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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

#71

Post by cm2012 »

bombcar wrote: post #60
psychoslave wrote: post #51

Earlier quoted context omitted.

~£800,000/year when compared to median value in current UK? Outrageous is relative sure, but for most people out there it should be no surprise they would feel that as an outrageously odd distribution of wealth. https://en.wikipedia.org/wiki/Income_in_the_United_Kingdom

The point is that ~£800,000/year is high, even possibly "very high" but it is not "most wealthy man in Britain" high, and certainly nowhere near "hire as many people as worked for Darcy".

Its more like making 800k per year today in India, where a lot of people make much less so you can have servants

Re: Hyperscalers have already outspent most famous US megaprojects

#72

Post by 0xbadcafebee »

keeda wrote: post #55
0xbadcafebee wrote: post #23

Earlier quoted context omitted.

Fwiw, Railroads were the reason for some of the biggest bank collapses in history. Panic of 1873 was literally called "The Great Depression" (until a greater depression hit). 20 years later was the Panic of 1893. Both were due to over-investment and a bubble bursting, and they took out tons of banks and businesses. We're seeing exactly the same thing with AI, as there is massive investment creating a bubble without a…

> We're seeing exactly the same thing with AI, as there is massive investment creating a bubble without a payoff. ... And so far there's no evidence that all this investment has generated more profit for the users of AI. If you look around a bit, you will find evidence for both. Recent data finds pretty high success in GenAI adoption even as "formal ROI measurement" -- i.e. not based on "vibes" -- becomes common: htt…

75% report positive ROI (and the VPs are much more "optimistic" than the middle managers who are closer to the work) - but how much ROI? 1%? The fact that they don't quote a figure at all is pretty telling. And that's the ROI of the people buying the AI services, which are often heavily subsidized. If it costs a billion dollars to give a mid-sized company a 1% ROI, that doesn't sound sustainable.

I would love to see another report that isn't a year old with actual ROI figures...

Re: Hyperscalers have already outspent most famous US megaprojects

#73

Post by manquer »

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!

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 the GPUs - the largest line item.

Re: Hyperscalers have already outspent most famous US megaprojects

#74

Post by SlinkyOnStairs »

keeda wrote: post #55
0xbadcafebee wrote: post #23

Earlier quoted context omitted.

Fwiw, Railroads were the reason for some of the biggest bank collapses in history. Panic of 1873 was literally called "The Great Depression" (until a greater depression hit). 20 years later was the Panic of 1893. Both were due to over-investment and a bubble bursting, and they took out tons of banks and businesses. We're seeing exactly the same thing with AI, as there is massive investment creating a bubble without a…

> We're seeing exactly the same thing with AI, as there is massive investment creating a bubble without a payoff. ... And so far there's no evidence that all this investment has generated more profit for the users of AI. If you look around a bit, you will find evidence for both. Recent data finds pretty high success in GenAI adoption even as "formal ROI measurement" -- i.e. not based on "vibes" -- becomes common: htt…

> The trustworthiness, salience and nuances of this report is worth discussing, but unfortunately reports like this gets no airtime in the HN and the media echo chamber.

It honestly just isn't that interesting. (Being most notable for people misunderstanding and misrepresenting the chart on page 46 of the report as being "ROI" rather than "ROI measurement")

In terms of ROI figures, it's really just a survey with the question "Based on internal conversations with colleagues and senior leadership, what has been the return on investment (ROI) from your organization's Gen AI initiatives to date?".

This doesn't mean much. It's not even dubiously-measured ROI data, it's not ROI data at all, it's just what the leadership thinks is true.

And that's a worrying thing to rely on, as it's well documented (and measured by the report's next question) that there's a significant discrepancy in how high level leadership and low-level leadership/ICs rate AI "ROI".

One of the main explanations of that discrepancy being Goodhart's law. A large amount of companies are simply demanding AI productivity as a "target" now, with accusations of "worker sabotage" being thrown around readily. That makes good economy-wide data on AI ROI very hard to get.

Re: Hyperscalers have already outspent most famous US megaprojects

#75

Post by lukeschlather »

therobots927 wrote: post #34
lukeschlather wrote: post #27

Earlier quoted context omitted.

Equating this buildout with LLMs is also a category error. Waymo (self-driving cars) depends on the same infrastructure, and there are a variety of other robotics programs which are actually functioning, you can see them in operation. They all require a lot of GPUs to train and run the models which operate the robotics.

What % of GPUs are running self driving software or robotics? And what is the ROI on either of those right now?

The answers to both of those questions are pretty guarded trade secrets. Amazon and Google just to name a couple examples are very profitable companies and I would not bet on them investing all this money without real use cases where profit is likely. Amazon is adding thousands of new robots to their factories every year.

Re: Hyperscalers have already outspent most famous US megaprojects

#76

Post by rangestransform »

throwaway27448 wrote: post #47
lukeschlather wrote: post #27

Earlier quoted context omitted.

Equating this buildout with LLMs is also a category error. Waymo (self-driving cars) depends on the same infrastructure, and there are a variety of other robotics programs which are actually functioning, you can see them in operation. They all require a lot of GPUs to train and run the models which operate the robotics.

It's not clear that Waymo is an improvement over existing infrastructure so much as ensuring that fewer humans benefit from each car ride (which was already pathetically low).

It’s an improvement over spending 1b/mi building public transit in HCOL car dependent areas

Re: Hyperscalers have already outspent most famous US megaprojects

#77

Post by rangestransform »

measurablefunc wrote: post #35
losvedir wrote: post #31

Does anyone know what's included in "datacenter capex"? In particular, does that include spending for associated power generation? Because whether or not the AI craze pans out, if we've built a whole bunch of power plants (and especially solar, wind, hydro, etc) that would be a big win.

You can't run a data center on solar or wind (even w/ batteries included). Everything they're building runs on gas & coal like what Musk got running for xAI.

That’s because Rs let NIMBYs and the fossil fuel lobby call the shots, and Ds let NIMBYs and degrowthers call the shots. I bet China isn’t powering their datacenters with gas turbines

Re: Hyperscalers have already outspent most famous US megaprojects

#79

Post by SlinkyOnStairs »

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!

> Makes it a little less dramatic. But also shows what a big *'n deal the railroads were!

It also makes it more dramatic, consider the programs on the list and what they have in common.

* The Apollo program. A government-funded science project. No return on investment required.

* The Manhattan Project. A government-funded military project. No return on investment required.

* The F-35 program. A government funded military project. No return on investment required.

* The ISS. A government funded science project. No return on investment required.

* The Interstate Highway System. A government funded infrastructure project. No return on investment required.

* The Marshall Plan. A government funded foreign policy project. No return on investment required.

The actual return on investment for these projects is in the very long term of decades; Economic development, national security, scientific progress that benefits the entire country if not the entire world.

Consider the Marshall Plan in particular. It's a massive money sink, but it's nature as a government project meant it could run at losses without significant economic risk and could aim for extremely long term benefits. It's been paying dividends until January last year; 77 years.

And that dividend wasn't always obvious; Goodwill from Europe towards the US is what has prevented Europe from taking similar actions as China around the US' Big Tech companies. Many of whom relied extensively on 'Dumping' to push European competitors out of business, a more hostile Europe would've taken much more protectionist measures and ended up much like China, with it's own crop of tech giants.

And then there's the two programs left out. The railroads and AI datacenters. Private enterprise that simply does not have the luxury of sitting on it's ass waiting for benefits to materialize 50 years later.

As many other comments in this thread have already pointed out: When the US & European railroad bubbles failed, massive economic trouble followed.

OpenAI's need for (partial) return on investment is as short as this year or their IPO risks failure. And if they don't, similar massive economic trouble is assured.

Re: Hyperscalers have already outspent most famous US megaprojects

#80

Post by yabutlivnWoods »

SlinkyOnStairs wrote: post #79
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!

> Makes it a little less dramatic. But also shows what a big *'n deal the railroads were! It also makes it more dramatic, consider the programs on the list and what they have in common. * The Apollo program. A government-funded science project. No return on investment required. * The Manhattan Project. A government-funded military project. No return on investment required. * The F-35 program. A government funded mili…

You're actually arguing those highly technical engineering projects provided nothing to humanity investing labor in them because they were not a financial success?

Just confirms my suspicion HN is not a forum for intellectual curiosity. It's been entirely subsumed by MBAs and wannabe billionaires.

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