Surely this time we'll learn our lesson and disempower the parasites that create these situations, right? Right guys?
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AI boom risks global financial crash, warn central bankers
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Re: AI boom risks global financial crash, warn central bankers
#42Earlier quoted context omitted.
Are you putting the $XX,XXX-50 under your mattress or investing it in something else productive?
This is the right question. Every company has a list of >WACC IRR projects that it can spend saved money on. If not, it’s a cash cow company that wasn’t growing in the first place and will allow shareholders to use the saved cash for other economically expanding projects.
What software companies will economically expand if the price ceiling on software is really low?
Re: AI boom risks global financial crash, warn central bankers
#43Surely this time we'll learn our lesson and disempower the parasites that create these situations, right? Right guys?
Not this time. This time, we'll bail out them out because they are too big to fail and they need the money and assets. Next time we'll definitely get them. Pinky promise.
> we'll bail out them out
If it’s after the midterms, I’m doubtful. The AI leaders—apart from Dario—have gone particularly partisan. We also have a lot more post-crisis tooling that lets us wipe equity even when bailing out. See, for example, the ‘23 bank failures.
Re: AI boom risks global financial crash, warn central bankers
#44Surely this time we'll learn our lesson and disempower the parasites that create these situations, right? Right guys?
Which parasites?
Re: AI boom risks global financial crash, warn central bankers
#45Meanwhile AI has gotten so good it can just about one shot a SaaS app. I’m not worried about it…
Yeah but the investments arent aiming for churning out SaaS apps. Its to automate large swathes of intellectual labour. Of which only SWE has been cracked yet. There is a question mark as to if the others will crack. If they arent then these investments will collapse from speculation down to reality. That possibility is what is being discussed here As to whether that will happen, I think that risk is real. Because cl…
We will find out how much of work is given to people just so that there's a person/company associated with a technical decision. I personally think this might be quite high.
Re: AI boom risks global financial crash, warn central bankers
#46Re: AI boom risks global financial crash, warn central bankers
#47Earlier quoted context omitted.
This is the right question. Every company has a list of >WACC IRR projects that it can spend saved money on. If not, it’s a cash cow company that wasn’t growing in the first place and will allow shareholders to use the saved cash for other economically expanding projects.
What software companies will economically expand if the price ceiling on software is really low?
Economy != software companies. Maybe there needs to be a capital rotation out of tech? That’s speaking beyond my expertise though (and imo is a little too doomer). Continuing the hypothetical through: Healthcare, industrials, financial services and many other verticals have plenty of growth opportunities.
Otherwise it would probably be the software companies that are the most focused on last-mile details (where AI in my experience has the most trouble). I expect that as consumers are faced with more and more AI slop SaaS they will be increasingly willing and able to pay for quality.
Re: AI boom risks global financial crash, warn central bankers
#48Earlier quoted context omitted.
No, it's correct. The best (short-term) case is that they become eternal parasites. If they fail to do that, they'll bring a lot down with them when they fall.
>The best (short-term) case is that they become eternal parasites. Producing a product that delivers value and people are willing to pay for makes you a "parasite"? Sure, it might cause massive disruptions to the labor market, but that's mostly orthogonal to whether it's a "parasite" or not. Mechanized farming has almost wiped out agricultural employment (compared to pre-industrial levels), but that doesn't make trac…
tractor manufacturers or fertilizer companies didn't suck down the work of generations of predecessors in a questionably-legal fashion only to turn around and sell a heavily discounted version of that back to them. I'm not sure where "parasite" becomes appropriate, but your analogy is poor.
Re: AI boom risks global financial crash, warn central bankers
#49Meanwhile AI has gotten so good it can just about one shot a SaaS app. I’m not worried about it…
While I don't agree with your premise at all, even if it could one shot a SaaS product (a statement so vague it's meaningless) I don't think there's much of an argument for why that's economically useful. A lot of SaaS has free software/open source equivalents anyway (how else do you think the clanker's are able to plagiarize it?). People still pay for Office even though you could easily use LibreOffice, or GitHub when you could self host Forgejo. It's like when anthropic made a big deal out of making a broken compiler. Neat, so, after ingesting all of open source and burning a trillion tokens you ended up with something worse than what's already out there; and instead of doing something economically useful like giving a person money to build it or supporting the open source ecosystem, you're just wasting energy on datacenters.
Re: AI boom risks global financial crash, warn central bankers
#50Well there's also the fact that fundamentally and ultimately, AI is incompatible with the economic system. Capitalism is rooted in human labour having positive economic value, and hence demand. AI will ultimately automate all labour, making the economic value 0. Eventually capital generation will simply die and the system crashes.