Posted by angry_impala 4 days ago
Ray Dalio just found his next topic of conversation. The debt burden of the average AI agent. Those agents better get PRODUCING. GO WRITE ME SOME CODE CLAUDE!
Sure, smartest CFO's on the planet together with CEO's just collectively buying vaporware. Most of them have access to best metrics on the consumer side, and internals on where the industry will be in 1-2 years.
Maybe, just maybe, they can see how AI will eat the world, the same way software once did but much faster, hence they need these investments. what a crazy theory, right?
Just think about it for one second.. What if... AI that just change professions of people in Math, software dev, etc. Will keep changing any knowledge work and by doing that will accumulate a lot of cash. What if?
But I don't think they see it in ideological terms.
For them, the bottom line is that it's basically going to double cloud revenue over time.
How many times in history do you get to literally increase an existing revenue stream by 100%?
That's exactly what the zeitgeist was in 2007. The "smartest" guys were loading up on collateralized debt obligations. They were the sure thing. The music was never, ever going to stop.
Something you need to realize is that the "smartest" in our society aren't really the smartest. They are members of a group that exists on inertia and a desire to maintain an egotistical and social incumbency. They rarely suffer real consequences, least of all from their own decisions and actions.
These are the same kinds of people who looked at Elizabeth Holmes' business idea and were going to have your health decisions guided by someone who couldn't finish a bachelor's degree in biochemistry, or any other bachelor's degree. They were in tech, they were in academia (though apparently not at the University of Missouri [0]), they were in finance, they were in media. These phenomenons build upon themselves because it's a bunch of people in a club who can't admit to each other that the lemonade is really piss.
When there are questions being posed by people who are actually informed, who don't have a vested interest, those questions need to be answered. Even if the answer is "piss".
[0]https://www.darkdaily.com/2019/07/15/skeptical-missouri-path...
These guys are investing now because they are expecting golden mountains in two years. But the tech isn't guaranteed to keep expanding that quickly.
It could end up similar to the dotcom crash. All the promises of the 90s came true. But it took 12 more years, the smartphone and 3G/4G for it to happen. The realisation that it wouldn't happen next year was what imploded that bubble.
But that's a text book invest signal. You have market that is ready, and all you have to do, is educate, sell, or pour some money in startups that shape the message correctly to consumers.
In this case there's even more of that because AI has so many negatives for society too. Those will take time to deal with. It's not just about the message. In that sense the market is not really there yet. People have to see the value in this and they will do it in their own time.
Microsoft is putting a lot of pressure on this 'adoption' but it causes resentment at work, people don't like to be told what to do, especially by a vendor.
But the difference was the number of jobs replaced was limited to only a few categories and it happened gradually. AI stands to change things a lot faster and while I do think other jobs will emerge I doubt they will make up the full numbers of the ones lost and it'll also happen so fast that society will have a tough time adapting :(
If so, there’s no doomsday scenario coming related to debt.
It’s not like all the infrastructure just disappears and becomes useless in any non-catastrophic scenario.
The economy doesn’t collapse if the capital spend was useful. Demand is extremely high. Capabilities are increasing. Why would we stop renting out these GPUs in the next 5 years?
I’ve heard some economists make excellent points about a bubble being unavoidable as we’ve created a new general purpose technology and that historically always creates a bubble. Fair enough. We’ll get more GPUs built than we actually needed. That’s not really a catastrophic outcome. It’s a lot easier to repurpose a GPU than a rail line. We survived that infrastructure overbuild easily enough.