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I'm not sure the comparison is apples to apples, but this article claims the current AI investment boom pales compared to the railroad investment boom in the 19

I'm not sure the comparison is apples to apples, but this article claims the current AI investment boom pales compared to the railroad investment boom in the 19th century. https://wccftech.com/ai-capex-might-equal-2-percent-of-us-gdp-in-2025-while-remaining-far-below-the-peak-spending-on-rail-roads-in-the-19th-century/ https://wccftech.com/ai-capex-might-equal-2-percent-of-us-gd... > Next, Kedrosky bestows a 2x multiplier to this imputed AI CapEx level, which equates to a $624 billion positive impact on the US GDP. Based on an estimated US GDP figure of $30 trillion, AI CapEx is expected to amount to 2.08 percent of the US GDP! Do note that peak spending on rail roads eventually amounted to ~20 percent of the US GDP in the 19th century. This means that the ongoing AI CapEx boom has lots of legroom to run before it reaches parity with the rail road boom of that bygone era.

decimalenough 1y ago
There is obvious utility to railroads, especially in a world with no cars. The net utility of AI is far more debatable.
- gruez 1y ago
  >The net utility of AI is far more debatable. I'm sure if you asked the luddites the utility of mechanized textile production you'd get a negative response as well.
  - shadowgovt 1y ago
    With this generation of AI, it's too early to tell whether it's the next railroad, the next textile machine, or the next way to lock your exclusive ownership of an ugly JPG of a multicolored ape into a globally-referenceable, immutable datastore backed by a blockchain.
  - decimalenough 1y ago
    Railroads move people and cargo quickly and cheaply from point A to point B. Mechanized textile production made clothing, a huge sink of time and resources before the industrial age, affordable to everybody. What does AI get the consumer? Worse spam, more realistic scams, hallucinated search results, easy cheating on homework? AI-assisted coding doesn't benefit them, and the jury is still out on that too (see recent study showing it's a net negative for efficiency).
    - azeirah 1y ago
      For learning with self-study it has been amazing.
      - gamblor956 1y ago
        Until you dive deeper and discover that most of what the AI agents provided you was completely wrong... There's a reason that AI is already starting to fade out of the limelight with customers (companies and consumers both). After several years, the best they can offer is slightly better chatbots than we had a decade ago with a fraction of the hardware.
        Gud 1y ago
        That has not been the case for me. I use LLMs to study German, so far it’s been an excellent teacher. I also use them to help me write code, which it does pretty well.
        rockemsockem 1y ago
        I almost always validate what I get back from LLMs and it's usually right. Even when it isn't it still usually gets me closer to my goal (e.g maybe some UX has changed where a setting I'm looking for in an app has changed, etc). IDK where you're getting the idea that it's fading out. So many people are using the "slightly better chatbots" every single day. Btw if you only think chat GPT is slightly better than what we had a decade ago then I do not believe that you have used any chat bots at all, either 10 years ago or recently because that's actually a completely insane take.
        simonw 1y ago
        > So many people are using the "slightly better chatbots" every single day. To back that up, here's a rare update on stats from OpenAI: https://x.com/nickaturley/status/1952385556664520875 https://x.com/nickaturley/status/1952385556664520875 > This week, ChatGPT is on track to reach 700M weekly active users — up from 500M at the end of March and 4× since last year.
  - deleted 1y ago
    [deleted]
  - bgwalter 1y ago
    The mechanical loom produced a tangible good. That kind of automation was supposed to free people from menial work. Now they are trying to replace interesting work with human supervised slop, which is a stolen derivative work in the first place. The loom wasn't centralized in four companies. Customers of textiles did not need an expensive subscription. Obviously average people would benefit more if all that investment went into housing or in fact high speed railways. "AI" does not improve their lives one bit.
  - trod1234 1y ago
    Apples to oranges. Luddites weren't at a point where every industry sees individual capital formation/demand for labor trend towards zero over time. Prices are ratios in the currency between factors and producers. What do you suppose happens when the factors can't buy anything because there is nothing they can trade. Slavery has quite a lot of historic parallels with the trend towards this. Producers stop producing when they can make no profit. You have a deflationary (chaotic) spiral towards socio-economic collapse, under the burden of debt/money-printing (as production risk). There are limits to systems, and when such limits are exceeded; great destruction occurs. Malthus/Catton pose a very real existential threat when such disorder occurs, and its almost inevitable that it does without action to prevent it. One cannot assume action will happen until it actually does.
  - harimau777 1y ago
    I mean, for them it probably was.
  - no_wizard 1y ago
    Luddites weren’t anti technology at all[0] in fact they were quite adept at using technology. It was a labor movement that fought for worker rights in the face of new technologies. [0]: https://www.newyorker.com/books/page-turner/rethinking-the-luddites-in-the-age-of-ai https://www.newyorker.com/books/page-turner/rethinking-the-l...
  - AngryData 1y ago
    The luddites were often the ones that built the mechanized looms. They had nothing against mechanized looms, they had everything against the business owners using their workers talents and knowledge to build an entire operation only to later undercut their wages and/or replace them with lesser paid unskilled workers and reduce the quality of life of their entire community. Getting people to associate the luddites as anti-technology zealots rather than pro-labor organization is one of the most successful pieces of propaganda in history.
    - Macha 1y ago
      People will also use "look society was fine afterwards" as proof the luddites were wrong, but if you look at the fact the growth of industrial revolution cities was driven by importing more people from the countryside than died of disease, it's not clear at all that they were wrong about it's impact on their society, even if it worked out alright for us in the aftermath.
    - GJim 1y ago
      > Getting people to associate the luddites as anti-technology zealots Interestingly.... ..... the fact that luddites also called for unemployment compensation and retraining for workers displaced by the new machinery, probably makes them amongst the most forward thinking and progressive people of the 1800's.
    - gruez 1y ago
      >The luddites were often the ones that built the mechanized looms. Source? Skimming the wikipedia article it definitely sounds like most were made up of former skilled textile workers that were upset they were replaced with unskilled workers operating the new machines. > They had nothing against mechanized looms, they had everything against the business owners using their workers talents and knowledge to build an entire operation only to later undercut their wages and/or replace them with lesser paid unskilled workers and reduce the quality of life of their entire community. Sounds a lot like the anti-AI sentiment today, eg. "I'm not against AI, I'm just against it being used by evil corporations so they don't have to hire human workers". The "AI slop" argument also resembles luddites objecting to the new machines on the quality of "quality" (also from wikipedia), although to be fair that was only a passing mention.
  - wat10000 1y ago
    They laughed at Einstein, but they also laughed at Bozo the Clown. This sort of “other people were wrong once, so you might be too” comment is really pointless.
- rockemsockem 1y ago
  I'm continually amazed to find takes like this. Can you explain how you don't find clear utility, at the personal level, from LLMs? I am being 100% genuine here, I struggle to understand how the most useful things I've ever encountered are thought of this way and would like to better understand your perspective.
  - agent_turtle 1y ago
    There was a study recently that showed how not only did devs overestimate the time saved using AI, but that they were net negative compared to the control group. Anyway, that about sums up my experience with AI. It may save some time here and there, but on net, you’re better off without it.
    - keeda 1y ago
      That study gets mentioned all the time, somehow this one and many of the others it cites don't get much airtime: https://www.stlouisfed.org/on-the-economy/2024/sep/rapid-adoption-generative-ai https://www.stlouisfed.org/on-the-economy/2024/sep/rapid-ado... >This implies that each hour spent using genAI increases the worker’s productivity for that hour by 33%. This is similar in magnitude to the average productivity gain of 27% from several randomized experiments of genAI usage (Cui et al., 2024; Dell’Acqua et al., 2023; Noy and Zhang, 2023; Peng et al., 2023) Our estimated aggregate productivity gain from genAI (1.1%) exceeds the 0.7% estimate by Acemoglu (2024) based on a similar framework. To be clear, they are surmising that GenAI is already having a productivity gain.
      - agent_turtle 1y ago
        The article you gave is derived from a poll, not a study. As for the quote, I can’t find it in the article. Can you point me to it? I did click on one of the studies and it indicated productivity gains specifically on writing tasks. Which reminded me of this recent BBC article about a copywriter making bank fixing expensive mistakes caused by AI: https://www.bbc.com/news/articles/cyvm1dyp9v2o https://www.bbc.com/news/articles/cyvm1dyp9v2o
- peab 1y ago
  the goal of the major AI labs is to create AGI. The net utility of AGI is at least on the level of electricity, or the steam engine. It's debatable whether or not they'll achieve that, but if you actually look at what the goal is, the investment makes sense.
  - jcgrillo 1y ago
    what? crashing the economy for a psychotic sci-fi delusion "makes sense"? how?
    - rockemsockem 1y ago
      How exactly is AI crashing the economy....? Do you walk around with these beliefs every day?
      - jcgrillo 1y ago
        when bubbles burst crashes follow. this is a colossal bubble. i do walk around with that belief every day, because every day that passes is yet another day when this overblown AI hype bullshit fails to deliver the goods.
        rockemsockem 1y ago
        So you think the entire perceived value of AI will be wiped out. I think we probably are in a bubble, but much like housing bubbles in major metro areas, the value is real and so the bubble is on top of that real value vs being 100% synthetic.
        jcgrillo 1y ago
        Yes, because big market crashes don't just impact the previously inflated sectors. They hurt all the sectors. So the wipeout could easily exceed the current perceived value of AI.
        1y ago
- skybrian 1y ago
  Computing is fairly general-purpose, so I suspect that the data centers at least will be used for something. Reusing so many GPU's might be harder, but not as bad as ASICs. There are a lot of other calculations they could do.
  - blibble 1y ago
    a data centre is a big warehouse the vast expense is on the GPU silicon, which is essentially useless for compute other than parallel floating point operations when the bubble pops, the "investment" will be a very expensive total waste of perfectly good sand
    - BobaFloutist 1y ago
      Maybe they can use it all to mine crypto.
      - haganomy 1y ago
        If I had to hazard a guess as to why China and the US are building so many GPU farms under the guise of "AI supremacy", I'd say it's to support state sponsored hacking.
    - fc417fc802 1y ago
      Most scientific HPC workloads are designed to utilize GPU equipped nodes. If AI completely flops scientific modeling will see huge benefits. It's a win-win (except for the investors I guess).
    - skybrian 1y ago
      I don't think we're too worried about wasting sand, though? What are the major costs of producing a GPU? Which of those are we worried about wasting? I'm not going to do the homework for a Hacker News comment, but here are a few guesses: I suspect that a lot of it is TSMC's capex for building new fabs. But since the fabs are already built, they could run them for longer. (Possibly producing different chips.) Meanwhile, carbon emissions due to electricity use by data centers can't be taken back. But also, much of an investment bubble popping wouldn't be about wasting resources. It would be investors' anticipated profits turning out to be a mirage - that is, investors feel poorer, but nothing material was lost.
- eru 1y ago
  > There is obvious utility to railroads, especially in a world with no cars. > The net utility of AI is far more debatable. As long as people are willing to pay for access to AI (either directly or indirectly), who are we to argue? In comparison: what's the utility of watching a Star Wars movie? I say, if people are willing to part with their hard earned cash for something, we must assume that they get something out of it.
- pjc50 1y ago
  The utility of housing is not at all ambiguous, but yet we still had a destructive boom-crash in debt-financed housing.
- Falkon1313 1y ago
  It's more than that even. AI may have plenty of utility. But does the massive capex on GPUs that will all be obsolete in a couple years? You can still run a train on those old tracks. And it'll be competitive. Sure you could build all new tracks, but that's a lot more expensive and difficult. So they'll need to be a whole lot better to beat the established network. But GPUs? And with how much tech has changed in the last decade or two and might in the next? We saw cryptocurrency mining go from CPU to GPU to FPGA to ASICs in just a few years. We can't yet tell where this fad is going. But there's fair reason to believe that, even if AI has tons of utility, the current economics of it might be problematic.
  - HPsquared 1y ago
    Yeah you'd think the rapid obsolescence of the hardware would dampen P/E ratios a little. It has to pay for itself quickly. P/E is, after all, given in the implied unit of "years". (Same as other ratios like debt/GDP).
tharmas 1y ago
Isn't the US economy far more varied than it was in the 19th century? More dense? And therefore wouldn't be more difficult for one industry to dominate the US economy today than it was in the 19th century?
tripletao 1y ago
> Do note that peak spending on rail roads eventually amounted to ~20 percent of the US GDP in the 19th century. Has anyone found the source for that 20%? Here's a paper I found: > Between 1848 and 1854, railroad investment, in these and in preceding years, contributed to 4.31% of GDP. Overall, the 1850s are the period in which railroad investment had the most substantial contribution to economic conditions, 2.93% of GDP, relative to 2.51% during the 1840s and 2.49% during the 1830s, driven by the much larger investment volumes during the period. https://economics.wm.edu/wp/cwm_wp153.pdf https://economics.wm.edu/wp/cwm_wp153.pdf The first sentence isn't clear to me. Is 4.31 > 2.93 because the average was higher from 1848-1854 than from 1850-1859, or because the "preceding years" part means they lumped earlier investment into the former range so it's not actually an average? Regardless, we're nowhere near 20%. I'm wondering if the claim was actually something like "total investment over x years was 20% of GDP for one year". For example, a paper about the UK says: > At that time, £170 million was close to 20% of GDP, and most of it was spent in about four years. https://www-users.cse.umn.edu/~odlyzko/doc/mania18.pdf https://www-users.cse.umn.edu/~odlyzko/doc/mania18.pdf That would be more believable, but the comparison with AI spending in a single year would not be meaningful.
- theologic 1y ago
  By the way it's always nice when somebody actually tries to double check somebody else's research especially when you hear numbers that seemingly just sound crazy. Maybe another factoid, GDP or GNP for all practical purposes wasn't rigorously done by the government until about 1944. I believe a large part of our viewpoints on what happened in the 1800s is primarily based upon census data. But obviously if you're trying to measure a 7 year event Using census that happens every 10 years, there's going to be a lot of gap in the whisker chart.
  - potato3732842 1y ago
    Is 20% on railroad actually crazy? We spend 20% on make-work for the healthcare industry. In a majority agrarian economy where a lot of output doesn't go toward GDP (e.g. milking your own damn cow to feed milk to your own damn family won't show up) I would expect "new hotness" booms to look bigger than they actually are.
jefftk 1y ago
> Do note that peak spending on rail roads eventually amounted to ~20 percent of the US GDP in the 19th century. When you go so far back in time you run into the problem where GDP only counts the market economy. When you count people farming for their own consumption, making their own clothes, etc, spending on railroads was a much smaller fraction of the US economy than you'd estimate from that statistic (maybe 5-10%?)
- eru 1y ago
  Yes, that was a problem back then, and is also a problem today, but in different ways. First, GDP still doesn't count you making your own meals. Second, when eg free Wikipedia replaces paid for encyclopedias, this makes society better off, but technically decreases GDP. However, having said all that, it's remarkably how well GDP correlates with all the goods things we care about, despite its technical limitations.
  - jefftk 1y ago
    This has always been an issue with GDP, but it's a much larger issue the father back you go. While GDP correlates reasonably well, imagine very roughly what it would be like if GDP growth averaged 3% annually while the overall economy grew at 2%. While correlation would be good, if we speculate that 80% of the economy is counted in GDP today, then only 10% would have been counted 200 years ago.
    - epicureanideal 1y ago
      It would be great if there was a "GDP + non-transactional economy" metric. Does one exist, or is there a relatively straightforward way to construct one?
      - danlitt 1y ago
        I don't think we have a way to reliably estimate the value of non-transactional goods, because by definition nobody gives them a price.
onlyrealcuzzo 1y ago
I don't know if the economy could ever be accurately reduced to "good" or "bad". What's good for one class is often bad for another. Is it a "good" economy if real GDP is up 4%, the S&P 500 is up 40%, and unemployment is up 10%? For some people that's great. For others, not so great. Maybe some economies are great for everyone, but this is definitely not one of those. This economy is great for some people and bad for others.
- fc417fc802 1y ago
  > Is it a "good" economy if real GDP is up 4%, the S&P 500 is up 40%, and unemployment is up 10%? In today's US? Debatable, but on the whole probably not. In a hypothetical country with sane health care and social safety net policies? Yes that would be hugely beneficial. The tax base would bear the vast majority of the burden of those displaced from their jobs making it a much more straightforward collective optimization problem.
  - eru 1y ago
    The US spends more per capita on their social safety net than almost all other countries, including France and the UK. The US spends around 6.8k USD/capita/year on public health care. The UK spends around 4.2k USD/capita/year and France spends around 3.7k. For general public social spending the numbers are 17.7k for the US, 10.2k for the UK and 13k for France. (The data is for 2022.) Though I realise you asked for sane policies. I can't comment on that. I'm not quite sure why the grandfather commenter talks about unemployment: the US had and has fairly low unemployment in the last few decades. And places like France with their vaunted social safety net have much higher unemployment.
    - lossolo 1y ago
      It’s not just how much you spend on healthcare, but what that spending actually delivers. How much does an emergency room visit cost in the U.S. compared to the UK or France? How do prescription drug prices in the U.S. compare to those in the EU? When you look at what Americans pay relative to outcomes, the U.S. has one of the most inefficient healthcare systems among OECD countries.
esseph 1y ago
Another interesting claim I have come across is that AI investment is now larger that consumer spending: https://sherwood.news/markets/the-ai-spending-boom-is-eating-the-us-economy/ https://sherwood.news/markets/the-ai-spending-boom-is-eating...
- troyastorino 1y ago
  Put a comment on this below, but the claim is highly misleading...consumer spending is ~$5 trillion, AI investment is ~$100 billion. The graph is looking at something like contribution to GDP growth (not contribution to GDP), but that is even misleading b/c if you don't adjust for seasonality, H1 consumer spending is almost always lower than H2 consumer spending of the previous year (because Q4 always has a higher level of consumer spending). (comment below: https://news.ycombinator.com/item?id=44804528 https://news.ycombinator.com/item?id=44804528 )
  - zzleeper 1y ago
    To clarify, AI investment has contributed more to GDP GROWTH than consumer spending. So they are talking about changes not levels.
gorgoiler 1y ago
One way to think about it is what if we’d done it the other way around? If we’d had AI first at 20% GDP investment levels, would the subsequent railroad boom have been an order of magnitude smaller at 2% GDP? For me, that’s enough of a thought experiment — as implausible as it might be to have AI in 1901 — to be skeptical that the difference is simply that the first tech step-change was a pre-war uplift to build the post-war US success story, and the latter builds on it.
Ekaros 1y ago
I wonder about actual effectiveness of spending on railroads vs AI... Even if railroads were somewhat waste, did the investment spread much wider? At least geographically it must have as there were workers that moved around and needed services. That is it was mostly spend in economy. Thus had actual change to trickle down. Where as AI, who actually gets the investment? Nvidia? TMSC? Are people who are employed some that would have anyway been employed? Do they actually spend much more? Any Nvidia profits likely go just back to the market propping it up even higher. How much efficiency from use of LLMs have actually increased proctiveness?
fuzzfactor 1y ago
>not sure the comparison is apples to apples More like apples to octopus. People should keep in mind that there was no such thing as a GDP before the 1980's. All that has been back-calculated, and the further back you go the more ridiculous it gets. Excuses sounded plausible at the time but killed two birds with one stone. Less rapid increase in government benefits which had become based on GNP for survival to cope with inflation, and further obscuring the ongoing poor economic performance of the 1980's going forward compared to how it was before 1970 numerically. The people who were numerically smart before that and saw what things were like first hand were not fooled so easily. Even using GDP back in the 1980's when it first came out, you couldn't get a good picture of the 1960's which were not that much earlier. Don't make me laugh trying for the 1860's :)
tagami 1y ago
Consider other infrastructure such as the US highway system. There may be an expansive bubble, but infrastructure such as the increase in base power production needs to be factored as well.

decimalenough 1y ago

There is obvious utility to railroads, especially in a world with no cars. The net utility of AI is far more debatable.

gruez 1y ago
>The net utility of AI is far more debatable. I'm sure if you asked the luddites the utility of mechanized textile production you'd get a negative response as well.
- shadowgovt 1y ago
  With this generation of AI, it's too early to tell whether it's the next railroad, the next textile machine, or the next way to lock your exclusive ownership of an ugly JPG of a multicolored ape into a globally-referenceable, immutable datastore backed by a blockchain.
- decimalenough 1y ago
  Railroads move people and cargo quickly and cheaply from point A to point B. Mechanized textile production made clothing, a huge sink of time and resources before the industrial age, affordable to everybody. What does AI get the consumer? Worse spam, more realistic scams, hallucinated search results, easy cheating on homework? AI-assisted coding doesn't benefit them, and the jury is still out on that too (see recent study showing it's a net negative for efficiency).
  - azeirah 1y ago
    For learning with self-study it has been amazing.
    - gamblor956 1y ago
      Until you dive deeper and discover that most of what the AI agents provided you was completely wrong... There's a reason that AI is already starting to fade out of the limelight with customers (companies and consumers both). After several years, the best they can offer is slightly better chatbots than we had a decade ago with a fraction of the hardware.
      - Gud 1y ago
        That has not been the case for me. I use LLMs to study German, so far it’s been an excellent teacher. I also use them to help me write code, which it does pretty well.
      - rockemsockem 1y ago
        I almost always validate what I get back from LLMs and it's usually right. Even when it isn't it still usually gets me closer to my goal (e.g maybe some UX has changed where a setting I'm looking for in an app has changed, etc). IDK where you're getting the idea that it's fading out. So many people are using the "slightly better chatbots" every single day. Btw if you only think chat GPT is slightly better than what we had a decade ago then I do not believe that you have used any chat bots at all, either 10 years ago or recently because that's actually a completely insane take.
        simonw 1y ago
        > So many people are using the "slightly better chatbots" every single day. To back that up, here's a rare update on stats from OpenAI: https://x.com/nickaturley/status/1952385556664520875 https://x.com/nickaturley/status/1952385556664520875 > This week, ChatGPT is on track to reach 700M weekly active users — up from 500M at the end of March and 4× since last year.
- deleted 1y ago
  [deleted]
- bgwalter 1y ago
  The mechanical loom produced a tangible good. That kind of automation was supposed to free people from menial work. Now they are trying to replace interesting work with human supervised slop, which is a stolen derivative work in the first place. The loom wasn't centralized in four companies. Customers of textiles did not need an expensive subscription. Obviously average people would benefit more if all that investment went into housing or in fact high speed railways. "AI" does not improve their lives one bit.
- trod1234 1y ago
  Apples to oranges. Luddites weren't at a point where every industry sees individual capital formation/demand for labor trend towards zero over time. Prices are ratios in the currency between factors and producers. What do you suppose happens when the factors can't buy anything because there is nothing they can trade. Slavery has quite a lot of historic parallels with the trend towards this. Producers stop producing when they can make no profit. You have a deflationary (chaotic) spiral towards socio-economic collapse, under the burden of debt/money-printing (as production risk). There are limits to systems, and when such limits are exceeded; great destruction occurs. Malthus/Catton pose a very real existential threat when such disorder occurs, and its almost inevitable that it does without action to prevent it. One cannot assume action will happen until it actually does.
- harimau777 1y ago
  I mean, for them it probably was.
- no_wizard 1y ago
  Luddites weren’t anti technology at all[0] in fact they were quite adept at using technology. It was a labor movement that fought for worker rights in the face of new technologies. [0]: https://www.newyorker.com/books/page-turner/rethinking-the-luddites-in-the-age-of-ai https://www.newyorker.com/books/page-turner/rethinking-the-l...
- AngryData 1y ago
  The luddites were often the ones that built the mechanized looms. They had nothing against mechanized looms, they had everything against the business owners using their workers talents and knowledge to build an entire operation only to later undercut their wages and/or replace them with lesser paid unskilled workers and reduce the quality of life of their entire community. Getting people to associate the luddites as anti-technology zealots rather than pro-labor organization is one of the most successful pieces of propaganda in history.
  - Macha 1y ago
    People will also use "look society was fine afterwards" as proof the luddites were wrong, but if you look at the fact the growth of industrial revolution cities was driven by importing more people from the countryside than died of disease, it's not clear at all that they were wrong about it's impact on their society, even if it worked out alright for us in the aftermath.
  - GJim 1y ago
    > Getting people to associate the luddites as anti-technology zealots Interestingly.... ..... the fact that luddites also called for unemployment compensation and retraining for workers displaced by the new machinery, probably makes them amongst the most forward thinking and progressive people of the 1800's.
  - gruez 1y ago
    >The luddites were often the ones that built the mechanized looms. Source? Skimming the wikipedia article it definitely sounds like most were made up of former skilled textile workers that were upset they were replaced with unskilled workers operating the new machines. > They had nothing against mechanized looms, they had everything against the business owners using their workers talents and knowledge to build an entire operation only to later undercut their wages and/or replace them with lesser paid unskilled workers and reduce the quality of life of their entire community. Sounds a lot like the anti-AI sentiment today, eg. "I'm not against AI, I'm just against it being used by evil corporations so they don't have to hire human workers". The "AI slop" argument also resembles luddites objecting to the new machines on the quality of "quality" (also from wikipedia), although to be fair that was only a passing mention.
- wat10000 1y ago
  They laughed at Einstein, but they also laughed at Bozo the Clown. This sort of “other people were wrong once, so you might be too” comment is really pointless.
rockemsockem 1y ago
I'm continually amazed to find takes like this. Can you explain how you don't find clear utility, at the personal level, from LLMs? I am being 100% genuine here, I struggle to understand how the most useful things I've ever encountered are thought of this way and would like to better understand your perspective.
- agent_turtle 1y ago
  There was a study recently that showed how not only did devs overestimate the time saved using AI, but that they were net negative compared to the control group. Anyway, that about sums up my experience with AI. It may save some time here and there, but on net, you’re better off without it.
  - keeda 1y ago
    That study gets mentioned all the time, somehow this one and many of the others it cites don't get much airtime: https://www.stlouisfed.org/on-the-economy/2024/sep/rapid-adoption-generative-ai https://www.stlouisfed.org/on-the-economy/2024/sep/rapid-ado... >This implies that each hour spent using genAI increases the worker’s productivity for that hour by 33%. This is similar in magnitude to the average productivity gain of 27% from several randomized experiments of genAI usage (Cui et al., 2024; Dell’Acqua et al., 2023; Noy and Zhang, 2023; Peng et al., 2023) Our estimated aggregate productivity gain from genAI (1.1%) exceeds the 0.7% estimate by Acemoglu (2024) based on a similar framework. To be clear, they are surmising that GenAI is already having a productivity gain.
    - agent_turtle 1y ago
      The article you gave is derived from a poll, not a study. As for the quote, I can’t find it in the article. Can you point me to it? I did click on one of the studies and it indicated productivity gains specifically on writing tasks. Which reminded me of this recent BBC article about a copywriter making bank fixing expensive mistakes caused by AI: https://www.bbc.com/news/articles/cyvm1dyp9v2o https://www.bbc.com/news/articles/cyvm1dyp9v2o
peab 1y ago
the goal of the major AI labs is to create AGI. The net utility of AGI is at least on the level of electricity, or the steam engine. It's debatable whether or not they'll achieve that, but if you actually look at what the goal is, the investment makes sense.
- jcgrillo 1y ago
  what? crashing the economy for a psychotic sci-fi delusion "makes sense"? how?
  - rockemsockem 1y ago
    How exactly is AI crashing the economy....? Do you walk around with these beliefs every day?
    - jcgrillo 1y ago
      when bubbles burst crashes follow. this is a colossal bubble. i do walk around with that belief every day, because every day that passes is yet another day when this overblown AI hype bullshit fails to deliver the goods.
      - rockemsockem 1y ago
        So you think the entire perceived value of AI will be wiped out. I think we probably are in a bubble, but much like housing bubbles in major metro areas, the value is real and so the bubble is on top of that real value vs being 100% synthetic.
        jcgrillo 1y ago
        Yes, because big market crashes don't just impact the previously inflated sectors. They hurt all the sectors. So the wipeout could easily exceed the current perceived value of AI.
        1y ago
skybrian 1y ago
Computing is fairly general-purpose, so I suspect that the data centers at least will be used for something. Reusing so many GPU's might be harder, but not as bad as ASICs. There are a lot of other calculations they could do.
- blibble 1y ago
  a data centre is a big warehouse the vast expense is on the GPU silicon, which is essentially useless for compute other than parallel floating point operations when the bubble pops, the "investment" will be a very expensive total waste of perfectly good sand
  - BobaFloutist 1y ago
    Maybe they can use it all to mine crypto.
    - haganomy 1y ago
      If I had to hazard a guess as to why China and the US are building so many GPU farms under the guise of "AI supremacy", I'd say it's to support state sponsored hacking.
  - fc417fc802 1y ago
    Most scientific HPC workloads are designed to utilize GPU equipped nodes. If AI completely flops scientific modeling will see huge benefits. It's a win-win (except for the investors I guess).
  - skybrian 1y ago
    I don't think we're too worried about wasting sand, though? What are the major costs of producing a GPU? Which of those are we worried about wasting? I'm not going to do the homework for a Hacker News comment, but here are a few guesses: I suspect that a lot of it is TSMC's capex for building new fabs. But since the fabs are already built, they could run them for longer. (Possibly producing different chips.) Meanwhile, carbon emissions due to electricity use by data centers can't be taken back. But also, much of an investment bubble popping wouldn't be about wasting resources. It would be investors' anticipated profits turning out to be a mirage - that is, investors feel poorer, but nothing material was lost.
eru 1y ago
> There is obvious utility to railroads, especially in a world with no cars. > The net utility of AI is far more debatable. As long as people are willing to pay for access to AI (either directly or indirectly), who are we to argue? In comparison: what's the utility of watching a Star Wars movie? I say, if people are willing to part with their hard earned cash for something, we must assume that they get something out of it.
pjc50 1y ago
The utility of housing is not at all ambiguous, but yet we still had a destructive boom-crash in debt-financed housing.
Falkon1313 1y ago
It's more than that even. AI may have plenty of utility. But does the massive capex on GPUs that will all be obsolete in a couple years? You can still run a train on those old tracks. And it'll be competitive. Sure you could build all new tracks, but that's a lot more expensive and difficult. So they'll need to be a whole lot better to beat the established network. But GPUs? And with how much tech has changed in the last decade or two and might in the next? We saw cryptocurrency mining go from CPU to GPU to FPGA to ASICs in just a few years. We can't yet tell where this fad is going. But there's fair reason to believe that, even if AI has tons of utility, the current economics of it might be problematic.
- HPsquared 1y ago
  Yeah you'd think the rapid obsolescence of the hardware would dampen P/E ratios a little. It has to pay for itself quickly. P/E is, after all, given in the implied unit of "years". (Same as other ratios like debt/GDP).

tharmas 1y ago

Isn't the US economy far more varied than it was in the 19th century? More dense? And therefore wouldn't be more difficult for one industry to dominate the US economy today than it was in the 19th century?

tripletao 1y ago

> Do note that peak spending on rail roads eventually amounted to ~20 percent of the US GDP in the 19th century. Has anyone found the source for that 20%? Here's a paper I found: > Between 1848 and 1854, railroad investment, in these and in preceding years, contributed to 4.31% of GDP. Overall, the 1850s are the period in which railroad investment had the most substantial contribution to economic conditions, 2.93% of GDP, relative to 2.51% during the 1840s and 2.49% during the 1830s, driven by the much larger investment volumes during the period. https://economics.wm.edu/wp/cwm_wp153.pdf https://economics.wm.edu/wp/cwm_wp153.pdf The first sentence isn't clear to me. Is 4.31 > 2.93 because the average was higher from 1848-1854 than from 1850-1859, or because the "preceding years" part means they lumped earlier investment into the former range so it's not actually an average? Regardless, we're nowhere near 20%. I'm wondering if the claim was actually something like "total investment over x years was 20% of GDP for one year". For example, a paper about the UK says: > At that time, £170 million was close to 20% of GDP, and most of it was spent in about four years. https://www-users.cse.umn.edu/~odlyzko/doc/mania18.pdf https://www-users.cse.umn.edu/~odlyzko/doc/mania18.pdf That would be more believable, but the comparison with AI spending in a single year would not be meaningful.

theologic 1y ago
By the way it's always nice when somebody actually tries to double check somebody else's research especially when you hear numbers that seemingly just sound crazy. Maybe another factoid, GDP or GNP for all practical purposes wasn't rigorously done by the government until about 1944. I believe a large part of our viewpoints on what happened in the 1800s is primarily based upon census data. But obviously if you're trying to measure a 7 year event Using census that happens every 10 years, there's going to be a lot of gap in the whisker chart.
- potato3732842 1y ago
  Is 20% on railroad actually crazy? We spend 20% on make-work for the healthcare industry. In a majority agrarian economy where a lot of output doesn't go toward GDP (e.g. milking your own damn cow to feed milk to your own damn family won't show up) I would expect "new hotness" booms to look bigger than they actually are.

jefftk 1y ago

> Do note that peak spending on rail roads eventually amounted to ~20 percent of the US GDP in the 19th century. When you go so far back in time you run into the problem where GDP only counts the market economy. When you count people farming for their own consumption, making their own clothes, etc, spending on railroads was a much smaller fraction of the US economy than you'd estimate from that statistic (maybe 5-10%?)

eru 1y ago
Yes, that was a problem back then, and is also a problem today, but in different ways. First, GDP still doesn't count you making your own meals. Second, when eg free Wikipedia replaces paid for encyclopedias, this makes society better off, but technically decreases GDP. However, having said all that, it's remarkably how well GDP correlates with all the goods things we care about, despite its technical limitations.
- jefftk 1y ago
  This has always been an issue with GDP, but it's a much larger issue the father back you go. While GDP correlates reasonably well, imagine very roughly what it would be like if GDP growth averaged 3% annually while the overall economy grew at 2%. While correlation would be good, if we speculate that 80% of the economy is counted in GDP today, then only 10% would have been counted 200 years ago.
  - epicureanideal 1y ago
    It would be great if there was a "GDP + non-transactional economy" metric. Does one exist, or is there a relatively straightforward way to construct one?
    - danlitt 1y ago
      I don't think we have a way to reliably estimate the value of non-transactional goods, because by definition nobody gives them a price.

onlyrealcuzzo 1y ago

I don't know if the economy could ever be accurately reduced to "good" or "bad". What's good for one class is often bad for another. Is it a "good" economy if real GDP is up 4%, the S&P 500 is up 40%, and unemployment is up 10%? For some people that's great. For others, not so great. Maybe some economies are great for everyone, but this is definitely not one of those. This economy is great for some people and bad for others.

fc417fc802 1y ago
> Is it a "good" economy if real GDP is up 4%, the S&P 500 is up 40%, and unemployment is up 10%? In today's US? Debatable, but on the whole probably not. In a hypothetical country with sane health care and social safety net policies? Yes that would be hugely beneficial. The tax base would bear the vast majority of the burden of those displaced from their jobs making it a much more straightforward collective optimization problem.
- eru 1y ago
  The US spends more per capita on their social safety net than almost all other countries, including France and the UK. The US spends around 6.8k USD/capita/year on public health care. The UK spends around 4.2k USD/capita/year and France spends around 3.7k. For general public social spending the numbers are 17.7k for the US, 10.2k for the UK and 13k for France. (The data is for 2022.) Though I realise you asked for sane policies. I can't comment on that. I'm not quite sure why the grandfather commenter talks about unemployment: the US had and has fairly low unemployment in the last few decades. And places like France with their vaunted social safety net have much higher unemployment.
  - lossolo 1y ago
    It’s not just how much you spend on healthcare, but what that spending actually delivers. How much does an emergency room visit cost in the U.S. compared to the UK or France? How do prescription drug prices in the U.S. compare to those in the EU? When you look at what Americans pay relative to outcomes, the U.S. has one of the most inefficient healthcare systems among OECD countries.

esseph 1y ago

Another interesting claim I have come across is that AI investment is now larger that consumer spending: https://sherwood.news/markets/the-ai-spending-boom-is-eating-the-us-economy/ https://sherwood.news/markets/the-ai-spending-boom-is-eating...

troyastorino 1y ago
Put a comment on this below, but the claim is highly misleading...consumer spending is ~$5 trillion, AI investment is ~$100 billion. The graph is looking at something like contribution to GDP growth (not contribution to GDP), but that is even misleading b/c if you don't adjust for seasonality, H1 consumer spending is almost always lower than H2 consumer spending of the previous year (because Q4 always has a higher level of consumer spending). (comment below: https://news.ycombinator.com/item?id=44804528 https://news.ycombinator.com/item?id=44804528 )
- zzleeper 1y ago
  To clarify, AI investment has contributed more to GDP GROWTH than consumer spending. So they are talking about changes not levels.

gorgoiler 1y ago

One way to think about it is what if we’d done it the other way around? If we’d had AI first at 20% GDP investment levels, would the subsequent railroad boom have been an order of magnitude smaller at 2% GDP? For me, that’s enough of a thought experiment — as implausible as it might be to have AI in 1901 — to be skeptical that the difference is simply that the first tech step-change was a pre-war uplift to build the post-war US success story, and the latter builds on it.

Ekaros 1y ago

I wonder about actual effectiveness of spending on railroads vs AI... Even if railroads were somewhat waste, did the investment spread much wider? At least geographically it must have as there were workers that moved around and needed services. That is it was mostly spend in economy. Thus had actual change to trickle down. Where as AI, who actually gets the investment? Nvidia? TMSC? Are people who are employed some that would have anyway been employed? Do they actually spend much more? Any Nvidia profits likely go just back to the market propping it up even higher. How much efficiency from use of LLMs have actually increased proctiveness?

fuzzfactor 1y ago

>not sure the comparison is apples to apples More like apples to octopus. People should keep in mind that there was no such thing as a GDP before the 1980's. All that has been back-calculated, and the further back you go the more ridiculous it gets. Excuses sounded plausible at the time but killed two birds with one stone. Less rapid increase in government benefits which had become based on GNP for survival to cope with inflation, and further obscuring the ongoing poor economic performance of the 1980's going forward compared to how it was before 1970 numerically. The people who were numerically smart before that and saw what things were like first hand were not fooled so easily. Even using GDP back in the 1980's when it first came out, you couldn't get a good picture of the 1960's which were not that much earlier. Don't make me laugh trying for the 1860's :)

tagami 1y ago

Consider other infrastructure such as the US highway system. There may be an expansive bubble, but infrastructure such as the increase in base power production needs to be factored as well.