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It’s worth noting that pretty much all the growth in AI / Data centres is an accounting trick as well. Nvidia just announced it’s investing X billion dollars i

It’s worth noting that pretty much all the growth in AI / Data centres is an accounting trick as well. Nvidia just announced it’s investing X billion dollars into OpenAI who will turn around and spend 98% of that on Nvidia chips, so GDP rises, stocks rise but actual free market activity? Not so much

whazor 1y ago
Building physical data centres and GPUs will cost some real money.
- usrnm 1y ago
  GPUs aren't built in the US, though. I wonder, what percentage of all the stuff in a typical datacenter is actually made in the US
  - re-thc 1y ago
    > GPUs aren't built in the US, though. I wonder, what percentage of all the stuff in a typical datacenter is actually made in the US Does that matter? So many things these days aren't physically made in the US. So US companies don't get the profits and aren't needed? The actual "made in" part is a small fraction of the total earnings. See how much an iPhone costs to make vs how much it gets sold for.
    - usrnm 1y ago
      And now look at how making iPhones in China helped to grow the whole Chinese electronics industry, as opposed to inflating some virtual numbers for the US
      - Propelloni 1y ago
        And now look how the "virtual numbers" allow the USA to drag the rest of the world through the mud on a nosering. The USA was the winner in all this, but apparently the people don't feel it. What might have gone wrong? (hint: wealth distribution, not manufacturing)
        usrnm 1y ago
        Well, the US definitely is dragging the rest of the world, the question is where and whether it's somewhere the rest of the world really wants to go. I think, we'll see soon enough
      - re-thc 1y ago
        > helped to grow the whole Chinese electronics industry Why do you want it? It wouldn't have grown in the US. The protests would have erupted before anything happened. There's huge amounts of contamination, pollution, deaths, low wages, over-work, etc... Also US focused on designing the electronics and the ecosystem around it. Are you saying there's no industry around AMD, Broadcom, Qualcomm, etc that are fabless but hire vast amounts of people? > as opposed to inflating some virtual numbers for the US You have App Store / SaaS (i.e. developers) and a lot more. Would you prefer an average developer salary vs below-minimum US wage factory assembler?
      - hollerith 1y ago
        It's not just virtual numbers. Apple's investors and employees (mostly in California) keep about half of the price of every iPhone sold, which is more than people in China get or keep.
  - allie1 1y ago
    The margins collected by Nvidia end up in the US. And Nvidia and its employees get paid in the US. Only a small part of the revenue is outside the US.
- incognition 1y ago
  Wait till you learn about how the Fed creates money
ChadNauseam 1y ago
It just means that Nvidia is selling the chips for equity instead of selling them for cash. That difference does not turn it into an accounting trick
B-Con 1y ago
GDP is a known silly metric, but it's easy to define and measure, so we keep using it. I'm often reminded of the quote: "A man marries his housekeeper and that country’s GDP falls". GDP is uncomfortably linked to granularity of measurement as well as the number of times money changes hands to accomplish a task. Split a pipeline over more businesses boundaries and suddenly GDP is "bigger" despite no change in value or utility.
- csomar 1y ago
  GDP is not a silly metric, it measures economic activity that the government can tax; which is what matters to governments at the end of the day.
  - logicchains 1y ago
    That's not true; it also measures government spending (e.g. on building infrastructure), which cannot be taxed because it makes no sense for the government to tax its own spending. Gross Private Product is the GDP equivalent that only includes taxable (private) activity.
    - csomar 1y ago
      I am pretty sure government spending is taxed in most countries. Both companies and employees pay taxes. Maybe you meant government revenue? (but then that’s the tax itself!)
      - NoahZuniga 1y ago
        Yep, government employees still pay income tax, and government contractors pay taxes on profits.
      - dragonwriter 1y ago
        Some government spending is immune to some taxes which would otherwise be paid on similar private transactions (which taxes and transactions this applies to are different in different jurisdictions.)
imtringued 1y ago
They also spent a good chunk of that money on AMD stock, which is a trade that instantly became profitable the moment they announced it, without them ever doing anything.
aurareturn 1y ago
It isn't an accounting trick because the workers have to be paid and that money must be coming from somewhere. In this case, it is coming from investors like Microsoft, Softbank, Saudis, ChatGPT subscriptions, etc.

whazor 1y ago

Building physical data centres and GPUs will cost some real money.

usrnm 1y ago
GPUs aren't built in the US, though. I wonder, what percentage of all the stuff in a typical datacenter is actually made in the US
- re-thc 1y ago
  > GPUs aren't built in the US, though. I wonder, what percentage of all the stuff in a typical datacenter is actually made in the US Does that matter? So many things these days aren't physically made in the US. So US companies don't get the profits and aren't needed? The actual "made in" part is a small fraction of the total earnings. See how much an iPhone costs to make vs how much it gets sold for.
  - usrnm 1y ago
    And now look at how making iPhones in China helped to grow the whole Chinese electronics industry, as opposed to inflating some virtual numbers for the US
    - Propelloni 1y ago
      And now look how the "virtual numbers" allow the USA to drag the rest of the world through the mud on a nosering. The USA was the winner in all this, but apparently the people don't feel it. What might have gone wrong? (hint: wealth distribution, not manufacturing)
      - usrnm 1y ago
        Well, the US definitely is dragging the rest of the world, the question is where and whether it's somewhere the rest of the world really wants to go. I think, we'll see soon enough
    - re-thc 1y ago
      > helped to grow the whole Chinese electronics industry Why do you want it? It wouldn't have grown in the US. The protests would have erupted before anything happened. There's huge amounts of contamination, pollution, deaths, low wages, over-work, etc... Also US focused on designing the electronics and the ecosystem around it. Are you saying there's no industry around AMD, Broadcom, Qualcomm, etc that are fabless but hire vast amounts of people? > as opposed to inflating some virtual numbers for the US You have App Store / SaaS (i.e. developers) and a lot more. Would you prefer an average developer salary vs below-minimum US wage factory assembler?
    - hollerith 1y ago
      It's not just virtual numbers. Apple's investors and employees (mostly in California) keep about half of the price of every iPhone sold, which is more than people in China get or keep.
- allie1 1y ago
  The margins collected by Nvidia end up in the US. And Nvidia and its employees get paid in the US. Only a small part of the revenue is outside the US.
incognition 1y ago
Wait till you learn about how the Fed creates money

ChadNauseam 1y ago

It just means that Nvidia is selling the chips for equity instead of selling them for cash. That difference does not turn it into an accounting trick

B-Con 1y ago

GDP is a known silly metric, but it's easy to define and measure, so we keep using it. I'm often reminded of the quote: "A man marries his housekeeper and that country’s GDP falls". GDP is uncomfortably linked to granularity of measurement as well as the number of times money changes hands to accomplish a task. Split a pipeline over more businesses boundaries and suddenly GDP is "bigger" despite no change in value or utility.

csomar 1y ago
GDP is not a silly metric, it measures economic activity that the government can tax; which is what matters to governments at the end of the day.
- logicchains 1y ago
  That's not true; it also measures government spending (e.g. on building infrastructure), which cannot be taxed because it makes no sense for the government to tax its own spending. Gross Private Product is the GDP equivalent that only includes taxable (private) activity.
  - csomar 1y ago
    I am pretty sure government spending is taxed in most countries. Both companies and employees pay taxes. Maybe you meant government revenue? (but then that’s the tax itself!)
    - NoahZuniga 1y ago
      Yep, government employees still pay income tax, and government contractors pay taxes on profits.
    - dragonwriter 1y ago
      Some government spending is immune to some taxes which would otherwise be paid on similar private transactions (which taxes and transactions this applies to are different in different jurisdictions.)

imtringued 1y ago

They also spent a good chunk of that money on AMD stock, which is a trade that instantly became profitable the moment they announced it, without them ever doing anything.

aurareturn 1y ago

It isn't an accounting trick because the workers have to be paid and that money must be coming from somewhere. In this case, it is coming from investors like Microsoft, Softbank, Saudis, ChatGPT subscriptions, etc.