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America's future could hinge on whether AI slightly disappoints
- nemomarx 1y ago[flagged]
- Terr_ 1y agoIn any other decade, I'd scoff at the idea that widespread economic problems would be a net-benefit in averting something worse for the country. ... I miss those years.
- porkloin 1y ago> which cuts down on the risk of a trump 2028 run Ah, so I see we've entered the "normalizing the end of presidental term limits" part of the downward spiral. Maybe I need to accelerate my plans to get the fuck out of here.
- nemomarx 1y agoI mean he's selling the hats and I've seen some talking heads on the news say they'll look at ways for him to do it. The two term limit is a kinda recent precedent all things considered, so...
- furyofantares 1y agoI'm not sure how recent 1947 is? Kids would say it's 100 years ago, although the math obviously doesn't quite check out, we're getting there. Although I'd say precedent goes back to George Washington refusing a 3rd term.
- zacharycohn 1y agoI'm not sure I'd consider the 22nd amendment "kinda recent precedent."
- deleted 1y ago[deleted]
- umvi 1y agoAre there any bookies for that? Seems like an easy way to get rich betting against that happening. If not, then I would instead wager the "market sentiment" is that Trump isn't actually serious about a 2028 bid or that he won't actually be able to overcome 22A.
- johnfn 1y agoLooks like there's about 1M in volume on Polymarket, so you could definitely dump a good bit of money there if you feel strongly: https://polymarket.com/event/presidential-election-winner-2028 https://polymarket.com/event/presidential-election-winner-20...
- tsss 1y ago[flagged]
- amalcon 1y agoWe're already past the point where there is no meaningful notion of "normal" that actually impacts what happens in government. Normalizing things doesn't matter that much if people care so little that they elect someone who's done what Trump did his first time.
- Loughla 1y agoTrump cannot run again.
- Alive-in-2025 1y agoIt (was) also settled precedent that he can't stop spending money required to be spent by Congress (settled during Nixon's term), but the supremes decided it's different now. Same for firing heads of supposed independent federal departments, which was supposed to prevent presidential manipulation. And the s.c. created presidential immunity out of nothing. For now the president has unchecked power, the conservative dream of a unitary executive. This will all end when a Democrat is in power again. This is not a sarcastic exaggeration, one way they teed this up was shadow docket decisions like the Kavanaugh rule (ice can arrest/kidnap you based on appearance), it's not a precedent as shadow docket so they can reverse it any time.
- tsimionescu 1y agoYet.
- Terr_ 1y agoIn the normative sense of "another atrocity like this cannot occur", then yes. However your comment instead sounds like you are dismissing it as a non-concern... in which case I suggest you wake the heck up. We've had months now of seeing President and his cabinet actively and willfully breaking federal and Constitutional law, with the entire Republican legislature complicit. It wouldn't even the first time states tried to remove him from their ballots either. [0] [0] https://www.scotusblog.com/2024/03/supreme-court-rules-states-cannot-remove-trump-from-ballot-for-insurrection/ https://www.scotusblog.com/2024/03/supreme-court-rules-state...
- sumeno 1y agoHe can if SCOTUS says he can
- amalcon 1y agoTrump can do whatever nobody will stop him from doing. Who's going to stop him from running again?
- anthonypasq 1y agoboomers have already agreed multiple times this century that businesses are not allowed to go bankrupt in fear that their retirement portfolios may not be juiced to the gills. So instead we bail everyone out on the taxpayers dime and leave the debt for some poor schmuck in the future to figure out.
- tptacek 1y agoThis is hard-paywalled.
- themafia 1y ago> And yet despite those warning signs, there has been nothing even remotely resembling an economic crash yet. Well... define "economic crash." The outputs no longer correlate with the inputs. Is it possible it's "crashed" already? And is now running in a faulty state?
- BrenBarn 1y agoThis is how I'm starting to view many of these things. It's just that the metrics we use to evaluate the economy are getting out of sync. For instance, if "consumer sentiment is at Great Recession levels", why do we need some other indicator to accept that there's a problem? Isn't that a bad thing on its own?
- Herring 1y ago"Bad" is a judgment call. Trump approval ratings haven't dipped that far, so Congressional Republicans won't dare abandon him and there's not much political will for change. It might change if we get into millions of foreclosures like the great recession and the pain really hits home. From what I can tell right now they're in wartime mode where they just need to buckle down until Trump wins and makes other countries pay for tariffs or something.
- dfxm12 1y agoTrump only started at 49% approval rating and is currently at 40%. If you consider this as not having "dipped that far", it can only be because it was never high to begin with, although I think an 18% difference is significant. The economy is great for oligarchs, especially those close to Trump. Congressional politicians generally serve the same masters. Regular Americans do not feature into the equation. We will not as long as the same people are in power. Regular Americans are, of course, feeling it. One spot is at the supermarkets. Food prices are up month to month and particularly year over year (moreso than the historical average). https://news.gallup.com/poll/203198/presidential-approval-ratings-donald-trump.aspx https://news.gallup.com/poll/203198/presidential-approval-ra... https://www.ers.usda.gov/data-products/food-price-outlook/summary-findings https://www.ers.usda.gov/data-products/food-price-outlook/su...
- danans 1y agoEven in the unlikely event AI somehow delivers on its valuations and thereby doesn't disappoint, the implied negative externalities on the population (mass worker redundancy, inequality that makes even our current scenario look rosy, skyrocketing electricity costs) means that America's and the world's future looks like a rocky road.
- AznHisoka 1y agoYes, if AI proves to be a 10x productivity booster, it probably means most people will be unemployed
- conductr 1y agoAlso, what happens to those employed when they each have 10 people trying to take their job. It’s a downward spiral for employment as we know it.
- manmal 1y agoElectricity was a 10x productivity boost, just over a way longer timespan. We‘re just speedrunning this.
- polar8 1y agoThe plow was a 10x productivity booster. Guess what happened next?
- ljlolel 1y ago10X population?
- array_key_first 1y agoThe main difference is that a plow cannot replace a human because a plow is a machine operated by a human. The premise of AI is that it replaces humans. Even if AI creates, say, 200 million new jobs - you would just fill those jobs with AI. Why would you fill them with humans? That's stupid.
- OGEnthusiast 1y agoThe fact that this is even plausibly true means that the non-AI (and maybe even non-tech) American economy has been stagnating for years by now.
- klipt 1y agoThe tariff wars certainly didn't help.
- metalman 1y agodepends, on which side, of the tarrifs an economy happens to be and where, geopoliticaly. AI, or whatever a mountain of processors churning all of the worlds data will be called later, still has no use case, other than total domination, for which it has brought a kind of lame service to all of the totaly dependent go along to get along types, but nothing approaching an actual guaranteed answer for anything usefull and profitable, lame, lame, infinite fucking lame tedious shit that has prompted most people to.stop.even trying, and so a huge vast amount of genuine human inspiration and effort is gone
- more_corn 1y agoThe thing about tariffs is you’re guaranteed to be on both sides because the other side retaliates. Farmers get screwed twice because our tariffs increase the costs of their inputs and the retaliation reduces the value of outputs. If I was a farmer I’d be tearing my hair out about now.
- quantified 1y ago[flagged]
- jerlam 1y agoIn the last trade war (2017), the farmers got 18 billion dollars in bailouts. It's the same guy, so they're waiting again for their handouts.
- addisonj 1y agoI will repeat my comment from 70 days ago: > I was discussing with a friend that my biggest concern with AI right now is not that it isn't capable of doing things... but that we switched from research/academic mode to full value extraction so fast that we are way out over our skis in terms of what is being promised, which, in the realm of exciting new field of academic research is pretty low-stakes all things considered... to being terrifying when we bet policy and economics on it. That isn't overly prescient or anything... it feels like the alarm bells started a while ago... but wow the absolute "all in" of the bet is really starting to feel like there is no backup. With the cessation of EVs tax credits, the slowdown in infra spending, healthcare subsidies, etc, the portfolio of investment feels much less diverse... Especially compared to China, which has bets in so many verticals, battery tech, EVs, solar, then of course all the AI/chips/fabs. That isn't to say I don't think there are huge risks for China... but geez does it feel like the setup for a big shift in economic power especially with change in US foreign policy.
- klooney 1y ago> but geez does it feel like the setup for a big shift in economic power It happened ten years ago, it's just that perceptions haven't changed yet.
- matthewaveryusa 1y agoI'll offer two counter-points. Weak but worth mentioning. wrt China there's no value to extract by on-shoring manufacturing -- many verticals are simply uninvestable in the US because of labor costs and the gap of cost to manufacture is so large it's not even worth considering. I think there's a level of introspection the US needs to contend with, but that ship has sailed. We should be forward looking in what we can do outside of manufacturing. For AI, the pivot to profitability was indeed quick, but I don't think it's as bad as you may think. We're building the software infrastructure to accomodate LLMs into our work streams which makes everyone more efficient and productive. As foundational models progress, the infrastructure will reap the benefits a-la moore's law. I acknowledge that this is a bullish thesis but I'll tell you why I'm bullish: I'm basically a high-tech ludite -- the last piece of technology I adopted was google in 1996. I converted from vim to vscode + copilot (and now cursor.) because of LLMs -- that's how transformative this technology is.
- ChrisArchitect 1y agoJust repeating all the same links that are already being discussed around here for weeks. How the AI Bubble Will Pop https://news.ycombinator.com/item?id=45448199 https://news.ycombinator.com/item?id=45448199 America is now one big bet on AI https://news.ycombinator.com/item?id=45502706 https://news.ycombinator.com/item?id=45502706 Jeff Bezos says AI is in a bubble but society will get 'gigantic' benefits https://news.ycombinator.com/item?id=45464429 https://news.ycombinator.com/item?id=45464429 etc etc
- nisten 1y agoAt the end of the day, if you look at almost any government, roughly 2/3 of expenses go towards healthcare and education things which, AI worlkflow are very likely continue offsetting a larger and larger percentage of the costs on. Can we still have a financial crisis from all this investment going bust because it might take too long for it to make a difference in manufacturing enough automation hardware for everyone? Yes. But, the fundamentals are still there, parents will still send their kids to some type of school, and people will trade good in exchange for health services. That's not going to change. Neither will the need to use robots in nursing homes, I think that assumption is safe to make. What's difficult to predict change in is adoption in manufacturing, and repairs ( be that repairing bridges or repairing your espresso machine ) because that is more of a "3D" issue and hard to automate reliably (think about how many gpus today would it actually take to get a robot to reason out and repair a whole in your drywall), given that your RL environments and training data needs grow exponentially. Technically, your phone should have enough gpu performance to do your taxes with a 3B model and a bunch of tools, eventually it'll even be better than you at it. But to tun an actual robot with multiple cameras and stuff doing troubleshooting and decision making.... you're gonna need a whole 8x rack of gpus for that. And that's what makes it now difficult to predict what's going to happen. The areas under the curve can vary widely. We could get a 1B AGI model in 6 months, or it could take 5 years for agentic workflows to fully automate everyones taxes and actually replace 2/3 of radiology work... Either way, while theres a significant chance of this transition to the automation age being rough, I am overall quite optimistic given the fundamentals of what governments actually spend majority of their money on.
- senderista 1y agoFor the vast majority of US taxpayers, automating their taxes is feasible right now and the obstacles are political not technical.
- autoexec 1y agoI wouldn't even call it political. It's financial, and should be criminal. The people who are elected to represent us are just taking bribes and being paid off to allow corporations to screw us over.
- legitster 1y agoAnecdotally, our company's next couple quarters are projected to be a bloodbath. Spending is down everywhere, nearly all of our customers are pushing for huge cuts to their contracts, and in turn literally any costs we can jettison to keep jobs is being pushed through. We're hearing the same from our customers. AI has been the only new investment our company has made (half hearted at that). I definitely get the sense that everyone pretending things are fine to investors, meanwhile they are playing musical chairs. Back in my economics classes at college, a professor pointed out that a stock market can go up for two reasons: On one hand, the economy is legitimately growing and shares are becoming more valuable. But on the other hand, people and corporations could be cutting spending en masse so there's extra cash to flood the stock markets and drive up prices regardless of future earnings.
- BJones12 1y ago> Back in my economics classes at college, a professor pointed out that a stock market can go up for two reasons Reason #1 is lower interest rates, which increase the present value of future cash flows in DCF models. A professor who does not mention that does not know what they are talking about.
- topaz0 1y agoThat's a subset of "shares becoming more valuable"
- lotsofpulp 1y agoNot in the way legitser wrote: >On one hand, the economy is legitimately growing and shares are becoming more valuable The implication here is that output and productivity is growing. Not that money is becoming less valuable. A more precise term than “valuable” is purchasing power. Are Americans gaining purchasing power? Not really, because equity gains are being cancelled out by currency losses, if you’re an American that is lucky enough to even own significant equity.
- gehwartzen 1y ago
- coldtea 1y ago[flagged]
- pdayton 1y ago> In those intervening years, a bunch of AI companies might be unable to pay back their debts. Dumb question: isn't a lot of the current investment in the form of equity deals and/or funded by existing tech company profit lines? What do we actually know about the debt levels and schedules of the various actors?
- dfedbeef 1y agoWe'll find out
- wmf 1y agoGoogle, Meta, and Microsoft are funding AI out of their existing profits so they will probably be fine. The others may be getting GPUs in exchange for equity but they still have to pay real money for the datacenters, generators, etc. That real money is borrowed and they would default in case of a crash. Potentially hundreds of billions of defaults.
- hollerith 1y agoHuh? Surely most of the investment in AI labs is equity investment, not debt (so it can't be defaulted on).
- wmf 1y agoThe latest xAI GPU SPV is 2/3 debt; maybe that's a trend or maybe not. The debt will be defaulted and the equity will be recapitalized to almost nothing. Same outcome.
- hollerith 1y agoThat is interesting because bubble debt is a lot more hazardous and more likely to cause a recession than bubble equity is, hence all the rules on lenders around Capital Adequacy, Liquidity, and Risk Management/Supervision for which no analog exists for equity investors.
- 827a 1y agoReminder: If you're going to feel doomer about how tech capex represents like nn% of US GDP growth, you should do some research into what percentage of US GDP growth, especially since 2020, has been the result of government printing. Arguably, our GDP growth right now is more "real" than the historical GDP growth numbers between 2020-2023, but all of it is so warped by policy that its hard to tell what's going on. We're in extremely unprecedented times. Sometimes maybe good, sometimes maybe shit. The old rules don't apply. Etc.
- itsnowandnever 1y agoseparate from this article, I don't have a very high opinion of the author. he has an astonishing record of being uninformed and/or just plain wrong in everything I've ever heard him write about. but as far as this article, the "tech capex as a percentage of GDP growth" is an incredible cherrypicking of statistics to create a narrative... when tech became a boodbath starting in 2022, the rest of the economy continued on strong. all the way until 2025, the rest of the economy was booming while tech layoffs and budget cuts after covid were exploding. so starting that chart in early 2023 when tech had bottomed out (compared to the rest of the economy) is misleading. tech capex as a percentage of the overall GDP has been consistently rising since 2010 - https://gqg.com/highchartal-paper-large-tech-capex-spend-as-of-us-gdp/ https://gqg.com/highchartal-paper-large-tech-capex-spend-as-... this is obviously related to the advent of public cloud computing more than anything. why this chart appears to clash with the author's chart is the author's chart specifically calls out just percentage of GDP growth, not overall GDP. so the natural conclusion is that while tech has been in borderline recessionary conditions since 2022, it is now becoming stable (if not recovering) while the rest of the economy that didn't have the post-covid pullback (nor the same boom during covid, of course) is now having issues largely due to geopolitics and global trade. is there an AI bubble? who cares. it's not as meaningful to the broader economy as these cherrypicking stats imply. if it's a bubble, it represents maybe .3% of the GDP. no one would be screaming from the mountain tops about a shaky economy and a bubble if that same .3% was represented by a bubble in the restaurant industry or manufacturing. in fact, in recent years, those industries DID have inflationary bubbles and it was treated like a positive thing for the most part. I think a lot of this overanalysis and prodding for flaws in tech is generally an attempt at schadenfreude hoping that tech becomes just another industry like carpentry or plumbing. in particular, hoping for a scenario where tech is not as culturally impactful as it is today. because people are worried and frustrated about the economy, don't understand the value of tech, and hope it stops sucking up so much funding and focus by society in general. they're not 100% wrong in being untrusting or skeptical of tech. the tech industry hasn't always been the best steward of the wealth and power it possesses. but they are generally wrong about valuations or impact of tech on the economy. like the people spending all this money are clueless. the stock market fell 900 points on friday, wiping out over $1 trillion in value over the course of a couple hours. yet the hundreds of billions invested in datacenters is a sign of impending economic doom. is the economy good? I don't think it's doing great. but it has little to do with AI one way or another. "AI" is just another trend of making technology more accessible to the masses. no more scarier, complicated, or impactful than microcomputers, DSL, cellular phones, or youtube. and while the economy crashed in 2008, youtube and facebook did well. yet there was none of this dooming about tech specifically at the time simply because the tech industry wasn't as controversial at the time.
- gdulli 1y ago[flagged]
- Mallowram 1y ago[dead]
- deleted 1y ago[deleted]
- ciconia 1y agoI think if there's a rational reasoning behind Trump unleashing ICE and the national guard on the domestic population, this must be it: "the economy is doing really bad, and we need a smokescreen so people won't talk about it."
- rf15 1y agoHmmm kinda ties into the whole problem of well-off/happy people not being particularly eager to chant "foreigners out", but when they're desperate they take any explanation for their misery they can get their hands on that sounds workable (because, no, you can't go up to a billionaire and just "take all their stuff", but you CAN beat up a foreigner or other disadvantaged person that is worse off than you)
- myrmidon 1y agoI think another reason for the recent global rise of anti-immigration parties is also that the relative economic value of immigrants (as unskilled labor) has gone down, and the "costs" (cultural/language friction) have become more visible.
- scns 1y ago> the relative economic value of immigrants (as unskilled labor) has gone down As in "farmers don't find people to do the work (il)legal immigrants did" down?
- myrmidon 1y agoThis does not really conflict with my point. Declining number of workers in farming are also a factor, but I'm thinking more construction/heavy industry. It used to be extremely economical to import workers and use them to grow local industry: It does not only save you the cost of educating them, but also the productivity loss on the parents side. It was a huge economical boost, and pretty much a win-win situation all around (exact same thing happened in other countries, like Germany). But the situation changed, and the same influx of workers to build and staff fields and factories is no longer as helpful; the main current/future need has shifted towards nursing/caretaking, and in that sector its much more about meeting demand cost effectively than fueling growth: The median age citizen does not benefit from more/cheaper nurses to the same degree than they did from a growing economy/industry half a century ago.
- Bjorkbat 1y agoOne of my most frustrating things regarding the potential of an AI bubble was some very smart and intelligent researcher being incredibly bullish on AI on Twitter because if you extrapolate graphs measuring AI's ability to complete long-duration tasks (https://metr.org/blog/2025-03-19-measuring-ai-ability-to-complete-long-tasks/ https://metr.org/blog/2025-03-19-measuring-ai-ability-to-com...) or other benchmarks then by 2026 or 2027 then you've basically invented AGI. I'm going to take his statements at face value and assume that he really does have faith in his own predictions and isn't trying to fleece us. My gripe with this statement is that this prediction is based on proxies for capability that aren't particularly reliable. To elaborate, the latest frontier models score something like 65% on SWE-bench, but I don't think they're as capable as a human that also scored 65%. That isn't to say that they're incapable, but just that they aren't as capable as an equivalent human. I think there's a very real chance that a model absolutely crushes the SWE-bench benchmark but still isn't quite ready to function as an independent software engineering agent. So a lot of this bullishness basically hinges on the idea that if you extrapolate some line on a graph into the future, then by next year or the year after all white-collar work can be automated. Terrifying as that is, this all hinges on the idea that these graphs, these benchmarks, are good proxies. And if they aren't, oh wow.
- ludicrousdispla 1y ago>> by next year or the year after all white-collar work can be automated Work generates work. If you remove the need for 50% of the work then a significant amount of the remaining work never needs to be done. It just doesn't appear. The software that is used by people in their jobs will no longer be needed if those people aren't hired to do their jobs. There goes Slack, Teams, GitHub, Zoom, Powerpoint, Excel, whatever... And if the software isn't needed then it doesn't need to be written, by either a person or an AI. So any need for AI Coders shrinks considerably.
- twothreeone 1y agoYou mean Julian Schrittwieser (collaborator on AlphaGo and first author on MuZero)? https://www.julian.ac/blog/2025/09/27/failing-to-understand-the-exponential-again https://www.julian.ac/blog/2025/09/27/failing-to-understand-...
- atleastoptimal 1y agoUS uniquely is suited to maximally benefit startups emerging in a new space, but maximally prevent startups entering a mature space. No smart, young person in the US matriculates into industries paved over by incumbents as they wisely anticipate that they will be in an industry deliberately hamstrung by regulatory capture. All growth is in AI now because that's where all the smartest people are going. If AI were regulated significantly, they'd go to other industries and they would be growing faster (though not as much likely) However there is the broader point that AI is poised offer extreme leverage to those who win the AGI race, justifying capex spending on such absurd margins.
- cadamsdotcom 1y agoInteresting. Are you advocating for deregulation? What do you think it should look like to encourage the next generation into more industries?
- atleastoptimal 1y agoI think there should be regulation that protects individuals and limits the power of incumbents. There are many regulations that ostensibly protect individuals but only exist to empower incumbents.
- rudolph9 1y agoI can’t help but think a lot of these comments are actually written by AI — and that, in itself, showcases the value of AI. The fact that all of these comments could realistically have been written by AI with what’s available today is mind-blowing. I use AI on a day-to-day basis, and by my best estimates, I’m doing the work of three to four people as a result of AI — not because I necessarily write code faster, but because I cover more breadth (front end, back end, DevOps, security) and make better engineering decisions with a smaller team. I think the true value of AI, at least in the immediate future, lies in helping us solve common problems faster. Though it’s not yet independently doing much, the most relevant expression I can think of is: “Those who cannot do, teach.” And AI is definitely good at relaying existing knowledge.
- spaceman_2020 1y agoWhat exactly is the utility of AI writing comments that seem indistinguishable from people? What is the economic value of a comment or an article? At present rate, there is a good argument to be made that the economic value is teetering towards negative A comment on a post or an article on the internet has value ONLY if there are real people at the other end of the screen reading it and getting influenced by it But if you flood the internet with AI slop comments and articles, can you be 100% sure that all the current users of your app will stick around? If there are no people to read your articles, your article has zero economic value
- gnepon 1y agoPerhaps economic value can come from a more educated and skilled workforce if they're using AI for private tuition (if it can write as well as us, it can provide a bespoke syllabus, feedback etc.) Automation over teaching sounds terrible in the long run, but I could see why learning languages and skills could improve productivity. The "issue" might be here that there's more to gain in developing nations with poor education standards, and so while capital concentrates more to the US because they own the tech, geographical differences in labour productivity reduces.
- rudolph9 1y agoWhat is the economic value of a wheel? If we flood the market with wheels, we’re going to need far fewer sleds and horses. Pretty soon, no one might need horses at all — can you imagine that?
- Nio1024 1y agoGotta thank AI — it’s keeping my portfolio from collapsing, at least for now . But yeah, I totally see the point: AI investment might be one of the few things holding up the U.S. economy, and it doesn’t even have to fail spectacularly to cause trouble. Even a “slightly disappointing” AI wave could ripple across markets and policy.
- throw-10-13 1y agoDont forget to factor in the 10% haircut the USD has taken since last November.
- kragen 1y agoThis might be a good time to reduce your exposure to the stock market?
- bemmu 1y agoI wonder what would be a good counter-investment if one thinks AI is in a bubble which is just about to burst. Maybe consumer staples (Walmart, Pepsi etc.)? Dollar stores?
- kragen 1y agoA diplomatic passport from a third-world country? ;-) Seriously, if the stock market is going to plunge, Pepsi stock is also going to plunge. The simplest way to reduce your exposure to the stock market is to shift assets toward cash: sell shares, keep dollars, maybe in the money market rather than just as cash. Dollars are exposed to the risk of inflation (hyperinflation hasn't happened yet in the US but it's so common that https://en.wikipedia.org/wiki/Hyperinflation https://en.wikipedia.org/wiki/Hyperinflation doesn't even attempt to list all historical episodes of hyperinflation, just dozens of notable ones) so investors commonly try to move to metals to balance that risk. Cryptocurrencies have emerged as an alternative, and they have the advantage of being more portable in emergency evacuation situations.
- 1y ago
- feverzsj 1y agoIsn't Trump a much bigger problem?
- quantum_state 1y ago“Election has consequences.” … Managing a country is a big and critical job. Hard to imagine it was handed over to a bunch of people who barely qualified and hardly care about the future of America.
- DaSHacka 1y agoSeems there was a typo, I think you meant to say "hard to imagine it almost was"?
- grumple 1y ago> more than a fifth of the entire S&P 500 market cap is now just three companies — Nvidia, Microsoft, and Apple — two of which are basically big bets on AI. These 3 companies have been heavyweights since long before AI. Before AI, you couldn't get Nvidia cards due to crypto, or gaming. Apple is barely investing in AI. Microsoft has been the most important enterprise tech company for my entire lifetime.
- deleted 1y ago[deleted]
- famouswaffles 1y agoYou cannot really compare Nvidia pre AI profit and market cap. As 'far' back as 2023, Nvidia was ~$15 usd per share. Microsoft's share price has more than doubled since 2023.
- topaz0 1y agoNvidia market cap has increased about 10x since the crypto-shortage years. It wasn't small before, but there's a big difference between ~1% of the market and ~10% of the market in terms of systemic risk. Also, as of last year about 80% of their revenues were from data center GPUs designed specifically for "AI", and that's undoubtedly continuing to grow as a share of their revenues.
- tclancy 1y agoYou’re missing the point. Whether one buys it or not to one side, the author is saying those companies, whatever their history have pushed a significant amount of their … chips into a bet on AI.
- HardwareLust 1y agoI don't know about you, but it seems to me "AI" is already slightly disappointing to put it mildly.
- 9999_points 1y agoThere is only so much juice you can squeeze out of fuzzy probability word chains. We hit peak diminishing returns on LLM tech already.
- linovaSector 1y agoBetting everything on AI is like putting all your eggs in a robot's basket.
- gaoshan 1y agoI think that this concern is valid but there are deeper more foundational issues facing the US that have led to the sum of the issues mentioned in the post. We can say that if this rotten support beam fails the US is in trouble but the real issue is what caused the rot in the first place.
- thesmtsolver 1y agoWhat are these foundational issues? Whatever issues are there, I feel they are more in other big economies. Remember, when a bear is chasing you and some others, you don't have to be faster than the bear to escape.
- jddj 1y agoI don't understand the metaphor in this case. If there's another European debt crisis (for example) does the bear eat Europe and any US issues go away?
- ben_w 1y agoI think a better metaphor for interconnected economies is that of chains always breaking at their weakest link. Sure, well done, your link in the chain didn't break… but your anchor is still stuck on the bottom of the ocean and you're on your spare anchor (with a shorter chain) until you get back to harbour.
- Supermancho 1y ago> What are these foundational issues? The effective removal of regulations via winner bribes and a lack of enforcement plus the explicit removal of regulations, to reduce corruption and insider trading. AI is not required to create the systemic exploitations and they are far more efficient at extracting value than any AI system.
- deeth_starr_v 1y agoWhat is the quote, “the second phase of bubbles is the financialization”
- jayd16 1y agoIt feels like the only other big near term tech bet is Meta and their glasses. It would be pretty fun to see AI fizzle and AR glasses take off. Not a huge zuck/Meta fan but I really do appreciate the actual big bet on something else.
- overfeed 1y agoWaymo is a pretty big bet. though it wouldn't be fun if unemployed people were to fall back to being Uber/Lyft drivers, but get outcompeted by AI cars.
- jayd16 1y agoTrue true. Forgot about Waymo!
- aesbetic 1y agoBruh they are literally called “AI glasses”. If it succeeds, it’s a success for AI.
- ponector 1y agoThere are AI dishwasher, AI washing machine you can buy today. Is it a success for AI?
- somanyphotons 1y agoWhile the current iteration isn't enough to make me wear it constantly, if there's steady improvements for 5/10 years it could really go somewhere
- truelson 1y agoDon't use P/E as an estimate of a bubble... profits often mean revert. Use something closer to market value to GDP (with some adjustments). That is a much better estimate. John Hussman has imo the best of such metrics. Here's his thoughts from August: https://www.hussmanfunds.com/comment/mc250814/ https://www.hussmanfunds.com/comment/mc250814/ And this image says a lot: https://www.hussmanfunds.com/wp-content/uploads/comment/mc250814a.png https://www.hussmanfunds.com/wp-content/uploads/comment/mc25... Yes. A lot now depends on when "growth" stops. But GDP is very hard to grow at an sustained high rate justifying higher valuations. Even through industrial revolutions, assembly lines, transistors, and the internet.
- kazinator 1y agoYou cannot eat output tokens, house or clothe yourself inside them, nor burn them to keep warm or generate locomotion. Present language model AI is utterly incapable of being a prime economic driver.
- tracker1 1y agoBorrowing money got expensive... the Fed rate is largely responsible for that and there's been a big push to adjust it. As it stands, during and since COVID a lot of people maxed out their credit, or significantly increased their debt for a number of reasons, from home/household needs during the shutdowns to increased cost of living (starting with overpriced groceries). This has taken an effect. A lot of people are strapped and no longer participating in larger purchases beyond the basic needs as just those have gone up in price so much relatively to income. Initially a lot of it was just greed and taking advantage of the pandemic as an excuse, now people are genuinely stretched thin.
- IAmGraydon 1y agoThe question is this: At what point will the market and economy stop looking forward at what AI promises to do and start looking backwards at what it has done? We’ve had this technology for three years and what it has done for us amounts to very little more than pollute every form of communication with low value, mass produced drivel and destroyed the ability of teachers to evaluate their students. We have no new medicine, no new math, no new physics in any meaningful way. Yet all eyes are still on the carrot that we’ll never reach: AGI. When will we realize that even the name itself, artificial intelligence, is a lie? It’s just a database of most human knowledge with a very intuitive human language interface, but knowledge and intelligence are not the same thing. At some point, the world will be forced to acknowledge what little it has received in return for its misplaced faith.
- realaaa 1y agothat's in any case not good, if so much depends on AI in peoples minds, what about other sectors ..