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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

#121

Post by lazide »

chatmasta wrote: post #95
0xbadcafebee wrote: post #72

Earlier quoted context omitted.

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.

Everyone I’ve seen try has had negative actual ROI.

All the middle managers are afraid to say anything though, so go go go.

Re: Hyperscalers have already outspent most famous US megaprojects

#122

Post by KylerAce »

ZeWaka wrote: post #105
wisemanwillhear wrote: post #54

Earlier quoted context omitted.

For some reason this reminds me of people at work who walk up and say we did x bazillion things in n time, and then pause and expect us to express shock at how amazing that is and how much more productive they are than other teams. So what. Without a proper comparison to something equivalent I can't evaluate whether it's exceptional. I could treat each molecule as a thing and tell people how incredibly many things I…

50 story points!!!

The only thing that matters

Re: Hyperscalers have already outspent most famous US megaprojects

#123

Post by jhide »

wr2 wrote: post #88
manquer wrote: post #73

Earlier quoted context omitted.

GDP adjustments are warranted, but it is more stark than both the estimates suggest. The megaprojects of the previous generations all had decades long depreciation schedules. Many 50-100+ year old railways, bridges, tunnels or dams and other utilities are still in active use with only minimal maintenance Amortized Y-o-Y the current spends would dwarf everything at the reported depreciation schedule of 6(!) years for…

Also railways would always have alternative uses at that time - e.g. logistics in warfare. What other uses do GPU's have that are critical...? lol In addition to your points, this is why I always laugh when people do backward comparisons. What characteristics do they share in common? Very little.

On the topic of warfare, wars are fought differently now. Compute will be mentioned in the same breath as total manufacturing output if a global war between superpowers erupts. In highly competitive industries this is already the case. Compute will be part of industrial mobilization in the same way that physical manufacturing or transportation capacity were mobilized in WWII. I’m not an expert on military computing but my intuition is that FLOPS are probably even more easily fungible into wartime compute than widget makers, and the US was able to go widgets->weapons on an unbelievable scale last time.

Re: Hyperscalers have already outspent most famous US megaprojects

#124

Post by Lerc »

manquer wrote: post #73
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!

GDP adjustments are warranted, but it is more stark than both the estimates suggest. The megaprojects of the previous generations all had decades long depreciation schedules. Many 50-100+ year old railways, bridges, tunnels or dams and other utilities are still in active use with only minimal maintenance Amortized Y-o-Y the current spends would dwarf everything at the reported depreciation schedule of 6(!) years for…

The shovels and labour used to make those things where not depreciated.

The GPUs are the shovels, not the project. AI at any capability will retain that capbibilty forever. It only gets reduced in value by superior developments. Which are built upon technologies that the previous generation developed.

Re: Hyperscalers have already outspent most famous US megaprojects

#125

Post by jiggawatts »

Lerc wrote: post #124
manquer wrote: post #73

Earlier quoted context omitted.

GDP adjustments are warranted, but it is more stark than both the estimates suggest. The megaprojects of the previous generations all had decades long depreciation schedules. Many 50-100+ year old railways, bridges, tunnels or dams and other utilities are still in active use with only minimal maintenance Amortized Y-o-Y the current spends would dwarf everything at the reported depreciation schedule of 6(!) years for…

The shovels and labour used to make those things where not depreciated. The GPUs are the shovels, not the project. AI at any capability will retain that capbibilty forever. It only gets reduced in value by superior developments. Which are built upon technologies that the previous generation developed.

> retain that capbibilty forever

Not really. The base training data cutoff will quickly render models useless as they fail to keep up with developments.

Translating some Farsi news articles about the war was hilarious, Gemini Pro got into a panic. ChatGPT either accused me of spreading fake news, or assumed this was some sort of fantasy scenario.

Re: Hyperscalers have already outspent most famous US megaprojects

#126

Post by loandbehold »

Lerc wrote: post #124
manquer wrote: post #73

Earlier quoted context omitted.

GDP adjustments are warranted, but it is more stark than both the estimates suggest. The megaprojects of the previous generations all had decades long depreciation schedules. Many 50-100+ year old railways, bridges, tunnels or dams and other utilities are still in active use with only minimal maintenance Amortized Y-o-Y the current spends would dwarf everything at the reported depreciation schedule of 6(!) years for…

The shovels and labour used to make those things where not depreciated. The GPUs are the shovels, not the project. AI at any capability will retain that capbibilty forever. It only gets reduced in value by superior developments. Which are built upon technologies that the previous generation developed.

You need to separate training and inference usage of GPUs for this analysis.

Re: Hyperscalers have already outspent most famous US megaprojects

#127

Post by benl »

helterskelter wrote: post #24
bombcar wrote: post #6

Earlier 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…

£10,000 per year for Mr Darcy is 10,000 gold sovereigns per year. A gold sovereign at spot price today is about $1,100. So that’s over 10 million dollars per year in gold-equivalent wealth. Plenty to maintain his estate with.

Alternatively, £10,000 is 200,000 sterling silver shillings per year (20 shillings per pound) for him. A sterling shilling today is about $13.50 at spot price. So that’s $2.7million per year in silver-equivalent wealth. Still plenty!

Re: Hyperscalers have already outspent most famous US megaprojects

#128

Post by tracerbulletx »

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…

Have you seen video of a slime mold searching for food? It grows like crazy in a bunch of simultaneous search paths, expending tons of energy following a rough directional gradient looking for food. Once one of the branches finds the food all of the other search paths shrivel up and die off. I think slime molds are much better analogies for these situations than bubbles.

Re: Hyperscalers have already outspent most famous US megaprojects

#130

Post by delecti »

whattheheckheck wrote: post #63
delecti wrote: post #45

Earlier quoted context omitted.

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 o…

All of the trucks and carts and tools to build the railroads dont exist anymore. Just like the gpus wont either

In that analogy, the GPUs are like if the railroad tracks only lasted 5 years.
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