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Does anyone else feel like we're heading for a good old-fashioned, 2008-tier, financial crash? I recall people bringing up the possibility ever since Covid bucks started rolling out, but even though we were due for one, and even though the money printer was going brrrrr, the crash has so far failed to materialize.
At the time, I was of two minds about this. On one hand, all the libertarian theory I used to subscribe to said money-printing => boom, boom => bust. On the other hand, the problem for me was it never felt like a boom, and I think this is changing now. A key feature of the pre-crash boom is "malinvestment"; capital going into often downright deranged projects, that are later abandoned half-finished. Well, I feel like the datacenter craze qualifies, and with the wave of AI IPOs that are coming just as major indices are changing their rules, to allow for these companies' near-instantaneous inclusion (an investment so good, you can't pass up on it. Literally, if you're American), it seems like we're solidly in the "irrational exuberance" phase.
Add this to the list of things I hope I'm wrong about, because if we get a proper crash, the political fallout is going to be massive. The script writes itself: Trump / tech bros / capitalism bad, even more gay race communism now.
To whitepillers: is there an argument for why I'm wrong that doesn't boil down to "you don't get it, chud, it's the New Economy! The Singularity is just around the corner! All the rules are obsolete!"? This argument is verboten, because this is pretty much what people say with every bubble.
To fellow blackpillers: any ideas on how to brace for impact? Any IT guys here old enough to make it through the dotcom bubble? How did you do it? Any advice you would have given your past self?
The AI boom is mostly funded by private capital so the blast radius should be limited. Does anyone need to bail out Google or Facebook or Microsoft or Oracle? Nah.
The 2008 crash saw banks imploding due to correlated defaults and the government needed to bail them out because the economy needs banks to exist. This was pretty bad but the crash was only about 50% from a 2007 high and recovered within 5 years.
A crash to pre-AI markets in 2023 is one possible regression, which would be about a 40% drop. But this would mean ignoring all utility provided by AI aside from speculative gains.
The biggest unknowns are if a mildly bad crash causes a general mood of fear and depression to set in and make things much worse. Also, a big implosion in private capital could reveal unanticipated systemic risks.
I can't really get a clear picture either way.
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I can’t say it means anything or not, but I can tell you many companies I sell to have already burned through all their AI budget for the year.
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If there's a crash, I predict it'll be due to energy prices and the war in Iran, not AI.
Anthropic is nearly profitable, or supposed to have been profitable in Q2. Some say that's phoney accounting and Anthropic says profits may not be maintained. But it seems that major investments are paying off. Furthermore, AI models are getting continually better as with Fable most recently. This trend will continue, bigger and better models working for longer need more compute to run them and so justify further intensifying investment. I guess that argument is forbidden by your post. But if it is The Singularity, if it is a New Paradigm then presumably that's good for stocks!
Anyway, energy is more important to the economy than AI right now. You can't just shut off a huge amount of oil and gas production without ramifications! The 1973 oil shock is a useful precedent. The market seems to have been expecting peace talks to advance more smoothly than they actually have been. Bombing has just resumed. Iran has announced they're re-closing the straits and possibly the other straits in the Red Sea too.
I'm suspicious about that given stories like this.
Maybe they had a revenue-positive quarter, but if it was buoyed by various companies overshooting their AI budget, this might not be an actual trend.
I've been suggested this was even an intentional move by an Anthropic investor to goose the company's valuation by artificially increasing their ARR (claims, not substantiated).
Not quite. The U.S. has been a net energy exporter since 2019. So domestic energy production can more than satisfy our needs
That's before we get into the possibility of nuclear coming online.
Yes, higher oil prices impact the U.S. too, but we're not going to be the first ones to tap out, in either a literal or metaphorical sense.
Remember we just secured a massive source of nearby oil.
One thing about markets, they respond to shifts in supply and demand.
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I'm actually quite positive about it although I hope the madness doesn't cause massive political instability worldwide. Destruction is necessary for new growth to happen.
Most of the problem comes from the current energy crisis, the way growth has been artificially pumped due to oversupply of (dumb) money, and too long a tail on ZIRP that we're feeling the hangover from now. The AI pump is because most of the money has nowhere to go and line must only go up; they're betting on the future of AI being significantly more valuable than it is today, because those valuations can't be justified any other way.
The energy crisis I consider a good thing as long as it doesn't lead to major geopolitical conflict over the scramble for resources. More than anything else, Trump may be remembered over the long term as the president who put the cornerstone on the long term energy transition to nuclear. The current pressure on energy prices has a lot of the whiners shut the fuck up real fast about alternative energy, and I hope that people move fast enough to avoid the next-memory holing of the crisis.
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For the first time in decades, in my entire life, the US seems to actually be excited about real huge scale projects. We lead the world undeniably in a new state of the art, we have energetic and ambitious figures fighting each other in a titanic race to innovate on projects at never before attempted scale. A site the size of Manhattan! that's small beans lets do it in space! It's just such an incredible bummer how cynical and bitter so many seem to be about it. Truly it could all go wrong, scaling could stop it's definitely within the distribution of possible future that tokens become a commodity in such a way that these investments don't pay off. But if you wanted to make America great again, if you wanted to actually build impressive physical things here at home and show the world what we're capable of, then this is our ticket. Were you under the impression regeneration was going to be a sure thing?
I feel like I'm watching people sabotage nuclear energy all over again over bullshit hallucinated fears or disaster or made up sour grapes about how huge amounts of energy from fission wouldn't even be that useful. We made computers talk like people and they've progressed in only a few years from barely coherent chat partners to genuinely useful junior programmers. I think there's a fair chance this whole thing ends up with all of us dead as well as a fair chance that progress peters out but how can you not be excited?
Are you really surprised why a technology where its proponents and developers are saying that it has a solid chance of killing everyone and/or consigning the median person into permanent unemployment at best, or creating a titanic financial bubble that's going to bring everyone's retirement with it if it doesn't pay off at worst, is extremely unpopular?
As a software engineer I enjoy using coding agents and I do think with demographics and fertility being what they are, the only real choice as a society is leaning into AI and automation as much as possible even with the commensurate risks, but frankly the median person has really not seen proportional consumer surplus from the trillions invested into post GPT-4 or so LLM development, and in return all they get is dealing with a tsunami of online slop, vibe-coded software that gets worse even as engineers boast about how productive they are, and higher prices for power and RAM.
At least in China they have the message discipline to tell people that AI is going to be used to improve people's quality of life, but all SF can do is jerk off about the AI-induced permanent underclass happening any month now and how dangerous AI is is going to be; it's obvious why the median person hates the AI build-out.
The alternative is that we become Europe, a pathetic retirement home telling itself unending stories of its greatness or the populist have us tear ourselves apart on the pathway to becoming so. The chance of it killing us all is coming either way unless we can get yudd style international treaties to pause/slow down(which I do support but am not expecting to happen). And the likely results of trying it and it crashing don't look terribly different to me than the trajectory we're on if we don't take the swing. A bunch of retirement counts but especially silicone valley investor types get hosed and we all get ridiculously cheap cloud compute for a generation.
I mean of course they haven't because those dollars haven't even been meaningfully spent yet because we haven't built the datacenters. The models people are using are the results of more like the tens to low hundreds of billions of dollars and even that takes time to actually build into products people would like. It takes time for actual artisans to learn to use new tools to produce more than just slop.
The median person who hates AI thinks a literal bottle of water is obliterated from the universe every time you query chat gpt for anything. Almost all of the concerns raised by the median anti-ai person are retarded propaganda produced by slopulists who, correctly, think of them as cattle that they can lie to with impunity in order to gin enough outrage to propel them into office, keep them supporting their slop rage social media account or because they're genuinely foreign spooks trying to retard our progress.
I generally agree, in the sense that "WW2 was inevitable as a result of complex geopolitical factors post-WW1", that "if the fate of human civilization is to create the Torment Nexus, then the Torment Nexus will inevitably end up being created", but obviously that didn't clear Hitler's name and being on the vanguard of potentially creating the Torment Nexus is simply not going to make AI labs popular.
I mean, is that supposed to make it a more appealing thesis for the average person? "You should give us a trillion dollars to build out datacentres that aren't being built, and maybe if you give us enough and we finally succeed you'll be lucky to get something out of it and avoid the permanent underclass or being drone striked by Skynet" is not exactly stirring rhetoric. I'm not saying that AI is useless or that it couldn't theoretically generate a lot of consumer surplus, but that's clearly not what the public messaging on the topic in the West is pushing.
While it's true that populist anti-AI arguments are not very good and mostly arguments-as-soldiers, that's distinct from not having good reasons to act that way in the first place. There's a dedicated core of people who hate phones, cars or fracking, but most people just enjoy the benefits to their lives from those technologies and move on with their lives; there isn't really such consumer surplus and many externalities from the current state of AI, so it's no wonder why people start turning to populists and arguments as soldiers.
Yeah, we should get on those bilateral international treaties that Yudd wants. Until then the alternative is unilateral ceasing where we lose all the upside and delay the problem by optimistically 6 months to two years. I don't really see that as a reasonable choice, especially because approximately zero of the people you're talking about are taking x-risk seriously anyways. This subject is more about me hedging my excitement and has nothing to do with what the opponents actually care about.
They are being built, just have not yet finished being built. and no one besides investors are being asked to give them anything. If people don't want to be personally invested in these projects then I have no real beef with those people. I haven't decided exactly what my own financial position will be in relationship to the IPOs.
You're conflating a number of different people and positions. none of the labs are pushing the "permanent underclass" line. That's an expressed anxiety of some people on social media who feel something big is coming and they don't know how to prepare for it. It's like when people get indignant at "tech bros" for the learn to code meme. It wasn't tech bros that proposed miners should learn to code, it was random journalists. Anthropic is currently in the process of getting blackballed by the department of war for taking a stand against their models being used for domestic surveillance and autonomous weapons. The labs and their staff have been unusually honest and forthright with their concerns about how we need to work out as a society what we're going to do if a singularity event happens. For the most part people like op have accused them of fear mongering to hype their product. No doubt if they downplayed the risks they'd be accused of lying about the potential downsides.
I don't know what to do here. Really. I have no idea what I'm supposed to do about people who make terrible and ignorant arguments as soldiers against fantom interlocutors. That's one of the most frustrating elements of this whole topic. There are civilizationally important conversations to be had on the topic. But all I'm presented with are people who somehow simultaneously believe that the whole industry is a scam that doesn't even work while also being an imminent threat to all jobs which it will somehow be able to remove without actually providing any value. And this incoherent position is expressed in the form of on their face ridiculous empirical claims. It's exhausting.
More than anything what I feel about these people is that they just want to be mad, half of them have been whining for years about American decline and incapacity. This is a field where we are excelling, if America is going to right itself and bring about a new age of American prosperity this is it, this is the chance. Should we squander it? Certainly one should be cautious and prudent but that isn't what these people are. They have already written us off and want things to get worse to validate their black pilled priors. They'd rather this all fall apart so they can smugly say "I told you so" in the ruins. I fear some might even, if they could, sabotage us to this end. I want to wake them up.
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AI is going to be a massive, world historical disruption--yes, even the Singularity--but that doesn't mean we're not in a bubble. Railroads, the Internet, canals, even arguably finance itself were born in bubbles: investors take huge losses, and society and technology continue on, faster than ever.
So, how to avoid being one of those investors getting reamed? Hell if I know. I've moved to more conservative investments myself, but that only very partially reduces my exposure. I'm expecting a pretty nasty correction in the next year that hurts all of the economy, government budgets, etc. Then, will buy things on fire sale.
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I don't know if it'll be 2008-tier, but I'm expecting an ugly correction by the summer of 2027.
I've been expecting a correction since 2021 or so, but I keep being wrong. It feels like we go from one hype to the next without any response from the market when the hype doesn't pan out. Cryptocurrency was going to change everything. NFTs were going to change everything. The metaverse was going to change everything. 3d printing was going to change everything. Hyperloop was going to change everything. Full self driving was going to change everything by 2017!
Sitting here in 2026, I'm about to get in my car that I drive myself. I'm going to buy a new spatula with cash instead of 3d printing a replacement using feedstock that I bought with Bitcoin. The Hyperloop is an expensive joke, metaverse has been wound down amid record-setting layoffs, and NFTs are basically dead.
It seems like the market is fully decoupled from the economy at this point. Everything moves up and down on vibes, and the idea of "uncorrelated assets" shit the bed and died in 2022.
At this point the only solid indicators I have left are interest rates and debt, and both of them are looking increasingly dicey. A lot of very important loans (eg: SoftBank) will by due by the Summer of 2027, and debt collectors are not known for their understanding and gentle forebearance.
I have lived through both the dot com boom and global financial crisis. The claims of AI boosters are not identical to the people caught up in those manias, but it sure rhymes. I'm told that this time it's different. I'm told not to worry about troubling financial signals, because Line Goes Up, and it goes up more than enough to cover the risk. I'm sold an increasingly rosy picture of a hypothetical future mixed into a cocktail with a stark fear of being priced out forever... sorry, a stark fear of "becoming part of the permanent underclass". I was back in 2008 for a minute.
In both cases, I just kept my head down, kept saving, kept investing, and held a death grip on my job. It probably set me back in terms of total lifetime career prospects, but I was also never homeless or counting individual beans to see how long I could go before malnutrition kicked in either. I didn't buy a house until 2012, when I had saved enough to put down a full 20%.
Right now, I'm still contributing to my 401(k), Roth IRA, and HSA investments for the tax advantage, but I'm being more conservative in my taxable brokerage. I like Dimensional and Avantis a lot. The expense ratios are higher than pure passive choices like VTI, but they have a few additional filters that seem to help against the absolute worse of the current debt bonanza. I'm also increasing my bond and securitized debt exposure. It has its own risks, but debt is senior to equity when shit hits the fan. I'd get into metals, but I don't understand those markets well enough for it to be anything other than a gamble.
Beyond that, I'm trying to keep my spending down, and trying to make myself Highly Visible to management. It's pretty clear at this point that almost all layoffs are done on vibes, so if I can make myself part of the c-suite's emotional in-group, I think I have better odds. Hopefully I can speed run a fully funded retirement, then just keep working until I can't anymore.
Add on "Prediction markets are going to change EVERYTHING" (mostly used for sports gambling, unfortunately), the Internet of Things is going to change EVERYTHING (I will now spend EXTRA money for a toaster that isn't wifi connected), OMG we might have found a room-temperature superconductor, VR/AR tech is going to blow your mind, Crypto hype moved from Blockchain hype, to DApp Hype, to DAO Hype, to NFT Hype, to Stablecoin Hype, and it was all illusory.
WHAT THE FUCK WAS WEB3?
Its funny, I MOSTLY could spot when a trend was more hype than real.
I sold all my crypto in 2019. Never bought an NFT. I thought Metaverse would become something but nobody had a good vision for it, 3D printing is indeed a cool, useful tech but don't bet the farm on it.
But I feel sketchy now because all those hype cycles leave you suspicious if the next big thing is actually arriving or there's just people who make a lot of money if you believe it is.
SpaceX seems to be real, but maybe still overhyped.
GLPs ARE the real deal, and there's some other neat drugs in the pipeline.
Smartphones continue to be a boon... if you can avoid all the gamified apps designed to suck your attention and money.
Quadcopter tech is pretty damn mature now, and is finally achieving some market penetration.
It feels absurd to focus on that right now, when the way things are going we're either going to get crash and hyperinflation wiping out a ton of that nest egg, or a new industrial revolution that goes exponential and so even modest market holdings will make you wealthy over the next 10 years.
The ONE thing that doesn't seem likely to happen is just steady 7% growth in the market (on average) over the next 25 years.
What else am I going to do with it? My house is just about paid off. I've got several months worth of food and water. My car is in good shape. I'm pretty well set for guns and guitars.
Hookers and blow aren't really an option either. I don't do drugs, and I live out in the sticks where the quality of prostitute is so low that I'd pay them to not fuck me.
Solid question, in that case.
Could do what I did. Buy a classic muscle car. Gives you something to work and fun as hell to drive, especially on backroads.
LARP as a moonshiner.
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Whitepill, I would say I recheck this graph every so often to see if this ratio starts going up again. (Blue is all aggregate USD debt/gdp, red & green are more usefully decomposing that into private (at least non-federal) debt and federal government debt, and the bold black line is the ratio of red:green). Maybe you could slice the sectors up a bit more finely between households, firms, local/state governments, foreigners, etc., but I think this one pretty much gets what it's trying to capture.
Basically I think many agree that a big caution point for an economic crash/collapse is ballooning private debt. Most analysts now recognize there is just a fundamental difference between that and 'public' debt from the government that issues the currency, and that public debt is at least not as bad. I'd go much farther and say that by the accounting, the national government is more akin to the overall economic score-keeper, and that it would be rather goofy to think you're tracking something negative at all when counting up everyone's total outstanding scores and calling that 'public debt'. The national public debt is essentially our net money supply (money can be increased by other private debt, but not in net); our financial wealth.
So then, tracking private debt to gdp (red line) is some kind of a 'debt to income' ratio term, while private debt to public debt (black line) is a kind of 'debt to wealth' ratio. So I see the red line still steadily coming down since 2008's high, and the black line falling off precipitously after it rose to a huge level in 07/08. I've posted this a few times before, but in the US, our only 6 economic depressions were each immediately preceded by the only 6 multi-year significant reductions in the outstanding government debt. The 7th most significant government surplus run was less dramatic, in the late 90s, and directly coincided with the private sector going much more into debt, causing that bold black ratio to spike, running up until the 08 crash when the private sector forcefully deleveraged, also forcing the government hard back into deficit. So the intuition that government debt is destabilizing or that government surpluses are a good thing, that's what I see as dangerous. If we start getting more politicians in places of influence who think 'quadrillion' is one syllable or zero too far for economic well-being, and who start pushing for austerity and surpluses, that's when I'm getting back into prepper mode.
As others have mentioned though, none of this necessarily has bearing on all stock-market bubbles or corrections. It's just to say that 2008 was a different beast, and I don't personally see any table-setting for that kind of financial crash & great recession/depression angle. I'm still plowing each monthly paycheck into the broad market index and trusting the longterm, while kind of wishing it will dip long enough at some point for me to harvest some on-paper losses to pay less taxes.
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I’ve been feeling an oncoming crash for years, and it hasn’t paid off yet. From my COMPLETELY UNSCIENTIFIC, VIBES-ONLY perspective, the market has absorbed all sorts of rate changes and price spikes and geopolitical boondoggles which might have reasonably been expected to presage a crash. But then, if it was obvious, it would be priced in, right?
Speaking of which. The big AI companies are absurdly valued, which is not the same as being incorrectly valued. Pricing the possibility of a market-shattering payoff has historically caused markets to diverge from normal human expectations. This isn’t great, but it’s not inherently disastrous in the same way as, say, the subprime mortgage situation.
It only ends up a bubble if AI plateaus, stops picking up new niches, before debt outpaces investment. This is entirely possible and I don’t know what the leading indicators would be.
If AI expands into any other sector of the economy, it pays off. I suspect this would require a major change in robotics (to cover skilled trades, etc.) or ethics (to allow violence). Some of these routes are extremely goddamn dystopian, but at least they aren’t bubbles, right?
That said, AI isn’t the only source of optimistic IPOs. There is a lot of interest in manufacturing and defense investment. Onshoring stuff which might become contentious. I could believe that this is its own bubble; people want to believe that manufacturing will spring up. If they are underestimating the cost of local improvements, or overestimating the reliability of the current administration, there’s potential for some serious disappointment.
Ha. Norm MacDonald continues to be relevant.
Besides, if the techbros are revealed as delusional, if all the slush funds and gold plating in the country can’t stave off a crash…what are we supposed to think? Sorry, Trump was just holding the hot potato, blame the wreckers?
I don't think that's fair. I'm not trying to make you feel sympathy for Trump, I'm trying to say what comes after him will be worse. See for example the thread after Labour won the most recent election in the UK, and compare to how eit panned out.
The busness cycle is usually beyond any president, so partially yes, but it's clear he also made many unforced errors here.
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The Schiller P/E ratio has me spooked. It's over 40. I also don't love that Google has gone from using cash flow, to issuing debt, to issuing equity to fund build outs. Furthermore, I'm not fond of current private credit default rates right now. They're at a high water mark since we started tracking them after 2008.
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Have a look at what Hyundai is doing with shipbuilding and robotic welders.
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Can't forget that AI is at present unlocking a lot of rapid improvement in the biology/pharma realm.
Even if we don't get true immortality-type stuff, keeping people healthy and youthful for longer is a massive productivity boom in and of itself. Curing obesity ALONE is trillion-dollar gain territory.
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I've been feeling we are due for a crash since around 2018 basically. What do I know...
I’m fond of the argument that the 2018 correction represented the ‘natural’ end of both the post-2009 asset pricing boom and the broader (and obviously intrinsically related) credit cycle. That would be a relatively standard timeline for that kind of thing.
The response from the Fed (under Trump) but also other central banks was to supercharge the asset pricing bubble, cut or reverse planned hikes aggressively, and reinflate the bubble. Then came Covid and infinite money printing, which accelerated the real inflation that had been avoided through most of the QE era by falling prices for some goods that offset service price increases, plus slowing velocity of money and finally some rate hikes when they became impossible to avoid.
So we’ve been in a weird liminal era for almost a decade now, and it isn’t really clear how it’s going to end. I don’t think it’s viable for the American government to allow markets to experience a prolonged correction. A short, sharp, quickly-recovered-from 30% drop? Sure. But any longer, or any deeper, and big public sector retirement funds, 401ks and so on suffer to a degree no politician can survive. Thats different to previous generations in many ways. At the same time, you can arguably only fight gravity for so long.
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"More money has been lost in anticipation of corrections than in the corrections themselves. " Or something to that effect.
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I've felt that way for about 10 years now, so man I don't trust my judgment on that.
I do think we've drawn out a lot of 'slack' we might have had in the system, between Covid, the Ukraine War, Europe's general implosion, and now the Hormuz/Iran situation. Billions of dollars of fraudulent welfare payments don't exactly help, but at least they're an economic stimulant in the Keynesian view.
So a significant enough shock could definitely send us for a tumble.
For my money, it'll be a serious collapse in global trade that would be the catalyst.
ON THE OTHER HAND, we are energy-rich, and if we build out more nuclear there's virtually no mere economic shock that can send us into a long-term depression.
So I think its fair to keep the debate mostly in the range of "are we due for a market correction that will be relatively short-lived, or a long term depression where growth stagnates for want of any truly productive industries to invest in and an aging population that demands increased consumption spending."
I bought a house in 2016, thinking there was a 50% chance I'd be under water in it.
I did something similar with my first home. Thinking the housing market was overheated and there was a decent chance I'd end up selling it at a loss in order to move for work.
I was of course incredibly wrong.
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LOL I bet we're close in age.
The 2008 crash left an indelible mark on me. Doubly so because I was in Florida, a major epicenter for the worst of it.
I viewed the increasing house prices post 2013 as a TRAP. But I was convinced to buy in 2019, and I am still fully mentally prepared for it to crash down to that level or below again.
I still do sincerely think that the stock market is overvalued (maybe specific companies are not). But if you aren't willing to put at least SOME of your long-term money at risk in it, you're objectively missing out. And the U.S. is the only country where the insane growth might be justifiable.
Ironically, owning the house makes me feel significantly more secure because even if I lost my job and my retirement accounts dropped by 50% tomorrow, I'm guaranteed to have a roof over my head for the next year (foreclosures take a LONNNNNNG time to process) which should give me time to figure something out.
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The value of increasing white collar productivity by 10% permanently would be worth every penny spent on AI. It doesn't have to singularity to be worth it. There are nonobvious questions of how to capture the wealth as a company, but the basic "total addressable market" sanity check passes. TAM = 10% total white collar labor expense (well, value of marginal 10% of labor, but similar).
Typical GDP growth in the US is about 2%/year. That means just waiting 4 years doing normal stuff gets you ~10% productivity improvement. ChatGPT was released just about 4 years ago.
There's a lot of subtleties in the economic figures. But my back-of-the-napkin math above argues that we would have had this 10% permanent productivity gain without any investment in AI.
Reminds me of straight lines on a graph. More specifically:
If the productivity-boosting effects of AI were true but society controls the overall trend to a steady 2% growth rate, you could see the effects of AI on everything but productivity. Dark Leisure is one attempt at explaining it away.
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Wasn't the "basic sanity check" for the Internet back in the 90's also passing? It's entirely possible to land on a piece of viable technology, and still crash the economy by investing in it too much and too early.
Right, that's the point of a basic sanity check. It's an easy check to rule out things that are insane, in this case "if this has a small TAM, it is not worth a large investment." AI does not have a small TAM, so this does not show that it is not worth a large investment.
But, as you said, it also doesn't show it is worth a large investment. It's a "fast rule-out" heuristic, not any kind of a "rule-in" one.
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"Crash" means a very different thing if its a sharp correction that recovers inside a couple years, vs. getting stuck in a trough of low productivity growth.
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Or consider railroads, a century prior.
This is actually my nuanced, enlightened centrist take: AI as a technology—or more precisely, a suite of technologies—is potentially as revolutionary as the internet, electricity, and steam power rolled into one, but current investments in AI may very well turn out to be myopic or premature. For one entirely plausible example, we may end up in a world where distilled models git gud and thus inference is mostly done locally on cheap, commodity hardware like smartphones, which would render the hundreds of billions being poured into data centers largely wasted.
I'm unironically rooting for the outcome where AI intelligence caps out below the super-intelligence level, but nonetheless gets more efficient and cheap, and distilled models become the general standard for everyday use. Like, your self-driving car will have one built in, your house will have one, and the absolute top tier models are mostly only used by Governments and large corpos for the highest level tasks.
Distributed, cheap artificial intelligence would be a boon, and without so much existential risk.
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At this point I would prefer to be ruled by the pink haired feminist communists than the AI techbros.
"They're the same picture."
I kid a bit. But not very much. Died hair, pride flags on chat flairs and hung on a couple walls, way more transwomen than you'd think, ICE warnings on group chats. We got it all in my office building. I'm not an AI techbro but I work for a major tech company.
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I'd still take the AI techbros, you're likely looking back to the feminist communists with rose tinted glasses.
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“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.” -- CS Lewis
I always wondered if Lewis considered the ultimate application that quote automatically suggests, being a card-carrying believer in the most supremely omnipotent moral busybody of all. I feel like the benevolent deity who fails to understand the wants and needs of His subjects is a somewhat exhausted trope now, but was it already back then?
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If this was an old forum that quote would be in my signature.
You can always add a flair under settings. Of course, people will only see it if they click on your profile, and you’re limited to 100 characters, but you could at least remind some people that “It would be better to live under robber barons than under omnipotent moral busybodies.”
You're mixing up two different features.
Your flair shows up next to your username at all times, but is limited to 100 characters.
Your bio has a much higher limit of 1500 characters, but shows up only when someone clicks on your username.
@zoink
Thanks! You were actually the one I had in mind as I wrote that, as I have always found your flair quite memorable.
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I can imagine a AI post scarcity possibility. The communists will just never work if they ever get meaningful power.
AI bros also have lower downside, though. Communists winning would likely only result in deaths in the order of 10s-100s of millions, maybe a billion or two, but likely not more. AI bros winning could mean literally every last human dead, or perhaps even worse, their consciousness stuck in eternity in a hell simulator.
I think AI bros still win out in terms of expected value, though.
aren't we scrathcing St. Petersburg paradox territory here?
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Is that a realistic outcome? I could say that Communists winning could mean nuclear bombs in space and sun death and the blow-up of the entire galaxy. Maybe Communists winning means all our consciousnesses stuck in eternity in a hell simulator, plus one.
Communism is a hell simulator, but at least you get to die (sometimes pretty quickly).
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I'm pretty bad at making predictions, especially about the future, but a lot of people in AI seem to think that the odds of AI development leading to human extinction is at least in single digit percentage odds, which is high enough to be concerning. Communists could likely build rockets and simulators, but I'm skeptical that such tech progress is likely in a Communist-run world before we're brought back to some post-apocalypse situation or just boring stasis in some barely tolerable dystopia. Certainly I'd bet that inventing immortal consciousness that can suffer for eternity seems far more likely in an AI bro world than a communist one. In the latter, the suffering would only last about a lifetime, and in the real world.
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A hard nope from me, but yeah, it's a South Park-esque douche vs turd contest.
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Yes. Maybe not exactly like 2008, but the economy seems over-heated (don't talk about Ireland and how we're increasingly over-reliant on multinationals tax take plus our fiscal prudence has gone out the window with prospects of borrowing more money to pay for government vote-buying programmes), I don't trust the splurging on AI being the thing making line go up, and there's enough discontent about "my grocery basket is X times more expensive" even with all the corrective think pieces about ackshully we have never been so rich and well-off, unemployment is low, look at economy how line go up.
Throw in all the wars driving up energy prices and we're due a landing, and a hard one, soon.
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Trying to time shorts/market reversals is effectively impossible. Essentially the entire market structure is doing its best to pump at all times, and will happily keep running on air roadrunner-style until the occasional straw that actually breaks the proverbial back turns out to be something absolutely random.
Just make sure you're controlling your spending, keeping a decent amount of savings in relatively durable spots and don't overextend too hard.
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Trump admin is engineering a massive restructuring of global capital with the intent of making America richer. It runs a spectrum from factories and reshoring to taking the oil from Venezuela. DEI Disparate Impact theories are being unwound so that productive talent that was locked up by politics will no longer be locked up. Welfare migrants are being deported and America's balance sheet is shifting toward productive economic activity again.
The global future looks very mixed as population decline will hit the entire world. Fewer people means less capital to spend and fewer things to spend capital on. Bad news if you're China or Russia or Europe or Brazil. But this will make America even more attractive for capital and investment, relative to everywhere else. We will have factories, oil, gas, tech, services, military strength, capital, youth, growth, everything.
The market is already starting to price in this future. AI and datacenters are the headline boom feeding a lot of optimism, and it might come crashing down. But the underlying economic picture is very potentially strong because the fundamentals of the American economy are stable, and getting stronger. And, to my mind, AI unlocks so many economic opportunities that it will find a purpose eventually. If it does come crashing down it will be more like the dot-com bubble than full 2008. Because a technology that transforms electricity into intellectual work is enormously productive in real terms, not just fake email job terms. The dot-com bubble killed billions of dollars of imagined wealth locked up in companies like Pets.com. But, fundamentally, there was nothing Pets.com was doing that isn't being done today. They were just ahead of the curve.
Besides, despite all evidence to the contrary, the government has learned from some of its mistakes, and I don't think they'll repeat the dot-com bubble fiasco. Washing and Bessent and DOD and Trump will funnel billions of dollars in government contracts to the AI companies, and that will keep everybody afloat. The consequences will be an entirely new set of problems relating to economic management out of Washington central offices as the greatest economic change in the means of production since the Managerial Revolution plays out. It won't even be entirely a good set of changes. But they will probably fuel a lot of medium-term growth in the terms we're talking about here, and the negative consequences will be something we will spend the rest of our lives disentangling.
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Not really seeing it. The AI boom could fail, but I wouldn't expect a 2008-tier crash from it. The datacenters which were built will still be there and still be useful for 'conventional' computing. So more like the dot-com bust which left a bunch of dark fiber which became the foundations for a new boom.
I'm not sure if this is a great comparison. Fiber can sit in the dirt for 25 years and light up just fine.
Even in an optimal operating environment, I don't think we'll get nearly that long out of a modern data center GPU.
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Isn't the specialized AI hardware being rolled out considered inefficient for general purpose computing, though?
Ironically, the frustrating pace of permitting and construction means the amount of overcapacity will be limited. An AI bust which clears out the dead wood will end up with a few large winners who will still be able to make productive use out of all the AI hardware they can get their hands on.
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Most of it is basically GPUs with a lot of memory, and good for any massively parallel problem. Google's TPUs are more specialized, but I wouldn't be surprised if they could use them for something else.
The first generation TPUs were for Search and Ads, bread and butter moneymakers.
They were used for a lot of things, those among them. But their basic operation was a matrix multiply followed by a LUT, a lot more restricted than GPUs.
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Depends on what you mean by "conventional". Just imagine the gaming rig you can build with that.
Aren't most of the high-end AI chips a bit unwieldy to build gaming rigs with? And I feel like the same people who would want to build a massive gaming rig would also not want to stream their game from a server in the middle of nowhere somewhere.
Although now that you mention it, perhaps the Sea Power fanatics would probably accept a little bit of lag if it could let them play through "The Dance of the Vampires" from Red Storm Rising...
Specifically, a lot of the GPUs designed for AI workloads don't even have video outputs, so they wouldn't work in your own personal gaming rig.
At some point GPUs aren't even GPUs any more, they're something else.
Wild to think that the lineage of the graphics accelerators with weird aliens on the box is now utterly revolutionizing the world.
It is still surreal to me that Nivdia went from a niche company that only true PC Gamer hobbyists 'cared' about, to like somewhere around the top 10 most important companies in history.
It'd be like, I dunno, Warhammer 40k became the most popular competitive sport on the planet, with top players commanding tens of millions of dollars in salary.
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My first GPU was a PNY Verto (something older than the 6600 in that gallery, though I don't recall the exact model number). That really brought back some nostalgia haha
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I think that was the case for every bubble investment. The factories, houses, shitty dotcom-era websites were also still there and available, the question is whether they can justify their cost. The wasted capital usually gets picked up eventually, unless the investment is something truly retarded like tulips.
Tulip Mania was more or less a wild exaggeration of the truth.
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The houses often rotted(literally) after being left half finished.
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It was largely not true in the housing crash associated with the GFC; many of the half-finished exurbs ended up simply being destroyed (before or after being scavenged for parts). And the risk-aversion it generated, along with allowing the anti-growthers to take political control, depresses housing to this day. I would not expect an AI crash to do this.
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The Netherlands had world-leading systems of farming and flood-control in the Tulip areas which may have been atleast somewhat encouraged by the bubble.
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