4 ms·

The real issue IMO is that is not really what Anthropic and OpenAI are operating on. That is the after the fact justification of the AGI dollar auction. Each r

The real issue IMO is that is not really what Anthropic and OpenAI are operating on. That is the after the fact justification of the AGI dollar auction. Each round is kind of 3x the previous cost and neither can really stop because second place in the dollar auction is so much worse than winning. The only way to stop the auction is one bidder hits a hard budget constraint, both agree to stop, or an outside party breaks the auction. IMO this is why they want to slow down or have regulation. I think this is also why we see some claims of already reaching "AGI". The TAM of global knowledge work is just a narrative tacked on after the fact to justify the AGI dollar auction. The economic fallacy here with the actual valuation is akin to pricing the electric utilities 120+ years ago as some % of the future cash flow of global food production. Take the TAM of global food production and then work back to what % will the electric utilities capture from the advances in the automation of farming? It is nonsense. The only narrative that actually justifies the capex spend that I can figure out is a first mover AGI monopoly. Even the oligopoly case is hard to justify the capex spend IMO. There is this enormous mismatch between the AGI monopoly and the actual rolling 12-month window of pricing power. Even the rolling 12-month window of pricing power is going to saturate well before AGI too so it is hard to see how any of this makes economic sense.

keeda 16d ago
Could you say more about the AGI dollar auction? Is that something investors are actually thinking about, or a metaphor for what's happening? From what I've read so far, while AGI is definitely a well-known concept, investors are not really banking on it. FWIW even without AGI there are indications that all this CapEx spend, even with very shallow adoption, is boosting national labor productivity by 1.3%. That is worth ~$123B based on total wages paid in the US alone: https://news.ycombinator.com/item?id=49721338 https://news.ycombinator.com/item?id=49721338 As such I don't see the need for AGI for any of this to be financially viable. Whether it is economically and socially viable... that's where I have grave doubts. But Capitalism really only focuses on the former and not the latter, which is why this will keep getting pushed forward. And that is the crux of the problem.

keeda 16d ago

Could you say more about the AGI dollar auction? Is that something investors are actually thinking about, or a metaphor for what's happening? From what I've read so far, while AGI is definitely a well-known concept, investors are not really banking on it. FWIW even without AGI there are indications that all this CapEx spend, even with very shallow adoption, is boosting national labor productivity by 1.3%. That is worth ~$123B based on total wages paid in the US alone: https://news.ycombinator.com/item?id=49721338 https://news.ycombinator.com/item?id=49721338 As such I don't see the need for AGI for any of this to be financially viable. Whether it is economically and socially viable... that's where I have grave doubts. But Capitalism really only focuses on the former and not the latter, which is why this will keep getting pushed forward. And that is the crux of the problem.