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Hyperscalers have already outspent most famous US megaprojects

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Re: Hyperscalers have already outspent most famous US megaprojects

#91

Post by wr2 »

0xbadcafebee wrote: post #23
lukeschlather wrote: post #10

This seems like a total category error. The Railroads are the only example that actually seems comparable, in being an infrastructure build out that's mostly done by a variety of private companies. Examples of things that would be worth comparing to the datacenter boom are factory construction and utilities (electrification in the first half of the 20th century, running water, gas pipes.)

Fwiw, Railroads were the reason for some of the biggest bank collapses in history. Panic of 1873 was literally called "The Great Depression" (until a greater depression hit). 20 years later was the Panic of 1893. Both were due to over-investment and a bubble bursting, and they took out tons of banks and businesses. We're seeing exactly the same thing with AI, as there is massive investment creating a bubble without a…

Lol a bit dramatic at the end. There will be a correction in stocks that were priced in for growth related to AI.

But what I see is the two big costs for America:

1) Less money being invested into risky AI projects in general, in both public (via cash flows from operations) and private markets 2) The large tech firms who participated in large capex spend related to AI projects won't be trusted with their cash balances - aka having to return more cash and therefore less money for reinvestment

All the hype and fanfare that draws in investment at al comes with a cost - you gotta deliver. People have an asymmetric relationship between gains and losses.

Re: Hyperscalers have already outspent most famous US megaprojects

#92

Post by tim333 »

rickydroll wrote: post #57
topspin wrote: post #52

Earlier quoted context omitted.

"I had no idea the US was still capable of things like that." It's more than just the US though. It's the demand from foreign customers that makes it possible. It's the careful balance between cost and capability that was achieved by the US and allies when it was designed. Without those things, the program would peter out after the US filled its own demand, and allies went looking for cheaper solutions. The F-35 isn'…

Now let's talk about the 155mm artillery shells

I think people were surprised to suddenly have a lot of demand for those.

Re: Hyperscalers have already outspent most famous US megaprojects

#93

Post by chatmasta »

timmg wrote: post #3

This 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!

I’m surprised there is no broadband rollout or telecom network on there. I guess it’s hard to quantify the cost within a specific event?

Re: Hyperscalers have already outspent most famous US megaprojects

#94

Post by wr2 »

hyperbovine wrote: post #90
timmg wrote: post #3

This 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 railroad buildout was a lot more, idk, tangible. Most of that money was spent employing millions of people to smelt iron, lay track, build bridges, blow up mountains, etc. It’s a lot more exciting than a few freight loads of overpriced GPUs.

Also a good point - railroads for sure brought a lot more optimism.

LLMs+Data centres on the other hand...

Re: Hyperscalers have already outspent most famous US megaprojects

#95

Post by chatmasta »

0xbadcafebee wrote: post #72
keeda wrote: post #55

Earlier quoted context omitted.

> We're seeing exactly the same thing with AI, as there is massive investment creating a bubble without a payoff. ... And so far there's no evidence that all this investment has generated more profit for the users of AI. If you look around a bit, you will find evidence for both. Recent data finds pretty high success in GenAI adoption even as "formal ROI measurement" -- i.e. not based on "vibes" -- becomes common: htt…

75% report positive ROI (and the VPs are much more "optimistic" than the middle managers who are closer to the work) - but how much ROI? 1%? The fact that they don't quote a figure at all is pretty telling. And that's the ROI of the people buying the AI services, which are often heavily subsidized. If it costs a billion dollars to give a mid-sized company a 1% ROI, that doesn't sound sustainable. I would love to see…

It’s not easy to quantify because you’re basically substituting or augmenting labor. How do you quantify an ROI on employees? You can look at profit of a project they’re hired to execute. But with AI, it’s mixed with the employees, so how do you distinguish the ROI of the two? With time, we might be able to make comparisons, but outside of very specific scenarios it’s difficult to quantify.

Re: Hyperscalers have already outspent most famous US megaprojects

#96

Post by mongol »

chatmasta wrote: post #93
timmg wrote: post #3

This 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!

I’m surprised there is no broadband rollout or telecom network on there. I guess it’s hard to quantify the cost within a specific event?

Indeed. Or for that matter, electrification?

Re: Hyperscalers have already outspent most famous US megaprojects

#97

Post by bluedino »

topspin wrote: post #40
chromacity wrote: post #4

Earlier 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

Until we run out of materials

https://mwi.westpoint.edu/minerals-magnets-and-military-capa...

Re: Hyperscalers have already outspent most famous US megaprojects

#98

Post by lukeschlather »

therobots927 wrote: post #81
lukeschlather wrote: post #75

Earlier quoted context omitted.

The answers to both of those questions are pretty guarded trade secrets. Amazon and Google just to name a couple examples are very profitable companies and I would not bet on them investing all this money without real use cases where profit is likely. Amazon is adding thousands of new robots to their factories every year.

So your argument basically boils down to, the datacenter build out is not a waste of resources because if it was, these companies wouldn’t be building them. Got it.

I mean, your argument is that Google has had increasing revenue and profit for a decade, to the point that they have $400B in revenue + profit this year, and that they are going to lose money because they plan to spend $180B on capital projects for new data centers next year, because you know their business better than they do.

Re: Hyperscalers have already outspent most famous US megaprojects

#99

Post by ezst »

dghlsakjg wrote: post #28
timmg wrote: post #3

This 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…

And I'm not an AI doomer, but hell no, give me another space program/station over this every single time and pretty please. We are not pioneering new engineering science or creating a pipeline of hard research and innovation that will spread in and better our everyday lives for the decades to come. We are overbuilding boring data centers packed with single-purpose chips that WILL BE obsolete within a couple years, for what? For the unhinged hope that LLM chatbots will somehow develop intelligence, and/or that people by the billions will want to pay a hefty price for dressed-up plagiarism machines. There is no indication that LLMs are a pathway to meaningful and transformative AI. Without that, there is no technical merit for the data centers being built currently to constitute future-proof infrastructure like highways and railroad networks did. There is no economical framework in which this somehow trickles down to or directly empowers the individual. This is a sham of ludicrous proportions, a sickening waste.

Re: Hyperscalers have already outspent most famous US megaprojects

#100

Post by EFreethought »

operatingthetan wrote: post #38
dghlsakjg wrote: post #28

Earlier quoted context omitted.

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 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 happen. Maybe? It seems as if the tech is starting to taper off already and AI companies are panicking and gaslighting us about what their newest models can actually do. If that's the case the industry…

> AI companies are panicking and gaslighting us about what their newest models can actually do

I think they have been gaslighting us from the beginning.

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