3 ms·

They probably weren't expecting AI foundation models / model research to be quite as fungible as they are

safety1st 5d ago
Yes. Over the last 20 years the economy has become dysfunctional. It no longer really resembles a free market; monopolies have established barriers to entry everywhere. And the biggest investors are awash with helicopter money that's been doled out for favors by the political class. So those investors have tons of cash to burn and surprisingly few opportunities. Even within Silicon Valley/VC there are surprisingly few who seem to really understand the fundamental economics of software. Or perhaps those economics just aren't that important when you have billions of dollars on hand and cash is obviously not going to get you a return. Any whisper of possible exponential growth is worth throwing money at. Crypto? Why not. AI? Why not. Datacenters? Why not. Tulips? Why not. This is by all definitions an empire in decline. Everything is broken or fake. Everyone is afraid to do what needs to be done. Power forbids it. So we're all just waiting for the other shoe to drop. Our secret police aren't as bad as the late stage USSR's yet, but hold Uncle Sam's beer... (That's not a recommendation to try and time the nadir, by the way, as it could easily be 50 years away.)
- piva00 5d ago
  It started way before the last 20 years, the past 40 years have created the conditions for this to happen. Overfinancialisation of the economy while removing safeguards to keep markets functional, like anti-trust enforcement, are the main forces behind this erosion. Through finance the focus of companies is completely shifted away from producing good products and services, and into how to extract more paper wealth from existing structures to the detriment of products. Not enforcing anti-trust and letting behemoths to form which cannot be competed against since with their amount of capital they can either buy their competition outright or just price dump for long enough to make competition non-viable. It's the failure of neoliberalism, and that agenda has been pushed into Western countries since the 1980s-1990s, it made enormous wealth for the few at the top while eroding whole societies, economically and socially, it's all dysfunctional.
  - odo1242 5d ago
    I feel like my point is being over extrapolated a bit. All I was saying is that people in 2020 believed AI companies had much more of a moat then they actually do - that other companies would struggle to obtain enough data (y’know, downloading the internet to train models wasn’t legal back then) or resources to compete
    - piva00 5d ago
      I replied to the extrapolation, not to your comment directly, I think your point might be more fitting under that comment than mine, I just drilled down from the points above mine.
- user43928 5d ago
  Datacenters and AI obviously work and come with a credible value proposition and path to profitability. Comparing this to crypto or turnips makes me doubt the merit of any other opinions your comment offers.
  - pixl97 5d ago
    The initial growth of the internet was a boom bust cycle, and as you see the internet is still here. This is more about the economic paradigm that is being used to grow a technology versus the economic paradigm the technologies rate of growth can support over time. Just to give some rough numbers in the past 5 years the amount of GPU compute installed in FLOPS is somewhere over 5 times all the CPU flops that have ever existed. This has nothing to do with AI being good or bad or being able to produce things and economic value. It is by far the largest and fastest growth of any technology ever and we have zero clue about the economic stability of this grand experiment we're performing.
    - user43928 5d ago
      The internet is a much more appropriate comparison than crypto or tulips, which bring no or negligible value. Some differences to the market at that time seems to be that during the dotcom bubble, many of the companies had little to no revenue. Leading AI labs already generate enormous revenue. The investments into capacity are needed to address the current demand. The situation seems somewhat less speculative. That said, I cannot predict how AI capabilities will develop and how demand will respond. Should capabilities plateau hard and soon, maybe the demand will not be there for the compute investments. If it does not, and instead AI applications in robotics, science, and self driving expand, chances seem reasonably good that the demand will be there, no? And as for the economic stability, much of the investment comes from existing giants like Microsoft, Alphabet, Amazon, and Meta, who have the necessary cash flow. These companies are less likely to collapse than some of the ones during the dotcom bubble.
      - pixl97 5d ago
        Eh, I'd say it's closer to something like internet + tulips. It's the total amount of money in the economy that's been invested toward a potential outcome. AI represents the largest amount of money, and largest fractional part of the economy invested ever. Because of this AI could be the biggest economic boon ever, yet still not recover the full amount invested. This will have deep economic impacts that affect everyone and everything. At this point AI must achieve all its stated economic impacts or there will still be a huge economic crash that kills off any company that is over invested and cannot make a profit. Worse, the many of the perceived economic impacts of AI are not for humans like you or I, but the huge companies you listed. Even if they economically win, everyone else made out of meat could still lose. They say history doesn't repeat, but it does rhyme. This, at least to me, sounds like a mixtape of "internet" + "tulips" + "1920s financial world leading to global political instability". Every potential outcome I see occurring pushes us closer to further instability, even if the economics on it work out on paper.

Yes. Over the last 20 years the economy has become dysfunctional. It no longer really resembles a free market; monopolies have established barriers to entry everywhere. And the biggest investors are awash with helicopter money that's been doled out for favors by the political class. So those investors have tons of cash to burn and surprisingly few opportunities. Even within Silicon Valley/VC there are surprisingly few who seem to really understand the fundamental economics of software. Or perhaps those economics just aren't that important when you have billions of dollars on hand and cash is obviously not going to get you a return. Any whisper of possible exponential growth is worth throwing money at. Crypto? Why not. AI? Why not. Datacenters? Why not. Tulips? Why not. This is by all definitions an empire in decline. Everything is broken or fake. Everyone is afraid to do what needs to be done. Power forbids it. So we're all just waiting for the other shoe to drop. Our secret police aren't as bad as the late stage USSR's yet, but hold Uncle Sam's beer... (That's not a recommendation to try and time the nadir, by the way, as it could easily be 50 years away.)

piva00 5d ago
It started way before the last 20 years, the past 40 years have created the conditions for this to happen. Overfinancialisation of the economy while removing safeguards to keep markets functional, like anti-trust enforcement, are the main forces behind this erosion. Through finance the focus of companies is completely shifted away from producing good products and services, and into how to extract more paper wealth from existing structures to the detriment of products. Not enforcing anti-trust and letting behemoths to form which cannot be competed against since with their amount of capital they can either buy their competition outright or just price dump for long enough to make competition non-viable. It's the failure of neoliberalism, and that agenda has been pushed into Western countries since the 1980s-1990s, it made enormous wealth for the few at the top while eroding whole societies, economically and socially, it's all dysfunctional.
- odo1242 5d ago
  I feel like my point is being over extrapolated a bit. All I was saying is that people in 2020 believed AI companies had much more of a moat then they actually do - that other companies would struggle to obtain enough data (y’know, downloading the internet to train models wasn’t legal back then) or resources to compete
  - piva00 5d ago
    I replied to the extrapolation, not to your comment directly, I think your point might be more fitting under that comment than mine, I just drilled down from the points above mine.
user43928 5d ago
Datacenters and AI obviously work and come with a credible value proposition and path to profitability. Comparing this to crypto or turnips makes me doubt the merit of any other opinions your comment offers.
- pixl97 5d ago
  The initial growth of the internet was a boom bust cycle, and as you see the internet is still here. This is more about the economic paradigm that is being used to grow a technology versus the economic paradigm the technologies rate of growth can support over time. Just to give some rough numbers in the past 5 years the amount of GPU compute installed in FLOPS is somewhere over 5 times all the CPU flops that have ever existed. This has nothing to do with AI being good or bad or being able to produce things and economic value. It is by far the largest and fastest growth of any technology ever and we have zero clue about the economic stability of this grand experiment we're performing.
  - user43928 5d ago
    The internet is a much more appropriate comparison than crypto or tulips, which bring no or negligible value. Some differences to the market at that time seems to be that during the dotcom bubble, many of the companies had little to no revenue. Leading AI labs already generate enormous revenue. The investments into capacity are needed to address the current demand. The situation seems somewhat less speculative. That said, I cannot predict how AI capabilities will develop and how demand will respond. Should capabilities plateau hard and soon, maybe the demand will not be there for the compute investments. If it does not, and instead AI applications in robotics, science, and self driving expand, chances seem reasonably good that the demand will be there, no? And as for the economic stability, much of the investment comes from existing giants like Microsoft, Alphabet, Amazon, and Meta, who have the necessary cash flow. These companies are less likely to collapse than some of the ones during the dotcom bubble.
    - pixl97 5d ago
      Eh, I'd say it's closer to something like internet + tulips. It's the total amount of money in the economy that's been invested toward a potential outcome. AI represents the largest amount of money, and largest fractional part of the economy invested ever. Because of this AI could be the biggest economic boon ever, yet still not recover the full amount invested. This will have deep economic impacts that affect everyone and everything. At this point AI must achieve all its stated economic impacts or there will still be a huge economic crash that kills off any company that is over invested and cannot make a profit. Worse, the many of the perceived economic impacts of AI are not for humans like you or I, but the huge companies you listed. Even if they economically win, everyone else made out of meat could still lose. They say history doesn't repeat, but it does rhyme. This, at least to me, sounds like a mixtape of "internet" + "tulips" + "1920s financial world leading to global political instability". Every potential outcome I see occurring pushes us closer to further instability, even if the economics on it work out on paper.