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The (real) dead economy theory

pluralistic.net

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Re: The (real) dead economy theory

#21

Post by nelsonfigueroa »

civilian wrote: post #3

> That's the logic of the whole market today. AI – the world's money-losingest technology – attracts investment at the expense of everything else. I expect Cory to have skepticism about technology that can be exploited for dystopian purposes, but calling AI "the world's money-losingest technology" is out of touch. If AI can support/replace some intellectual work, it'll be revolutionary, and that's what the investment…

> If AI can support/replace some intellectual work, it'll be revolutionary, and that's what the investment bet is about.

That's one big "If". From personal experience AI just tends to burn money. Time will tell if the investment pays off but I disagree that, at this time, it is out of touch to say AI is a money sink.

Re: The (real) dead economy theory

#22

Post by projektfu »

lukol wrote: post #11
civilian wrote: post #3

> That's the logic of the whole market today. AI – the world's money-losingest technology – attracts investment at the expense of everything else. I expect Cory to have skepticism about technology that can be exploited for dystopian purposes, but calling AI "the world's money-losingest technology" is out of touch. If AI can support/replace some intellectual work, it'll be revolutionary, and that's what the investment…

"money-losingest" -> AI already brings in billions and many AI companies could become profitable in little time if they'd stop R&D and simply keep selling what they already have. yes, it's risky and investment-heavy but it's not a bottomless pit with no path to break even. there are many other recent technologies - NFTs? data centers in space? - that would be a better fit for this label.

Is that true? If Anthropic stopped last November at versions 4.5, would people keep using it enough to recoup the investment?

Re: The (real) dead economy theory

#23

Post by badlibrarian »

rokob wrote: post #13

> something is valuable because some people think other people will pay more for it in the future, and not because it does useful things This has been the definition of finance for hundreds of years. I don't know why it comes across here like this is a new phenomenon.

Finance has always run on both: an asset that produces something has a floor. An asset that produces nothing does not. Between the two lies human nature. One way to get rich is to focus on fundamentals. One way to get rich or poor faster is to bet on human nature.

Re: The (real) dead economy theory

#25

Post by thelastgallon »

There was a recent discussion:

The Dead Economy Theory: https://news.ycombinator.com/item?id=48324712

"The underlying purpose of AI is to allow wealth to access skill while removing from the skilled the ability to access wealth". (comment on the discussion above: https://news.ycombinator.com/item?id=48334069)

Re: The (real) dead economy theory

#26

Post by Grombobulous »

civilian wrote: post #3

> That's the logic of the whole market today. AI – the world's money-losingest technology – attracts investment at the expense of everything else. I expect Cory to have skepticism about technology that can be exploited for dystopian purposes, but calling AI "the world's money-losingest technology" is out of touch. If AI can support/replace some intellectual work, it'll be revolutionary, and that's what the investment…

I share your feeling that LLM-based AI is a high-potential technology.

The issue is the objective dollars and cents financials of the situation. It’s literally the technology that is the money-losingest at this time.

The commercial utility of the technology can’t become viable just by being really useful.

There’s a good accounting argument to be made for AI IPOs happening out of a serious need for capital.

I wouldn’t bet money at a casino on this, but if OpenAI went completely out of business or was absorbed into irrelevancy within a calendar year, nobody with a finance background would be surprised. They objectively cannot exist in ~18 months without massive spending cuts or additional cash infusion. And they can’t make their models better and serve more tokens to build that future potential that justify their present valuation without additional capital, which becomes decreasingly efficient as data center build costs skyrocket.

AI has wonderful potential but no amazing product is guaranteed commercial viability. If Uber spends $1500 on tokens per employee they might as well spend $0 on AI and hire more real people to compensate.

I think about how the railroad barons went through a somewhat similar process. By the end of the American railroad buildout, numerous lines became financially unviable within a few short years or decades, some not even really making it into the automobile era. The only railroad business that ended up with any sort of long term profit viability was freight.

Re: The (real) dead economy theory

#27

Post by HerbManic »

ggm wrote: post #17
ZionBoggan wrote: post #10

Earlier quoted context omitted.

Obviously no...? The implications far outweigh the "money sink" notion...

Obviously yes. On evidence alone the path to profit doesn't exist for most of the massive capital sinks. A small number of players At best MAY return on investment, but in the cycle time capital needs a return, most are functionally incapable AGI isn't happening. So, it's incremental improvements on LLM and Generative methods. Any advance which requires more tech inputs demands more capital. Any advance which require…

I have noticed that those that are the most optimistic about AI almost always talk in a future-tence.

It WILL do this, it COULD achieve that etc.

Re: The (real) dead economy theory

#29

Post by pooploop64 »

rokob wrote: post #13

> something is valuable because some people think other people will pay more for it in the future, and not because it does useful things This has been the definition of finance for hundreds of years. I don't know why it comes across here like this is a new phenomenon.

There used to be much more of a belief that the reason this stuff has an appreciable value to speak of is because it's either creating a channel for society's productivity or it's creating a position to skim pennies off of society's productivity. But less and less does it feel like productivity is even in the equation anymore. What the quoted statement describes is much closer to a Ponzi scheme than what finance is actually supposed to be about, but it's getting harder and harder to tell the difference.

Also if the cutoff point for raising concerns about this was hundreds of years ago that really sucks for everyone alive today.

Re: The (real) dead economy theory

#30

Post by koe123 »

lionheart wrote: post #7

I just don't get it. How do you go from writing the kinds of future visions he has to staring at the singularity practically hitting you in the face and calling it "the world's money-losingest technology"? Is it because he isn't actually using the technology for work on a day-to-day basis like a lot of us?

> singularity

I just cant get over this term, do you honestly believe in this? I use AI daily and while it is super useful I see too many limitations for it to “recursively improve and cause an intelligence explosion”.

1. Clearly, the people selling AI with this idea benefit greatly with this promise of infinite upside. Can you can trust them?

2. Singularity essentially requires to handwave away a lot of baked-in issues with LLMs or rely on unrealized innovation.

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