.
Yeul 1y ago
Transformative... You know it's just about better targeted advertising.
jstummbillig 1y ago
Given the ratio of software to hardware I think it's pretty significant. Apollo put 12 people on the moon, once. AI is used by hundreds of millions every day.

zachlatta 1y ago

We are only 2 years in! 1.2% of GDP is enormous! The fact that we can even make any of these comparisons is stunning.

dude250711 1y ago
It's hard for me to tell what is a bigger misspending of money - LLMs or Apollo... At least I have a direct access to LLMs. Not sure I would need a direct access to moon rocks though.
- nilamo 1y ago
  One is a footnote in history on the way to decent ML, and the other is the literal moon in the sky. Your comment must be dripping in sarcasm.
- UncleOxidant 1y ago
  It seems quite plausible that if we hadn't done the Apollo program that we'd probably be about 10 to 20 years behind in semiconductors right now (not to mention other technologies).
  - roenxi 1y ago
    When you say "we" I assume you are from Taiwan? Good for you people, but it isn't much of a win for US industrial policy when it pushes Taiwan to the ascendant position and seems to be locking in Asian dominance of tech manufacturing.
    - UncleOxidant 1y ago
      No, "we" as in humanity. Apollo funding gave the development of integrated circuits a boost. Sure, we would've developed integrated circuits eventually anyway but it would've taken longer to get there.
- azan_ 1y ago
  And what would you rather spend money on?
  - oblio 1y ago
    Probably housing.
AlotOfReading 1y ago
1.2% is larger than either agriculture or mining (including O&G).

EA-3167 1y ago

- The birth of the space age, and more realistically the birth of the ICBM and satellite age. Both key to national security, and in the context of a cold war. - 40% of long-distance ton miles travel by rail in the US. This represents a VAST part of the economic activity within the country. - A literal plague, and the cessation of much economic activity, with the goal of avoiding a total collapse. - ...Come on. So we're comparing these earth-shaking changes and reactions to crisis with "AI"? Other than the people selling pickaxes and hookers to the prospectors, who is getting rich here exactly? What essential economic activity is AI crucial to? What war is it fighting? It mostly seems to be a toy that costs FAR more than it could ever hope to make, subsidized by some obscenely wealthy speculators, executives fantasizing about savings that don't materialize, and a product looking for a purpose commensurate to the resources it eats.

ToucanLoucan 1y ago
> What essential economic activity is AI crucial to? The continued devaluing of skilled labor and making smaller pools of workers able to produce at higher levels, if not their automation entirely. And yeah AI generated code blows. It's verbose and inefficient. So what? The state of mainstream platform web development has been a complete shit show since roughly 2010. Websites for a decade plus just... don't load sometimes. Links don't load right, you get in a never-ending spinning loading wheel, stuff just doesn't render or it crashes the browser tab entirely. That's been status quo for Facebook, YouTube, Instagram, fuck knows how many desktop apps which are just web wrappers around websites, for just.. like I said, over a decade at this point. Nobody even bats an eye. I don't see how ChatGPT generating all the code is going to make anything substantively worse than hundreds of junior devs educated at StackOverflow university with zero oversight already have.
- wizzwizz4 1y ago
  Stack Overflow university is quite good, honestly. The bigger problem is documentation written by Twitter and Facebook folk: their "solutions" don't even work within those companies, and certainly don't work when other people adopt them. On Stack Overflow, people occasionally point out the bad practices that others try to promote.

kulahan 1y ago

As a % of GDP it doesn’t seem very large, but that’s because our GDP is so massive. This is still an entire Norway’s worth of GDP. Like 1.2% isn’t a big percentage, but neither is 3.4% - our total military expenditures this year.

pinkmuffinere 1y ago
You’re right that it’s large in an absolute sense, but any sector of the US economy is going to be large in an absolute sense. It’s not a very meaningful statement. Using percentages allows comparison to other items, which for some purposes gives a more useful sense of size. For instance, based on your numbers, AI expenditure is about 1/3 the total military expenditure. I tend to agree that this is less than I expected, and generally makes me feel a bit better about the (imo excessive) hype.
- joe_the_user 1y ago
  It's small as a part of the economy. It's huge as a completely new thing. The US economy in total has been growing something like an average of 2.5% over recent years. Something that is all-the-growth-of-the-last-year-in-one-place is pretty significant.
  - pinkmuffinere 1y ago
    AI didn’t happen in one year. Netflix’s famous recommender system challenge kicked off in _2006_! And “Big Data” was all the rage ten years ago. The category “AI” includes these things.
    - datameta 1y ago
      We both know the NN boom of the 2010s pales in comparison to the post GPT3.5 era of LLMs.
      - tw2742827727 1y ago
        Not in terms of the progress that was made. Almost everything relevant was invented back then.

raincole 1y ago

Yeah that's my first reaction to. 1.2% doesn't sound much. It's just people making headlines out of thin air. If it lists the water and energy consumption I might be more concerned. Slightly off-topic, but ~9% of GDP is generated by "financial services" in the US. Personally I think it's a more alarming data point.

linotype 1y ago
https://youtu.be/HA1YKg_OLBw https://youtu.be/HA1YKg_OLBw Financial services makes the unrealistic consumption of rich countries possible. That’s worth 9%.
- UltraSane 1y ago
  How do they do that?
  - dismalaf 1y ago
    Money multiplier, resource allocation.
    - UltraSane 1y ago
      Odd, they just seem mostly parasitic to me.
- anticorporate 1y ago
  Wait, so we could end unrealistic consumption in rich countries and get 9% of our economy back to doing something useful? Sounds like a win-win.
  - rogerrogerr 1y ago
    Yes, and you could go back to agrarian life too! Win-win-win! The finance industry's ability to teleport value across time and space is a massive boon for quality of life across the world.

deleted 1y ago

[deleted]

ivape 1y ago

[flagged]

simianparrot 1y ago
Please tell me this is satire. Surely you can’t honestly mean this, but these days with AI Poe’s law is way too strong.
- Sivart13 1y ago
  [flagged]
  - more_corn 1y ago
    LLMs don’t educate. They prevent learning in important ways by solving problems for us.
- ivape 1y ago
  You think the world does a good job educating people? I’m very serious about making that wholesale change. Many are functionally illiterate and never reach sophisticated academic levels. Many don’t even have parents at home that are qualified to supplement them. Many have teachers who absolutely will never be able to extract their potential. Many are in environments where our current education paradigms will never be able to overcome. LLMs will save a generation of kids.
intended 1y ago
Absolutely. Add robotics over vocational training too. I guess religious donations could be rerouted to encoding human consciousness. Wow, then the cheapest servers which run the poorest uploaded consciousnesses (correct plural ?), would also likely be the worst cooled. Making it a cold day in hell if the incentives of humanity ever change.

arthurofbabylon 1y ago

You're looking at dots on a graph when you should be looking at lines and curves (and slopes of curves). The author makes this argument: * Movement of capital from other fields to "AI". * Duration of asset value (eg, AI in months/years vs railroad in decades/centuries). * "Without AI datacenter investment, Q1 GDP contraction could have been closer to –2.1%".

roxolotl 1y ago
To state a bit more simply: the rate at which this spending has gone from about 0% to 1.2% is extremely fast which is point the author is trying to make. The Q1 GDP comment is stunning because what it says is that if the same Q1 had happened just two years ago there’s a very good chance we’d be looking at a modestly sized recession. Now of course things aren’t zero-sum and it’s impossible to really make a useful claim like that but it’s still striking.

ViscountPenguin 1y ago

Covid stimulus isn't directly comparable to the other three programs you listed. It was more like tax legislation than an industry.

dyauspitr 1y ago

1/100th of the US economy sounds massive to me.

jfghi 1y ago
…for just the cap ex part
- blibble 1y ago
  the crash is going to be glorious

afiodorov 1y ago

The crux of the article is asking whether such a large investment is justified; downplaying the article saying it's only X% of the GDP compared to Y doesn't address the issue.

AlecSchueler 1y ago

Those were all mega events though.

zer00eyz 1y ago

> Apollo program: 4% More than a decade long. The technology and industry here was broadly shared. They did things like highjacked bra manufacturers to make space suits. > Railroads: 6% (mentioned by the author) We're still using this investment today. > Covid stimulus: 27% The virus that was killing us the fizzled is probably not the best example... Only arguments will ensue if I even attempt to point thing out in this one. > WW2 defense: 40% I mean Russia made its last lend lease payment in 2006. It lead to America dominance of the globe. It looks like an investment that paid it self off. How much of the hardware spend on AI is going to be usable in 5years? There are some deep fundamental questions one should be asking if they pay attention to the hardware space. Who is going to solve the power density problem? Does their solution mean we're moving to exotic cooling (hint: yes)? Have we hit another Moores law style wall (IPC is flat and we dont have a lot of growth left in clock, back to that pesky power and cooling problem). If a lot of it is usable in 5 years thats great, but then the industry isnt going to get any help from the hardware side and thats a bad omen for "scaling". Meanwhile capex does not include power, data, constables or people. It may include training, but we know that can't be amortized. (how long does a trained system last before you need another, or before you need a continuation/update). Everyone is going after AI under the assumption that they can market capture, or build some sort of moat, or... The problem is that no one has come up with the killer app where the tech will pay for itself. And many in the industry are smart enough not to try to build their product on someone else's platform (cause rug pulls are a thing). "AI" could go the way of 3d tv's, VR, metaverse, where the hype never meets up with hope. That doesn't mean we wont get a bunch of great tooling out of it. It is going to need less academics and more engineering (and for that hardware costs have to drop...)

gsky 1y ago
thing you are missing out if opportunity cost. All these investments are a chump change for big.
- chii 1y ago
  > thing you are missing out if opportunity cost. so presumably, the people spending those money have considered the opportunity cost and reckoned it be worth it. Unless you proposed some alternative which would've been better, you cannot say that those spending were bad because "opportunity cost".

deleted 1y ago

[deleted]

bane 1y ago

Total global military expenditure as a percent of global GDP is about 2.5%.

nine_k 1y ago

But it's not about "wow, how much!", it's about "wow, it even registers!"

mycall 1y ago

> WW2 defense: 40% Do you think WW3 defense should be on the charts yet?

lostlogin 1y ago
Given that defence spending is hovering around 2.0-2.5% of GDP, I don't think we are there yet. https://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS https://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS

refurb 1y ago

All your other examples were over a period ranging from 3 years to more than a decade.

Yeul 1y ago

Transformative... You know it's just about better targeted advertising.

jstummbillig 1y ago

Given the ratio of software to hardware I think it's pretty significant. Apollo put 12 people on the moon, once. AI is used by hundreds of millions every day.