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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

#141

Post by tim333 »

bgwalter wrote: post #65
softwaredoug wrote: post #13

There is other emerging tech we could be investing in that other economies are doubling-down on. But the Administration has made green energy harder for American companies. And a lot of health tech too is tougher under the current administration. Tarrifs, affordability, etc also hit hard on small businesses, making growth there tough.

That is the tragic part. This administration ran on a platform of bringing back the real economy and manufacturing. Now they fuel the Bitcoin and "AI" bubbles, which are nonessential and non-tangibles. The GDP increases are fake. Mining Bitcoin produces nothing, in fact the money supply should not be increased to match the fake GDP increase. The same is true for "AI".

Bit unfair to "AI". It does produce some stuff.

Re: America is now one big bet on AI

#142

Post by eproxus »

tim333 wrote: post #141
bgwalter wrote: post #65

Earlier quoted context omitted.

That is the tragic part. This administration ran on a platform of bringing back the real economy and manufacturing. Now they fuel the Bitcoin and "AI" bubbles, which are nonessential and non-tangibles. The GDP increases are fake. Mining Bitcoin produces nothing, in fact the money supply should not be increased to match the fake GDP increase. The same is true for "AI".

Bit unfair to "AI". It does produce some stuff.

You’re absolutely correct!

Re: America is now one big bet on AI

#143

Post by cloverich »

rkomorn wrote: post #117
logicchains wrote: post #110

Earlier quoted context omitted.

>It's too bad we also can't really agree on what value is. This is fortunately a problem that economics has already solved: value is what people are willing to pay for. Any other definition involves imposing someone's own subjective judgement on what's valuable.

I think that totally discards the comment I was responding to. Needless to say, I don't agree with your definition or your idea that it's solved.

It partially addresses it, specifically addresses one part but not the other.

"Value" to the individual is subjective, and defined by the price people are willing and able to pay. Its "solved" in the sense that modern economics universally accepts it.

The harder part are the second order effects / negative externalities (e.g. cancer from cigarettes). But it’s a constant balancing act between over- and under-regulation. On a more general level this was represented all the way back in Adam Smith's work. i.e. I don't think it unfair to say value and regulation is a conceptually solved problem, irrespective of the constant attempts to undermine it.

Re: America is now one big bet on AI

#144

Post by rtkwe »

cs702 wrote: post #132
rtkwe wrote: post #120

Earlier quoted context omitted.

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.

Again I'm not denying second order effects exist. Just saying it's not 150% of the direct effects.

Re: America is now one big bet on AI

#145

Post by jebarker »

righthand wrote: post #86
jebarker wrote: post #47

Earlier quoted context omitted.

> The general cost of living is sky rocketing, largely due to this push How are cost of living increases tied to AI investment?

This is an intentionally disingenuous question right? Where do you think the tax money being given away to these huge datacenters is going? What downstream effects does major increase to limited consumer services and goods do across the board?

No, it was a genuine question. Sorry if I’m asking basic questions, but I actually don’t find your questions as responses help make things any clearer.

Re: America is now one big bet on AI

#146

Post by diffeomorphism »

wing-_-nuts wrote: post #78
goalieca wrote: post #59

Earlier quoted context omitted.

The 40% investment could presumably go into jobs and infrastructure that might be more durable.

That 40% investment used to be sitting in giant cash slushfunds on company balance sheets. This isn't government investment. It would have never been spent on 'infrastructure'. On the upside, even if AI is a bubble and implodes spectacularly we're going to have metric tons of compute available for climate models, drug discovery and anything else that requires a super computer to model.

Will we? The hardware you want for AI and the hardware you want for super computing seem to have different priorities, e.g. concerning floating point precision.

Re: America is now one big bet on AI

#147

Post by tim333 »

dghlsakjg wrote: post #71
shubhamjain wrote: post #33

> Foreigners poured a record $290bn into US stocks in the second quarter and now own about 30 per cent of the market — the highest share in post-second world war history. Europeans and Canadians have been boycotting American goods but continue buying US stocks in bulk — especially the tech giants. I fail to find any plausible explanation for this other than the fact that yes, it is a bubble. Tesla, a car company faci…

> "Be fearful when everyone is greedy." I’ve cashed out of U.S. stocks, and I think it's wise thing to do when craze is at its peak. The man who said the thing you are quoting also repeatedly advised never to bet against America, and to never try to time the market...

Although Buffett's company is currently holding about $348bn in cash and equivalents. He also has ~$300bn in stocks so a little over 50% cashed out.

I think he'd say he's more into pricing things than timing - he probably thinks the market is expensive.

Re: America is now one big bet on AI

#148

Post by dghlsakjg »

seanmcdirmid wrote: post #109
dghlsakjg wrote: post #84

Earlier quoted context omitted.

I've never even seen a Waymo and I haven't left North America for half a decade. Popular in SF does not mean inevitable everyhwere. It remains to be seen whether robotaxis can 1. scale outside of certain cities 2. make a profit given the apparent teams of actual human remote drivers that robotaxi companies employ to get their robots out of trouble. I would love to see it, but the lack of speed and momentum points to…

I rode a few in SF and can’t wait for them to come to Seattle. They don’t use actual human remote drivers, and the support person I spoke to when I had an issue had a Filipino accent, so I’m not sure they were even in the usa (although that totally could have been California also). I don’t think they wound need that many people anyways to do live support. Waymo is definitely being cautious, but the cities they move i…

They say they don't have drivers, but they do admit to having actual people that solve live issues that the car cannot understand, which seems like a semantic difference to me. If its one support person per 1k cars, its probably a non issue, if its one per 5 cars then its a totally different problem.

In any case, the "can it make money" question is still unanswered (at least according to Waymo as of March). https://www.cnbc.com/2025/05/20/waymo-ceo-tekedra-mawakana-1...

Re: America is now one big bet on AI

#149

Post by overfeed »

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.

You're right, but I find your take too clinical and ignoring the human factors, such as overall market confidence.

Another way to look at this is asking if AI investments get wiped out, would they take down GDP growth with them? I think there would be a pull back across the board. I will speculate that without AI investment juicing growth, we would have seen broad investment pullbacks in the 2nd quarter, and a shrinking GDP.

Re: America is now one big bet on AI

#150

Post by danans »

realusername wrote: post #83
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…

I have the exact same opinion. And I should add that all these companies "firing people to replace them by AI" are in reality just firing people because the economy isn't great, of course that sounds way worse for investors if they told the truth.

> firing people to replace them by AI" are in reality just firing people because the economy isn't great

More concretely, they can use this situation to squeeze more productivity out of those who remain employed. With the consumer tapped out of discretionary time, attention and spending power, the remaining way to grow profits is to lower overhead.

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