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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

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.
- user43928 5d ago
  > At this point AI must achieve all its stated economic impacts or there will still be a huge economic crash I had a look at the numbers. The investment into data centers is estimated around $800B/year currently. OpenAI + Anthropic combined had ARR of >$100B in July. Global labor income is around $65T/year, the US GDP $32T, the global one $126T. Global software spending: $1.4T/year. I am no financial analyst, but I don't think all the stated AI impacts have to be met just to recover the investments. A 1% productivity gain on global labor income represents $660B/year. At 5% we would look at $3.3T/year. They don't need to cure cancer to justify the investment, even though Amodei hopes to cure most major disease in the next 5-10 years.
  - pixl97 5d ago
    Lets take this number for example >Global software spending: $1.4T/year. Out of this number how much of this goes to payroll that goes to humans versus how much of this goes to non-human infrastructure costs. The numbers suggest this is anywhere from 60 to 90%, with 70% being a reasonable average figure. Just under a trillion dollars paid directly to humans would disappear if AI somehow captured all of this market. Moreso the AI industry needs to capture these gains very fast or they will be crushed by interest payments on the massive debts they've accrued. >ven though Amodei hopes to cure most major disease in the next 5-10 years The average development time for medicine is 10 to 15 years before a single dollar is earned from said medicine. AI will shave very little off that as human testing and our stupidly complex bodies introduce all kinds of problems. Furthermore running head long into blindly using AI medicine is how you produce X risks from super intelligence AI. The speed at which AI has to develop in which to get profitability is the biggest risk, a potentially catastrophic risk at that.
  - HarHarVeryFunny 5d ago
    You can theorize all you like, and many people like yourself are expecting to see GDP growth pick up as a result of AI, maybe if only because of the boom in datacenter construction etc (regardless of whether AI ends up actually boosting the economy), BUT ... The reality is that so far there has been no sign of GDP growth picking up. It is basically flat at 2.5% +/- over the last few years. In a similar vein one might have expected that the internet (think of all the e-commerce and efficiencies!) might have shifted GDP growth into a higher gear, but it did not, although in that case there was at least a significant boost in the 1996-2000 "dot com" era when the build out was happening (then to be followed by the crash and all the unused dark fiber etc). So, maybe the hoped-for AI boom will be just as much of a dud (as it appears to be so far) as the internet boom. New day, different tools, same growth. It's perhaps odd that we're not even seeing datacenter/etc build out register on GDP, but perhaps the scale of it is not as large as the internet build out?

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.

user43928 5d ago
> At this point AI must achieve all its stated economic impacts or there will still be a huge economic crash I had a look at the numbers. The investment into data centers is estimated around $800B/year currently. OpenAI + Anthropic combined had ARR of >$100B in July. Global labor income is around $65T/year, the US GDP $32T, the global one $126T. Global software spending: $1.4T/year. I am no financial analyst, but I don't think all the stated AI impacts have to be met just to recover the investments. A 1% productivity gain on global labor income represents $660B/year. At 5% we would look at $3.3T/year. They don't need to cure cancer to justify the investment, even though Amodei hopes to cure most major disease in the next 5-10 years.
- pixl97 5d ago
  Lets take this number for example >Global software spending: $1.4T/year. Out of this number how much of this goes to payroll that goes to humans versus how much of this goes to non-human infrastructure costs. The numbers suggest this is anywhere from 60 to 90%, with 70% being a reasonable average figure. Just under a trillion dollars paid directly to humans would disappear if AI somehow captured all of this market. Moreso the AI industry needs to capture these gains very fast or they will be crushed by interest payments on the massive debts they've accrued. >ven though Amodei hopes to cure most major disease in the next 5-10 years The average development time for medicine is 10 to 15 years before a single dollar is earned from said medicine. AI will shave very little off that as human testing and our stupidly complex bodies introduce all kinds of problems. Furthermore running head long into blindly using AI medicine is how you produce X risks from super intelligence AI. The speed at which AI has to develop in which to get profitability is the biggest risk, a potentially catastrophic risk at that.
- HarHarVeryFunny 5d ago
  You can theorize all you like, and many people like yourself are expecting to see GDP growth pick up as a result of AI, maybe if only because of the boom in datacenter construction etc (regardless of whether AI ends up actually boosting the economy), BUT ... The reality is that so far there has been no sign of GDP growth picking up. It is basically flat at 2.5% +/- over the last few years. In a similar vein one might have expected that the internet (think of all the e-commerce and efficiencies!) might have shifted GDP growth into a higher gear, but it did not, although in that case there was at least a significant boost in the 1996-2000 "dot com" era when the build out was happening (then to be followed by the crash and all the unused dark fiber etc). So, maybe the hoped-for AI boom will be just as much of a dud (as it appears to be so far) as the internet boom. New day, different tools, same growth. It's perhaps odd that we're not even seeing datacenter/etc build out register on GDP, but perhaps the scale of it is not as large as the internet build out?