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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

#201

Post by mfuzzey »

brookst wrote: post #197
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…

I’m not sure tax depreciation rates are the best measure here. Those GPUs will be used for much longer than 6 years, and the returns from the businesses will be an order of magnitude longer.

actually the physical lifetime (not financial depreciation) for AI data center GPUs is even lower (3 to 4 years)

Re: Hyperscalers have already outspent most famous US megaprojects

#202

Post by wr2 »

naasking wrote: post #186
wr2 wrote: post #88

Earlier quoted context omitted.

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.

> What other uses do GPU's have that are critical...? lol GPUs are essential to every kind of scientific and engineering simulation you can think of. AI-accelerated simulations are a huge deal now.

GPUs that have lives of..?

Now compare that with the life a rail road. Amusing.

Re: Hyperscalers have already outspent most famous US megaprojects

#203

Post by brookst »

cousin_it wrote: post #175
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!

Wild graphic. US spending on one flying killing machine (the F-35) is comparable to total spending on the Marshall plan to reconstruct Europe after WWII, or the interstate highway system, or all datacenters combined. Priorities!

It’s hazardous to blend fixed and variable costs.

Re: Hyperscalers have already outspent most famous US megaprojects

#204

Post by grandchild »

brookst wrote: post #198
etempleton wrote: post #194

Earlier quoted context omitted.

I think for many, if LLMs and AI only improves marginally in the next 5-10 years it is effectively a dead end. The capital expenditure necessitates AI does something exponentially more valuable than what it does now. I think we are saying the same thing.i just think the pull back on AI will be dramatic unless something amazing happens very soon.

I just don’t see it. Both professionally and personally I’m producing so much more now. Back burner projects that weren’t worth months of my time are easily worth a few hours and $20 or whatever. Why would I pull back?

You're forgetting that the 20$ are not a sustainable price point. Would your backburner personal app thingy be worth 200$?

Re: Hyperscalers have already outspent most famous US megaprojects

#205

Post by wr2 »

brookst wrote: post #198
etempleton wrote: post #194

Earlier quoted context omitted.

I think for many, if LLMs and AI only improves marginally in the next 5-10 years it is effectively a dead end. The capital expenditure necessitates AI does something exponentially more valuable than what it does now. I think we are saying the same thing.i just think the pull back on AI will be dramatic unless something amazing happens very soon.

I just don’t see it. Both professionally and personally I’m producing so much more now. Back burner projects that weren’t worth months of my time are easily worth a few hours and $20 or whatever. Why would I pull back?

Lol are people like you going to be enough to support the large revenues? Nope.

A firm that see's rising operating expenses but no not enough increase in revenue will start to cut back on spending on LLMs and become very frugal (e.g. rationing).

Re: Hyperscalers have already outspent most famous US megaprojects

#206

Post by therobots927 »

sixhobbits wrote: post #196
spprashant wrote: post #174

I think all misgivings about AI would go away fast, if it solved one important problem for humanity. Carbon nanotubes for space elevators, sustainable nuclear fusion, or something in that ilk.

Personalized medical treatment looks like the most promising candidate so far, would that do it for you?

What exactly does “personalized medical treatment” entail?

Writing prescriptions?

Ok, I can see how AI could theoretically do that (assuming it doesn’t hallucinate and kill a bunch of people). Oh and don’t think it’ll be so easy to give AI the legal authority to prescribe controlled substances. And insurance companies may take issue with expensive prescriptions written by a chat bot.

Perform surgeries? Stitch wounds?

That’s decades away. And that also opens a legal can of worms. Maybe the AI lawyers can figure something out.

Re: Hyperscalers have already outspent most famous US megaprojects

#207

Post by voakbasda »

brookst wrote: post #200
malfist wrote: post #190

Earlier quoted context omitted.

Each of these GPUs pull up to a kilowatt of power. The average commercial power cost is 13.4 ¢/kWh. That means running a single H100 full tilt 24/7 is a power operationing cost of $1,100 per card per year. In three years the current generation of GPUs will be 50% or more faster. In six years your talking more than 100% faster. For the same energy costs. If you're running a GPU data center on six year old GPUs, your c…

Sure. But if that fully depreciates, $1100/year GPU produces $20k of economic benefit, would you decommission it as long as there is demand?

I want to see math on how a single GPU will pull down that much revenue, because that seems like a dubious outcome.

Re: Hyperscalers have already outspent most famous US megaprojects

#208

Post by wr2 »

TeMPOraL wrote: post #165
crote wrote: post #50

Earlier quoted context omitted.

> 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…

GPUs are consumables, not infrastructure. Model weights are the lasting thing. It's always like that with software. You can still run an OS or a program made 20 years ago, in some cases that program may in fact have no modern replacements available (think niche domains) - meanwhile, in those 20 years, you've probably churned through 5-10 generations of computing hardware.

This is completely false - GPUs are not consumables, they are factors of production.

Models are technologies. Without the GPUs the technology is not accessible.

You sound like someone who thinks they have a strong understanding of economics when they don't.

Re: Hyperscalers have already outspent most famous US megaprojects

#209

Post by vmbm »

brookst wrote: post #197
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…

I’m not sure tax depreciation rates are the best measure here. Those GPUs will be used for much longer than 6 years, and the returns from the businesses will be an order of magnitude longer.

The jury is still out on this. Those tax based deprecation schedules are largely a relic of traditional data centers, where workloads are fairly moderate compared to AI use cases. Additionally, power and rack space constraints can complicate things quite a bit. If next gen chips are significantly more efficient and you are currently constrained by power availability, you might pull your old servers and replace them with the newer ones regardless of how much useful life you have left.

Re: Hyperscalers have already outspent most famous US megaprojects

#210

Post by somenameforme »

wahern wrote: post #87
somenameforme wrote: post #42

Earlier quoted context omitted.

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…

And yet the homeownership rate in 1950 was 53% (an all-time high up to that point) compared to 65% today: https://www.huduser.gov/portal/sites/default/files/pdf/Housi... Only 80% of units had private indoor toilets or showers. It is notable that the median monthly rent was $35/month on a median income of $3000, so ~15% of income spent on rental housing. But it's interesting reading that report because a significant f…

What an interesting paper you found! Home ownership stats in contemporary times are quite misleading because of debt. Most home owners now are still paying rent in the form of a mortgage to a bank. In the 50s most home owners genuinely owned their homes 'free and clear'. The exact rate was 56% in the 1951 per your paper (which was a local low), and now it's at 40% which is a local high. And the contemporary demographics are all messed up - it's largely driven by older to elderly individuals in non-urban low-income states.

As for number of occupants, the 50s had a sustainable fertility rate. That means, on average, every woman was having at least 2 kiddos. So a median 4 occupant house would be husband, wife, and 2 children living in a place with a master bedroom, kids room, a combined kitchen/dining room, and a living room. Bathrooms, oddly enough, did not count as rooms. So in modern parlance it'd mostly be a 2/2 for up to 14% of one person's median income, and 0% in most cases as most people 'really' owned their homes.

We definitely have lots more gizmos, but I feel like that's an exchange that relatively few people would make in hindsight.

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