Speculative Growth and the AI "Bubble" [pdf]
economics.mit.edu
Speculative Growth and the AI "Bubble" [pdf]
1–10 of 71 posts
Re: Speculative Growth and the AI "Bubble" [pdf]
#2Tl;dr is:
A temporary overvaluation can build enough real capital that the economy lands in a permanently higher-capital equilibrium, even after the inflated valuations correct. The future for AI companies may look rather iffy, but the whole economy may not be as screwed as some fear.
Re: Speculative Growth and the AI "Bubble" [pdf]
#3Tl;dr is: A temporary overvaluation can build enough real capital that the economy lands in a permanently higher-capital equilibrium, even after the inflated valuations correct. The future for AI companies may look rather iffy, but the whole economy may not be as screwed as some fear.
the guy wrote a paper on what a VC is, amazing
Re: Speculative Growth and the AI "Bubble" [pdf]
#4Tl;dr is: A temporary overvaluation can build enough real capital that the economy lands in a permanently higher-capital equilibrium, even after the inflated valuations correct. The future for AI companies may look rather iffy, but the whole economy may not be as screwed as some fear.
Surely that outcome requires that the capital retains its value/usefulness. One advantage of crypto and AI is that they can utilise massively parallel computational resources (and don't have tight latency requirements, like gaming) in an age where we've hit the physical limits of sequential computation.
If the "higher capital" that results from an AI boom consists of massively parallel computational resources that currently can only be fully utilised by AI and crypto, and if those things turn out to be a bust, the "higher capital" only has value if we find something else to do with it.
Maybe we will...
Re: Speculative Growth and the AI "Bubble" [pdf]
#5Tl;dr is: A temporary overvaluation can build enough real capital that the economy lands in a permanently higher-capital equilibrium, even after the inflated valuations correct. The future for AI companies may look rather iffy, but the whole economy may not be as screwed as some fear.
Doesn't that only apply if the capital is reusable? If we end up with a bunch of data centre GPUs after an AI bubble collapse, there's no guarantee those GPUs will find productive use for other things.
It's like the tulip bubble of the 17th century [1]. Having a bunch of money tied up in useless tulip bulbs didn't do anything productive after the collapse.
Re: Speculative Growth and the AI "Bubble" [pdf]
#6Tl;dr is: A temporary overvaluation can build enough real capital that the economy lands in a permanently higher-capital equilibrium, even after the inflated valuations correct. The future for AI companies may look rather iffy, but the whole economy may not be as screwed as some fear.
The author starts out with a quote from Keynes about the speculation/growth from 1925-1929, is the permanently high-capital equilibrium supposed to happen 10 years after the crash or after we win the world war that follows..?
Re: Speculative Growth and the AI "Bubble" [pdf]
#7Tl;dr is: A temporary overvaluation can build enough real capital that the economy lands in a permanently higher-capital equilibrium, even after the inflated valuations correct. The future for AI companies may look rather iffy, but the whole economy may not be as screwed as some fear.
The author starts out with a quote from Keynes about the speculation/growth from 1925-1929, is the permanently high-capital equilibrium supposed to happen 10 years after the crash or after we win the world war that follows..?
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Re: Speculative Growth and the AI "Bubble" [pdf]
#8Tl;dr is: A temporary overvaluation can build enough real capital that the economy lands in a permanently higher-capital equilibrium, even after the inflated valuations correct. The future for AI companies may look rather iffy, but the whole economy may not be as screwed as some fear.
The reality will be something more like this-
Re: Speculative Growth and the AI "Bubble" [pdf]
#9Tl;dr is: A temporary overvaluation can build enough real capital that the economy lands in a permanently higher-capital equilibrium, even after the inflated valuations correct. The future for AI companies may look rather iffy, but the whole economy may not be as screwed as some fear.
Surely that outcome requires that the capital retains its value/usefulness. One advantage of crypto and AI is that they can utilise massively parallel computational resources (and don't have tight latency requirements, like gaming) in an age where we've hit the physical limits of sequential computation. If the "higher capital" that results from an AI boom consists of massively parallel computational resources that cu…
Do you believe that machine learning or even specifically LLMs will "bust" out of existence?
The model in my head is more like DotCom telecom. The massive overbuild in fiber was eventually used and even used for the purpose that it was imagined for during the boom. It's just that the companies that built it mostly went under and new owners acquired it at a profit-supporting price.
Re: Speculative Growth and the AI "Bubble" [pdf]
#10The book Boom argues something similar