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America is now one big bet on AI

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Re: America is now one big bet on AI

#131

Post by KoolKat23 »

lm28469 wrote: post #98
tombert wrote: post #90

It is a little frustrating how we as a society have just decided that corporations don’t need to make money, and indeed can just ponzi their way indefinitely as long as they use some vague “tech” branding. I think this “rapid growth at all costs” is going to bite us, and I think it is possible that it’s going to bite us even more than the .Com bubble or the 2008 crash. I really hope I am wrong, but I don’t see we can…

> It is a little frustrating how we as a society have just decided that corporations don’t need to make money Making money was already a problem, what we should strive for is creating value. You can make big bucks selling cigarettes, leaded gas or PFAS riddled products... the money is made but you're still a net negative for society

Profit at the purest level is a reflection of value created.

Yes there's a whole bunch of financial engeering to create "losses" for tax reasons etc. but ultimately value added is profit.

Re: America is now one big bet on AI

#132

Post by cs702 »

rtkwe wrote: post #120
cs702 wrote: post #75

Earlier quoted context omitted.

Not necessarily. It depends on the second-order economic effects of these investments in AI. For example, companies that build new giant data centers for AI pay salaries to thousands of temporary construction workers who then spend some of it on retail goods and services. That additional spending by the workers is a second-order effect, and it shows up on GDP growth. There are higher-order effects too, but they are m…

Given how much of the investment goes into the stuff inside of the data center and then the power to run it both of which don't really go out to the US economy so much as the builders' wages I feel pretty safe in saying it's not the remaining 60% of GDP growth.

The incremental revenues to software and hardware vendors and energy providers is also used to hire new people, build new infrastructure (manufacturing plants, energy production systems, etc.), with second-order economic effects too. There are higher-order effects too, also more diffuse.

Re: America is now one big bet on AI

#133

Post by somenameforme »

xiphias2 wrote: post #3

While it's all true, I think it's exciting that there's a country that's not afraid of betting when all the signs point to AI being accerelated. USA already bet on software when it let China overtake manufacturing. Now the only worse thing to betting on AI would be slowing it down inside USA.

What signs point to any sort of acceleration besides in spending?

Most major companies have released new versions in the past year, but if people were asked to blindly determine whether they were using the newer or older version, I suspect the results would be close to random. It seems to me that the difference between versions is sharply decreasing in a way that seems to be asymptotic, similar to what happens in literally every other domain with neural networks.

I also think it's clear that the difference between the various choices is also diminishing. Aside from certain manually designed idiosyncrasies (like ChatGPT's obsequiousness), I think people assessing which model they're using would also be mostly random. Somewhat surprisingly, even in the 'LLM arena' [1], where you get to compare output side by side, the difference between models is approaching statistical 0!

[1] - https://huggingface.co/spaces/lmarena-ai/lmarena-leaderboard

Re: America is now one big bet on AI

#134

Post by senordevnyc »

soupfordummies wrote: post #24
woeirua wrote: post #8

We'll know next year if it's not the right move. If we get another wave of incremental upgrades at best then AI will clearly be in a bubble and it's time to look for the exits. If we keep getting major advances then any country _not_ going all in on AI will be left behind.

Have we gotten major advancements in the last ~year? Not being facetious, genuinely asking. I don't see it from my end but then again I don't really use much more than ChatGPT a couple times a week.

In the last ~year, we’ve gotten reasoning models, coding agents, much better multimodal capabilities, usable video models, huge context windows, huge decreases in cost, tons of advances in open source models, and I’m sure a lot more I’m not thinking of. I use AI both to code and to deliver value to my (non-tech) customers, and the last year has been awesome for me.

Re: America is now one big bet on AI

#135

Post by DebtDeflation »

sdenton4 wrote: post #85
DebtDeflation wrote: post #77

We're in this weird situation where: 1) the average American is heavily dependent on equities in their 401k for retirement, 2) so the stock market has to go up, 3) but the stock market is already at record valuations and it's difficult to see how forecasted growth levels justify the current valuation let alone an increased valuation, 4) without revenue growth, the only way for companies to sustain EPS growth is massi…

Option 3, nothing changes: people (and institutions) still have income they need to put /somewhere/, and continue putting it in 401ks and index funds because that's the system. Stonks continue to go up, completely unmoored from any behavior in the actual world.

That sounds a lot like the "everyone has to live somewhere and historically house prices never decrease" argument circa 2006-2007.

Equities are not the only asset class in existence and in any market people can sell just as easily as they can buy.

Not to mention, in addition to the GFC, it took the stock market until 1954 to recover the 1929 highs and in Japan it took until 2024 to recover from the 1989 crash, so there are clear examples where the stock market doesn't always go up for very long periods of time.

Re: America is now one big bet on AI

#136

Post by jcheng »

soupfordummies wrote: post #24
woeirua wrote: post #8

We'll know next year if it's not the right move. If we get another wave of incremental upgrades at best then AI will clearly be in a bubble and it's time to look for the exits. If we keep getting major advances then any country _not_ going all in on AI will be left behind.

Have we gotten major advancements in the last ~year? Not being facetious, genuinely asking. I don't see it from my end but then again I don't really use much more than ChatGPT a couple times a week.

The difference in coding ability between then and now is pretty huge. And a year ago o1 hadn’t been introduced yet, whereas now the “reasoning” technique is pretty widespread.

Not sure if you’re counting things built on top of the models but if so, coding agents have also come a long way since a year ago.

Re: America is now one big bet on AI

#137

Post by runamok »

throwaway290 wrote: post #104
cs702 wrote: post #39

Key quote: > The hundreds of billions of dollars companies are investing in AI now account for an astonishing 40 per cent share of US GDP growth this year. In other words, investment in AI is a massive private-sector stimulus program, powering economic growth. Questions for which no one knows the answer include: * Will these AI investments earn a positive rate of return in the aggregate? * Without these investments o…

is this real? by first look USA only spent like 4% of GDP on space stuff at the peak of space race. 40% is insane.

40% of *growth*, not 40% of total GDP.

Re: America is now one big bet on AI

#138

Post by tombert »

KoolKat23 wrote: post #131
lm28469 wrote: post #98

Earlier quoted context omitted.

> It is a little frustrating how we as a society have just decided that corporations don’t need to make money Making money was already a problem, what we should strive for is creating value. You can make big bucks selling cigarettes, leaded gas or PFAS riddled products... the money is made but you're still a net negative for society

Profit at the purest level is a reflection of value created. Yes there's a whole bunch of financial engeering to create "losses" for tax reasons etc. but ultimately value added is profit.

I don’t think it’s all artificial. I think a lot of startups operate at huge losses of VC money because they have an interesting enough idea and they hope to find a way of making profits eventually, and they never do.

I think this can be said about nearly every Blockchain startup, for example.

Re: America is now one big bet on AI

#139

Post by lumost »

tomrod wrote: post #102
lumost wrote: post #95

Earlier quoted context omitted.

At the time of Adam Smith’s wealth of nations, there was a schism between eastern and Western Europe on the role of politics in the economy. Eastern Europe was influenced by much stronger aristocracies that exercised stronger control of the populace and thus lacked the small business competition that inspired smith. While many “small” businesses offering similar products compete on a marketplace subject to the law of…

> A state can simply order workers to work without pay or be punished, burn debt that they don’t want to pay, or lock traders into a room with orders to buy. There is still an economy, but it becomes one of political favor which is earned through multiple mechanisms. Without irony, this is my observation for how corporations work internally. The currency between teams is backscratching. The USSR was a big corporation…

Exactly right! A corporations internal governance has only a loose correspondence to a market economy. It's quite common for individuals to be promoted who have actually been counter-productive to the stated market goals of the organization.

Re: America is now one big bet on AI

#140

Post by oceanplexian »

rkomorn wrote: post #99
lm28469 wrote: post #98

Earlier quoted context omitted.

> It is a little frustrating how we as a society have just decided that corporations don’t need to make money Making money was already a problem, what we should strive for is creating value. You can make big bucks selling cigarettes, leaded gas or PFAS riddled products... the money is made but you're still a net negative for society

It's too bad we also can't really agree on what value is. A decade or two ago, I'd have told you the companies that are building new technologies (smartphones, streaming services, etc) were creating value. I don't think that at all anymore, even retroactively.

> A decade or two ago, I'd have told you the companies that are building new technologies (smartphones, streaming services, etc) were creating value.

I feel like I’m getting old saying this, but no, I was there and the entire tech community went hard against smartphones, claiming they would never be better than a Pocket PC or a Palm Pilot and were simply another marketing ploy by Apple.

They claimed that they were inferior to purpose built MP3 players, no one would ever pay hundreds of dollars for a phone, real software developers didn’t write apps, wireless data would never scale, etc. As far as I know all those comments are still preserved for posterity in places like Slashdot.

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