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Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals

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Re: Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals

#11

Post by rambambram »

> commodification of intelligence

Is HN really this fast!? Everybody already skipped the hard questions whether LLMs are intelligent? 'It' can already be commodified?

So how much time and effort it took from these companies? A couple of years and millions spent on PR? And LLMs are "intelligent" all of a sudden, is what everybody says nowadays?

Especially applicable for programmers: naming things is not only hard, it's also important, and can be very insidious. Remember, marketeers also name things. For example, naming the internet 'the cloud', some 15 years ago.

I can't stop thinking about a quote of one of my favorite authors (Theo Kars): "Progress can only be technical in nature, because knowledge is transferable and wisdom is not." [translated from Dutch]

Re: Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals

#12

Post by root_axis »

rambambram wrote: post #11

> commodification of intelligence Is HN really this fast!? Everybody already skipped the hard questions whether LLMs are intelligent? 'It' can already be commodified? So how much time and effort it took from these companies? A couple of years and millions spent on PR? And LLMs are "intelligent" all of a sudden, is what everybody says nowadays? Especially applicable for programmers: naming things is not only hard, it'…

I'm pretty skeptical of the LLM hype, but I'd say it's fair to describe LLMs as displaying some form verbal intelligence.

Re: Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals

#13

Post by cl42 »

gadflyinyoureye wrote: post #10
cl42 wrote: post #6

Earlier quoted context omitted.

Good point. Do you think the NASDAQ selloff will recover once Korea stabilizes?

Eventually. I'm a bit concerned about it right now. I think SpaceX showed that the AI story is weaker than promoted. This will make people wonder about all the money going into it. If the bubble pops, the blow back on that particular index will be huge. Maybe dotcom bursting huge. But after 15 years QQQ move positive.

SpaceX is a really interesting one, tbh, especially in the context of circular deals... they're making $2b/month leasing their data centers to Anthropic and Google, which is a huge markup.

... but then again... if they are leasing the compute then it implies their own AI work isn't paying off?

In short: I agree with you.

Re: Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals

#14

Post by cl42 »

dragontamer wrote: post #9
firasd wrote: post #7

I think the real question in all sorts of financial setups is really “is the dollar actually worth a dollar”. So when company A invests in company B which buys from company A the actual question is whether the valuation of the investment and the valuation of the purchase is correct or are they getting high on their own supply

A recession is a cash/dollar bubble. First cash/dollars are considered bad so they collapse in price. When the psychology shifts, suddenly the dollar climbs in value and itself bubbles over, causing a recession.

Not sure if you're referring to dollars as an alternative to other forms of cash (e.g., treasuries, money market funds, etc.) or as an alternative to other currencies (e.g., Euro, Yen, etc.). If it's the latter, then I think we've seen recessions and booms where the opposite happens, depending on the balance of payments situation.

Re: Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals

#15

Post by wnmurphy »

rambambram wrote: post #11

> commodification of intelligence Is HN really this fast!? Everybody already skipped the hard questions whether LLMs are intelligent? 'It' can already be commodified? So how much time and effort it took from these companies? A couple of years and millions spent on PR? And LLMs are "intelligent" all of a sudden, is what everybody says nowadays? Especially applicable for programmers: naming things is not only hard, it'…

Intelligence doesn't require sentience.

Think of it like this: if you can offload a task to an AI model that requires reasoning or representing a nonlinear system, you are offloading intelligence.

Re: Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals

#17

Post by stego-tech »

Excellent piece, but it does hinge on the idea that what we’re building is actual AI (still hotly debated), if it can be successfully commoditized like utilities (very unlikely given compute continuously evolves and the hardware cycles of datacenters relative to power plants or water filtration systems), and if such a healthy cycle - should it develop at all - survives the multiple decades needed to effectively provide ROI.

Which is an awful lot of “ifs” to be hedging a bet on, especially at nation-state scales.

Re: Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals

#18

Post by jgord »

Has a competent economist modeled the circularity of these deals ? [ numerically or analytically ]

It seems a healthy economy has a lot of wide circularity .. money circulating is a good thing, a result of a functioning market, tracking the flow of real goods / services. But large corps circulating paper 'self-deals' or debt-swaps seems like a bad thing - a creative accounting practice designed to pump up their stock price/valuation.

How can we _quantify_ the difference ? I guess it would need to match the cash / debt flows against the movement of actual goods and services ??

Not an economist, feel free to weigh in, suggest links.

Re: Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals

#19

Post by zormino »

root_axis wrote: post #12
rambambram wrote: post #11

> commodification of intelligence Is HN really this fast!? Everybody already skipped the hard questions whether LLMs are intelligent? 'It' can already be commodified? So how much time and effort it took from these companies? A couple of years and millions spent on PR? And LLMs are "intelligent" all of a sudden, is what everybody says nowadays? Especially applicable for programmers: naming things is not only hard, it'…

I'm pretty skeptical of the LLM hype, but I'd say it's fair to describe LLMs as displaying some form verbal intelligence.

Exactly this. LLMs are already some form of useful, and have some kind/level of intelligence. We don't need to get to AGI before AI has uses. It isn't a step function and it isn't all or nothing. Even if LLMs get no better than they are today, we will still have valid practical applications that use them.

Re: Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals

#20

Post by dragontamer »

cl42 wrote: post #14
dragontamer wrote: post #9

Earlier quoted context omitted.

A recession is a cash/dollar bubble. First cash/dollars are considered bad so they collapse in price. When the psychology shifts, suddenly the dollar climbs in value and itself bubbles over, causing a recession.

Not sure if you're referring to dollars as an alternative to other forms of cash (e.g., treasuries, money market funds, etc.) or as an alternative to other currencies (e.g., Euro, Yen, etc.). If it's the latter, then I think we've seen recessions and booms where the opposite happens, depending on the balance of payments situation.

Cash/dollars with respect to 10Y Bonds, Stocks, or other instruments.

When Cash becomes king, for whatever reason, it behooves the economy to sell of all other assets and buy Cash.

The closer to cash you get (1Y high grade commercial paper, 1Y Treasury, 3M Treasury, 1 month commercial paper, money market, savings account, dollars under a mattress...), the better you deal with such circumstances.

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