Really shows where our priorities are at as a country. SMH
Hyperscalers have already outspent most famous US megaprojects
41–50 of 296 posts
Re: Hyperscalers have already outspent most famous US megaprojects
#42Earlier quoted context omitted.
That's the problem with going too far using "money" or "GDP" - you can roughly compare the WWII 45% of GDP spent with today - https://www.davemanuel.com/us-defense-spending-history-milit... because even by WWII much was "financialized" in such a way that it appears on GDP (though things like victory gardens, barter, etc would explicitly NOT be included without effort - maybe they do this?). As you get further and fur…
You don't even need to go that far back to run into issues, when I read Pride and Prejudice, I think Mr. Darcy was one of the richest people in England at around £10,000/year, but if you to calculate his wealth in today's terms it wasn't some outrageous sum (Wikipedia is telling me ~£800,000/year). The thing is that the economy was totally different back then -- labor cost practically nothing, but goods like furnitur…
The big change is the end of any sort of backing in money. The Minneapolis Fed calculated consumer price index levels since 1800 here. [1] Of course that comes with all the asterisks we're speaking of here for data going back that far, but their numbers are probably at least quite reasonable. They found that from 1800 to 1950 the CPI never shifted more than 25 points from the starting base of 51, so it always stayed within +/- ~50% of that baseline. That's through the Civil War, both World Wars, Spanish Flu, and much more.
Then from 1971 (when the USD became completely unbacked) to present, it increased by more than 800 points, 1600% more than our baseline. And it's only increasing faster now. So the state of modern economics makes it completely incomparable to the past, because there's no precedent for what we're doing. But if you go back to just a bit before 1970, the economy would have of course grown much larger than it was in the past but still have been vaguely comparable to the past centuries.
And I always find it paradoxical. In basic economic terms we should all have much more, but when you look at the things that people could afford on a basic salary, that does not seem to be the case. Somebody in the 50s going to college, picking up a used car, and then having enough money squirreled away to afford the downpayment on their first home -- all on the back of a part time job was a thing. It sounds like make-believe but it's real, and certainly a big part of the reason boomers were so out of touch with economic realities. Now a days a part time job wouldn't even be able to cover tuition, which makes one wonder how it could be that labor cost practically nothing in the past, as you said. Which I'm not disputing - just pointing out the paradox.
https://www.minneapolisfed.org/about-us/monetary-policy/infl...
Re: Hyperscalers have already outspent most famous US megaprojects
#43Re: Hyperscalers have already outspent most famous US megaprojects
#44This tweet shows it as a percentage of US GDP: https://x.com/paulg/status/2045120274551423142 Makes it a little less dramatic. But also shows what a big **'n deal the railroads were!
The railroads and the interstate are arguably the biggest and broadest impact, especially in 2nd order effects (everything West of the Mississippi would be vastly different economically without them). I am not an ai-booster, but I would not be surprised at AI having a similar enabling effect over the long term. My caveat being that I am not sure the massive data center race going on right now will be what makes it ha…
Is there really that much inefficiency in our distribution of goods and services such that AI could have this much impact?
Re: Hyperscalers have already outspent most famous US megaprojects
#45This tweet shows it as a percentage of US GDP: https://x.com/paulg/status/2045120274551423142 Makes it a little less dramatic. But also shows what a big **'n deal the railroads were!
The railroads and the interstate are arguably the biggest and broadest impact, especially in 2nd order effects (everything West of the Mississippi would be vastly different economically without them). I am not an ai-booster, but I would not be surprised at AI having a similar enabling effect over the long term. My caveat being that I am not sure the massive data center race going on right now will be what makes it ha…
I agree that AI will probably have bigger effects that we could possibly predict right now. But unlike past booms/bubbles, I suspect the infrastructure being built now won't be useful after it resolves. The railroads, interstate system, and dotcom fiber buildout are all still useful. AI will need to get more efficient to be useful as established technology, so the huge datacenters will be overbuilt. And almost none of the Nvidia chips installed in datacenters this year will still be in use in 5 years, if they're even still functional.
Re: Hyperscalers have already outspent most famous US megaprojects
#46Further evidence that the US, for whatever reason, lacks basic ability to rationally use resources.
Re: Hyperscalers have already outspent most famous US megaprojects
#47Earlier quoted context omitted.
The problem is that once built, railroads provided economic value right off the bat. I would love to hear about the economic value being generated by these LLMs. I think a couple years is enough time for us to start putting some actual numbers to the value provided.
Equating this buildout with LLMs is also a category error. Waymo (self-driving cars) depends on the same infrastructure, and there are a variety of other robotics programs which are actually functioning, you can see them in operation. They all require a lot of GPUs to train and run the models which operate the robotics.
It's not clear that Waymo is an improvement over existing infrastructure so much as ensuring that fewer humans benefit from each car ride (which was already pathetically low).
Re: Hyperscalers have already outspent most famous US megaprojects
#48Further evidence that the US, for whatever reason, lacks basic ability to rationally use resources.
If you adjust for GDP railroads were much more expensive, and I don't think they're viewed as a mistake https://x.com/finmoorhouse/status/2044985790212583699?s=20
Re: Hyperscalers have already outspent most famous US megaprojects
#49Earlier quoted context omitted.
But doesn't that overstate it in the other direction? Talking about investments in proportion to GDP back when any estimate of GDP probably wasn't a good measure of total economic output? We're talking about the period before modern finance, before income taxes, back when most labor was agricultural... Did the average person shoulder the cost of railroads more than the average taxpayer today is shouldering the cost o…
The F-35 case is interesting. Lockheed Martin can, given peak rates seen in 2025, produce a new F-35 approximately every 36 hours, as they fill orders for US allies arming themselves with F-35's. US pilot training facilities are brimming with foreign pilots. It's the most successful export fighter since the F-16 and F-4, and presently the only means US allies have to obtain operational stealth combat technology. What…
> Lockheed Martin can, given peak rates seen in 2025, produce a new F-35 approximately every 36 hours ... it's a operating line at full rate production that could conceivably build a US Navy squadron every ~15 days, plus a complete logistics and training system, all on the front burner.
That's amazing. I had no idea the US was still capable of things like that.
I wonder if there's a way to get close to that, for things that aren't new and don't have a lot of active orders. Like have all the equipment setup but idle at some facility, keep an assembly teams ready and trained, then cycle through each weapon an activate a couple of these dormant manufacturing programs (at random!) every year, almost as a drill. So there's the capability to spin up, say F-22 production quickly when needed.
Obviously it'd cost money. But it also costs a lot of money to have fighter jets when you're not actively fighting a way. Seems like manufacturing readiness would something an effective military would be smart to pay for.
Re: Hyperscalers have already outspent most famous US megaprojects
#50This tweet shows it as a percentage of US GDP: https://x.com/paulg/status/2045120274551423142 Makes it a little less dramatic. But also shows what a big **'n deal the railroads were!
The railroads and the interstate are arguably the biggest and broadest impact, especially in 2nd order effects (everything West of the Mississippi would be vastly different economically without them). I am not an ai-booster, but I would not be surprised at AI having a similar enabling effect over the long term. My caveat being that I am not sure the massive data center race going on right now will be what makes it ha…
> I would not be surprised at AI having a similar enabling effect over the long term.
The big difference is that the current AI bubble isn't building durable infrastructure.
Building the railroads or the interstate was obscenely expensive, but 100+ years down the line we are still profiting from the investments made back then. Massive startup costs, relatively low costs to maintain and expand.
AI is a different story. I would be very surprised if any of the current GPUs are still in use only 20 years from now, and newer models aren't a trivial expansion of an older model either. Keeping AI going means continuously making massive investments - so it better finds a way to make a profit fast.