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There was an interesting take on it on youtube today, Bill Gurley (VC) talking to Tim Ferris (interviewer) on if it's a bubble, based on some research: > ...ev

by tim333 11mo ago

There was an interesting take on it on youtube today, Bill Gurley (VC) talking to Tim Ferris (interviewer) on if it's a bubble, based on some research: > ...every time there's been a technology wave that leads to wealth creation, especially fast wealth creation, that will inherently invite speculators, carpetbaggers, interlopers that want to come take advantage of it. Think of the gold rush, you know, and so people want to make it a debate. Do you believe in AI or is it a bubble? And if you say you think it's a bubble, they say, "Oh, you don't believe in AI." Like this gotcha kind of thing. And if you study Perez, and I I think this is absolutely correct. If the wave is real, then you're going to have bubble-like behavior. like they come together as a pair precisely because anytime there's very quick wealth creation, you're going to get a lot of people that want to come try and take advantage of that. Seems about right to me. https://youtu.be/D0230eZsRFw https://youtu.be/D0230eZsRFw

camgunz 10mo ago
Yeah but the thing that distinguishes the gold rush from mesmerism or whatever is actual gold. Most LLM promises are NFTs with extra steps. The arguments here are totally bonkers. People didn't wonder what airplanes were for, or cars, or computers, or vaccines. They had immediate, obvious benefits and uses, but still none of them experienced this speed of investment. This is something else entirely.
- tim333 10mo ago
  I'm pretty sure AI is a real thing. Sure some arguments are bonkers but there's a lot of real stuff happening like Waymos, Claude code, AlphaFold, MuZero and the like. Of those only Claude is really a language model. Skeptics get over hung up on the limits of language models - they are not the only AI. There was some puzzlement as to what computers were for. See: >Thomas J. Watson, the chairman of IBM in 1943, who purportedly said, "I think there is a world market for maybe five computers Also the speed of investment isn't unprecedented - the railway boom was much larger as a percent of gdp.
  - camgunz 10mo ago
    Well the other models are even less useful so I try and stick with the steelman version of these things. That IBM quote isn't ambiguity about what computers are for, but about who can afford them in their current, highly bespoke state. Finally, the railway boom wasn't $1.5 trillion in a few years. Also, again, we knew what railroads were for. I'm not saying the tech isn't impressive. I'm impressed! Cursor bugbot has found some pretty gnarly bugs in my code, blessedly. But it's neither reliable nor economically viable, even if you don't think they owe anyone anything for training on their data (I do think they owe us).
    - tim333 10mo ago
      >During the 19th-century "Railway Mania," railroad investment in the U.S. reached a peak of 6.0% of GDP, a level significantly higher than current AI infrastructure spending, which is estimated to be around 1.6% of U.S. GDP. says Google. There was a big crash after, wiping out investors. Time will tell with this one.
      - camgunz 10mo ago
        Again though, it's about time
      - tripletao 10mo ago
        I spent some time looking for sources for the various "railroad investment as % of GDP" numbers floating around, and I don't think they're very good. The modern concept of GDP didn't even exist back then, so the denominator is calculated in retrospect from the limited contemporary data. The numerator is more confident, but the papers I found mostly showed closer to 3%. A pretty wide range is at least defensible though, and I guess VCs are comparing against the high end for obvious reasons. https://news.ycombinator.com/item?id=44805979 https://news.ycombinator.com/item?id=44805979 This AI investment is interesting because it's mostly not in durable goods, unlike the railroad's rails and (most importantly) land. The buildings and power infrastructure for the datacenters could retain value for decades, but the servers won't unless something goes badly wrong. I believe this is the largest investment in human history justified primarily by the anticipated value of intellectual property.

by tim333 11mo ago

camgunz 10mo ago

Yeah but the thing that distinguishes the gold rush from mesmerism or whatever is actual gold. Most LLM promises are NFTs with extra steps. The arguments here are totally bonkers. People didn't wonder what airplanes were for, or cars, or computers, or vaccines. They had immediate, obvious benefits and uses, but still none of them experienced this speed of investment. This is something else entirely.

tim333 10mo ago
I'm pretty sure AI is a real thing. Sure some arguments are bonkers but there's a lot of real stuff happening like Waymos, Claude code, AlphaFold, MuZero and the like. Of those only Claude is really a language model. Skeptics get over hung up on the limits of language models - they are not the only AI. There was some puzzlement as to what computers were for. See: >Thomas J. Watson, the chairman of IBM in 1943, who purportedly said, "I think there is a world market for maybe five computers Also the speed of investment isn't unprecedented - the railway boom was much larger as a percent of gdp.
- camgunz 10mo ago
  Well the other models are even less useful so I try and stick with the steelman version of these things. That IBM quote isn't ambiguity about what computers are for, but about who can afford them in their current, highly bespoke state. Finally, the railway boom wasn't $1.5 trillion in a few years. Also, again, we knew what railroads were for. I'm not saying the tech isn't impressive. I'm impressed! Cursor bugbot has found some pretty gnarly bugs in my code, blessedly. But it's neither reliable nor economically viable, even if you don't think they owe anyone anything for training on their data (I do think they owe us).
  - tim333 10mo ago
    >During the 19th-century "Railway Mania," railroad investment in the U.S. reached a peak of 6.0% of GDP, a level significantly higher than current AI infrastructure spending, which is estimated to be around 1.6% of U.S. GDP. says Google. There was a big crash after, wiping out investors. Time will tell with this one.
    - camgunz 10mo ago
      Again though, it's about time
    - tripletao 10mo ago
      I spent some time looking for sources for the various "railroad investment as % of GDP" numbers floating around, and I don't think they're very good. The modern concept of GDP didn't even exist back then, so the denominator is calculated in retrospect from the limited contemporary data. The numerator is more confident, but the papers I found mostly showed closer to 3%. A pretty wide range is at least defensible though, and I guess VCs are comparing against the high end for obvious reasons. https://news.ycombinator.com/item?id=44805979 https://news.ycombinator.com/item?id=44805979 This AI investment is interesting because it's mostly not in durable goods, unlike the railroad's rails and (most importantly) land. The buildings and power infrastructure for the datacenters could retain value for decades, but the servers won't unless something goes badly wrong. I believe this is the largest investment in human history justified primarily by the anticipated value of intellectual property.