depends, on which side, of the tarrifs an economy happens to be
and where, geopoliticaly.
AI, or whatever a mountain of processors churning all of the worlds data will be called later, still has no use case, other than total domination, for which it has brought a kind of lame service to all of the totaly dependent go along to get along types, but nothing approaching an actual guaranteed answer for anything usefull and profitable, lame, lame, infinite fucking lame tedious shit
that has prompted most people to.stop.even trying, and so a huge vast amount of genuine human
inspiration and effort is gone
Pretty sure the stagnation has a cause beginning in 2025 and that has to do with things like: Canada refusing to buy ALL American liquor in retaliation. China refusing to buy ANY soy beans in retaliation. In retaliation for what you might ask?
I leave that as an exercise for the reader. If you are unable to answer that question honestly to yourself you need to seriously consider that your cognitive bias might be preventing you from thinking clearly.
Anecdotally, our company's next couple quarters are projected to be a bloodbath. Spending is down everywhere, nearly all of our customers are pushing for huge cuts to their contracts, and in turn literally any costs we can jettison to keep jobs is being pushed through. We're hearing the same from our customers.
AI has been the only new investment our company has made (half hearted at that). I definitely get the sense that everyone pretending things are fine to investors, meanwhile they are playing musical chairs.
Back in my economics classes at college, a professor pointed out that a stock market can go up for two reasons: On one hand, the economy is legitimately growing and shares are becoming more valuable. But on the other hand, people and corporations could be cutting spending en masse so there's extra cash to flood the stock markets and drive up prices regardless of future earnings.
> Back in my economics classes at college, a professor pointed out that a stock market can go up for two reasons
Reason #1 is lower interest rates, which increase the present value of future cash flows in DCF models. A professor who does not mention that does not know what they are talking about.
At the end of the day, if you look at almost any government, roughly 2/3 of expenses go towards healthcare and education things which, AI worlkflow are very likely continue offsetting a larger and larger percentage of the costs on.
Can we still have a financial crisis from all this investment going bust because it might take too long for it to make a difference in manufacturing enough automation hardware for everyone? Yes.
But, the fundamentals are still there, parents will still send their kids to some type of school, and people will trade good in exchange for health services. That's not going to change. Neither will the need to use robots in nursing homes, I think that assumption is safe to make.
What's difficult to predict change in is adoption in manufacturing, and repairs ( be that repairing bridges or repairing your espresso machine ) because that is more of a "3D" issue and hard to automate reliably (think about how many gpus today would it actually take to get a robot to reason out and repair a whole in your drywall), given that your RL environments and training data needs grow exponentially. Technically, your phone should have enough gpu performance to do your taxes with a 3B model and a bunch of tools, eventually it'll even be better than you at it. But to tun an actual robot with multiple cameras and stuff doing troubleshooting and decision making.... you're gonna need a whole 8x rack of gpus for that.
And that's what makes it now difficult to predict what's going to happen. The areas under the curve can vary widely. We could get a 1B AGI model in 6 months, or it could take 5 years for agentic workflows to fully automate everyones taxes and actually replace 2/3 of radiology work...
Either way, while theres a significant chance of this transition to the automation age being rough, I am overall quite optimistic given the fundamentals of what governments actually spend majority of their money on.
Talk to an educator.
Education is being actively harmed by AI. Kids don’t want to do any difficult thinking work so they aren’t learning. (Literally any teacher you talk to will confirm this)
AI in medicine is challenging because AI is bad at systems thinking, citation of fact and data privacy. Three things that are absolutely essential for medicine. Also everything for healthcare needs regulatory approval so costs go up and flexibility goes down. We’re ten years away from any AI for medicine being cost effective.
Having an AI do your taxes is absurd. They regularly hallucinate. I 100% guarantee that if you do your taxes with AI you won’t pass an audit. AI literally can’t count. You’re be better off asking it to vibecode a replacement for TurboTax. But again the product won’t be AI it will be traditional code.
Trying for AGI down the road of an LLM is insanity sauce. It’s a simulated language center that can’t count, it can’t do systems thinking. It can’t cite known facts. We’re not six months away we’re a decade or a “cost effective fusion” distance (defined as perpetually 20 years in the future from any point in time)
There are at least six Silicon Valley startups working on AGI. Not a single one of them has published an architecture strategy that might work. None of the “almost AGI” products that have ever come out have a path to AGI.
Meh is the most likely outcome. I say this as someone who uses it a lot for things it is good at.
> I was discussing with a friend that my biggest concern with AI right now is not that it isn't capable of doing things... but that we switched from research/academic mode to full value extraction so fast that we are way out over our skis in terms of what is being promised, which, in the realm of exciting new field of academic research is pretty low-stakes all things considered... to being terrifying when we bet policy and economics on it.
That isn't overly prescient or anything... it feels like the alarm bells started a while ago... but wow the absolute "all in" of the bet is really starting to feel like there is no backup. With the cessation of EVs tax credits, the slowdown in infra spending, healthcare subsidies, etc, the portfolio of investment feels much less diverse...
Especially compared to China, which has bets in so many verticals, battery tech, EVs, solar, then of course all the AI/chips/fabs. That isn't to say I don't think there are huge risks for China... but geez does it feel like the setup for a big shift in economic power especially with change in US foreign policy.
I'll offer two counter-points. Weak but worth mentioning. wrt China there's no value to extract by on-shoring manufacturing -- many verticals are simply uninvestable in the US because of labor costs and the gap of cost to manufacture is so large it's not even worth considering. I think there's a level of introspection the US needs to contend with, but that ship has sailed. We should be forward looking in what we can do outside of manufacturing.
For AI, the pivot to profitability was indeed quick, but I don't think it's as bad as you may think. We're building the software infrastructure to accomodate LLMs into our work streams which makes everyone more efficient and productive. As foundational models progress, the infrastructure will reap the benefits a-la moore's law.
I acknowledge that this is a bullish thesis but I'll tell you why I'm bullish: I'm basically a high-tech ludite -- the last piece of technology I adopted was google in 1996. I converted from vim to vscode + copilot (and now cursor.) because of LLMs -- that's how transformative this technology is.
Another thing to note about China: while people love pointing to their public transit as an example of a country that's done so much right, their (over)investment in this domain has led to a concerning explosion of local government debt obligations which isn't usually well-represented in their overall debt to GDP ratios many people quote. I only state that to state that things are not all the propaganda suggests it might be in China. The big question everyone is asking is, what happens after Xi. Even the most educated experts on the matter do not have an answer.
I, too, don't understand the OP's point of quickly pivoting to value extraction. Every technology we've ever invented was immediately followed by capitalists asking "how can I use this to make more money". LLMs are an extremely valuable technology. I'm not going to sit here and pretend that anyone can correctly guess exactly how much we should be investing into this right now in order to properly price how much value they'll be generating in five years. Except, its so critical to point out that the "data center capex" numbers everyone keeps quoting are, in a very real (and, sure, potentially scary) sense, quadruple-counting the same hundred-billion dollars. We're not actually spending $400B on new data centers; Oracle is spending $nnB on Nvidia, who is spending $nnB to invest in OpenAI, who is spending $nnB to invest in AMD, who Coreweave will also be spending $nnB with, who Nvidia has an $nnB investment in... and so forth. There's a ton of duplicate-accounting going on when people report these numbers.
It doesn't grab the same headlines, but I'm very strongly of the opinion that there will be more market corrections in the next 24 months, overall stock market growth will be pretty flat, and by the end of 2027 people will still be opining on whether OpenAI's $400B annual revenue justifies a trillion dollars in capex on new graphics cards. There's no catastrophic bubble burst. AGI is still only a few years away. But AI eats the world none-the-less.
My point is not that value extraction wouldn't happen, my point is simply that in addition to the value extraction we also made other huge shifts in economic policy that taken together really seem to put us on a path towards an "AGI or bust" situation in the future.
Is that a bit hyperbolic? isn't this just the same as dotcom and housing bubbles before where we pivoted a bit too hard into a specific industry? maybe... but I also am not sure it would be wise to assume past results will indicate future returns with this one.
> In those intervening years, a bunch of AI companies might be unable to pay back their debts.
Dumb question: isn't a lot of the current investment in the form of equity deals and/or funded by existing tech company profit lines? What do we actually know about the debt levels and schedules of the various actors?
Reminder: If you're going to feel doomer about how tech capex represents like nn% of US GDP growth, you should do some research into what percentage of US GDP growth, especially since 2020, has been the result of government printing. Arguably, our GDP growth right now is more "real" than the historical GDP growth numbers between 2020-2023, but all of it is so warped by policy that its hard to tell what's going on.
We're in extremely unprecedented times. Sometimes maybe good, sometimes maybe shit. The old rules don't apply. Etc.
This is how I'm starting to view many of these things. It's just that the metrics we use to evaluate the economy are getting out of sync. For instance, if "consumer sentiment is at Great Recession levels", why do we need some other indicator to accept that there's a problem? Isn't that a bad thing on its own?
"Bad" is a judgment call. Trump approval ratings haven't dipped that far, so Congressional Republicans won't dare abandon him and there's not much political will for change.
It might change if we get into millions of foreclosures like the great recession and the pain really hits home. From what I can tell right now they're in wartime mode where they just need to buckle down until Trump wins and makes other countries pay for tariffs or something.
We're definitely not in a crash yet, but it does feel like we're the roller coaster just tipping over the peak: unemployment is rising for the first time in a couple years, there's basically no GDP growth apart from AI investment, and the yield curves look scary. The crash could be any second now, especially because tech earnings week is coming up and that could indicate how much revenue, or lack thereof, the AI investment is bringing in.
So the crash is only official once Wall Street's exuberance matches the economy as perceived by it's workforce? Is that a crash or just a latent arrival of the signal itself?
Even in the unlikely event AI somehow delivers on its valuations and thereby doesn't disappoint, the implied negative externalities on the population (mass worker redundancy, inequality that makes even our current scenario look rosy, skyrocketing electricity costs) means that America's and the world's future looks like a rocky road.
I personally hope AI doesn't quite deliver on its valuations, so we don't lose tons of jobs, but instead of a market crash, the money will rotate into quantum and crispr technologies (both soon to be trillion dollar+ industries). People who bet big on AI might lose out some but not be wiped out. That's best casing it though.
separate from this article, I don't have a very high opinion of the author. he has an astonishing record of being uninformed and/or just plain wrong in everything I've ever heard him write about.
but as far as this article, the "tech capex as a percentage of GDP growth" is an incredible cherrypicking of statistics to create a narrative... when tech became a boodbath starting in 2022, the rest of the economy continued on strong. all the way until 2025, the rest of the economy was booming while tech layoffs and budget cuts after covid were exploding. so starting that chart in early 2023 when tech had bottomed out (compared to the rest of the economy) is misleading. tech capex as a percentage of the overall GDP has been consistently rising since 2010 - https://gqg.com/highchartal-paper-large-tech-capex-spend-as-...
this is obviously related to the advent of public cloud computing more than anything. why this chart appears to clash with the author's chart is the author's chart specifically calls out just percentage of GDP growth, not overall GDP. so the natural conclusion is that while tech has been in borderline recessionary conditions since 2022, it is now becoming stable (if not recovering) while the rest of the economy that didn't have the post-covid pullback (nor the same boom during covid, of course) is now having issues largely due to geopolitics and global trade.
is there an AI bubble? who cares. it's not as meaningful to the broader economy as these cherrypicking stats imply. if it's a bubble, it represents maybe .3% of the GDP. no one would be screaming from the mountain tops about a shaky economy and a bubble if that same .3% was represented by a bubble in the restaurant industry or manufacturing. in fact, in recent years, those industries DID have inflationary bubbles and it was treated like a positive thing for the most part.
I think a lot of this overanalysis and prodding for flaws in tech is generally an attempt at schadenfreude hoping that tech becomes just another industry like carpentry or plumbing. in particular, hoping for a scenario where tech is not as culturally impactful as it is today. because people are worried and frustrated about the economy, don't understand the value of tech, and hope it stops sucking up so much funding and focus by society in general.
they're not 100% wrong in being untrusting or skeptical of tech. the tech industry hasn't always been the best steward of the wealth and power it possesses. but they are generally wrong about valuations or impact of tech on the economy. like the people spending all this money are clueless. the stock market fell 900 points on friday, wiping out over $1 trillion in value over the course of a couple hours. yet the hundreds of billions invested in datacenters is a sign of impending economic doom.
is the economy good? I don't think it's doing great. but it has little to do with AI one way or another. "AI" is just another trend of making technology more accessible to the masses. no more scarier, complicated, or impactful than microcomputers, DSL, cellular phones, or youtube. and while the economy crashed in 2008, youtube and facebook did well. yet there was none of this dooming about tech specifically at the time simply because the tech industry wasn't as controversial at the time.
There's a lot of people who can only process their own failures by assuming that everyone and everything must also, eventually fail; that anything successful is temporary and "not real". And there's a lot of down people in the tech industry right now; we're in a recession, after all.
There's also a significant number of people (e.g. Doctorow) who have made their entire brand on doomerism; and whether they actually believe what they say or have just become addicted to the views is an irrelevant implementation detail.
The anti-AI slop that dominates HackerNews doesn't serve anything productive or interesting. Its just an excuse for people to not read the article, go straight to the comments, and parrot the same thing they've parroted twenty times.
Ah, so I see we've entered the "normalizing the end of presidental term limits" part of the downward spiral. Maybe I need to accelerate my plans to get the fuck out of here.
We're already past the point where there is no meaningful notion of "normal" that actually impacts what happens in government. Normalizing things doesn't matter that much if people care so little that they elect someone who's done what Trump did his first time.
I mean he's selling the hats and I've seen some talking heads on the news say they'll look at ways for him to do it. The two term limit is a kinda recent precedent all things considered, so...
Are there any bookies for that? Seems like an easy way to get rich betting against that happening. If not, then I would instead wager the "market sentiment" is that Trump isn't actually serious about a 2028 bid or that he won't actually be able to overcome 22A.
boomers have already agreed multiple times this century that businesses are not allowed to go bankrupt in fear that their retirement portfolios may not be juiced to the gills. So instead we bail everyone out on the taxpayers dime and leave the debt for some poor schmuck in the future to figure out.
It (was) also settled precedent that he can't stop spending money required to be spent by Congress (settled during Nixon's term), but the supremes decided it's different now. Same for firing heads of supposed independent federal departments, which was supposed to prevent presidential manipulation.
And the s.c. created presidential immunity out of nothing. For now the president has unchecked power, the conservative dream of a unitary executive.
This will all end when a Democrat is in power again. This is not a sarcastic exaggeration, one way they teed this up was shadow docket decisions like the Kavanaugh rule (ice can arrest/kidnap you based on appearance), it's not a precedent as shadow docket so they can reverse it any time.
In the normative sense of "another atrocity like this cannot occur", then yes.
However your comment instead sounds like you are dismissing it as a non-concern... in which case I suggest you wake the heck up. We've had months now of seeing President and his cabinet actively and willfully breaking federal and Constitutional law, with the entire Republican legislature complicit.
It wouldn't even the first time states tried to remove him from their ballots either. [0]
The fact that this is even plausibly true means that the non-AI (and maybe even non-tech) American economy has been stagnating for years by now.
The fundamentals behind the 2008 financial crisis didn't come from nowhere and the "solution" to 2008 did little more than kick the can down the road.
The tariff wars certainly didn't help.
depends, on which side, of the tarrifs an economy happens to be and where, geopoliticaly.
AI, or whatever a mountain of processors churning all of the worlds data will be called later, still has no use case, other than total domination, for which it has brought a kind of lame service to all of the totaly dependent go along to get along types, but nothing approaching an actual guaranteed answer for anything usefull and profitable, lame, lame, infinite fucking lame tedious shit that has prompted most people to.stop.even trying, and so a huge vast amount of genuine human inspiration and effort is gone
The thing about tariffs is you’re guaranteed to be on both sides because the other side retaliates.
Farmers get screwed twice because our tariffs increase the costs of their inputs and the retaliation reduces the value of outputs.
If I was a farmer I’d be tearing my hair out about now.
Pretty sure the stagnation has a cause beginning in 2025 and that has to do with things like: Canada refusing to buy ALL American liquor in retaliation. China refusing to buy ANY soy beans in retaliation. In retaliation for what you might ask? I leave that as an exercise for the reader. If you are unable to answer that question honestly to yourself you need to seriously consider that your cognitive bias might be preventing you from thinking clearly.
Anecdotally, our company's next couple quarters are projected to be a bloodbath. Spending is down everywhere, nearly all of our customers are pushing for huge cuts to their contracts, and in turn literally any costs we can jettison to keep jobs is being pushed through. We're hearing the same from our customers.
AI has been the only new investment our company has made (half hearted at that). I definitely get the sense that everyone pretending things are fine to investors, meanwhile they are playing musical chairs.
Back in my economics classes at college, a professor pointed out that a stock market can go up for two reasons: On one hand, the economy is legitimately growing and shares are becoming more valuable. But on the other hand, people and corporations could be cutting spending en masse so there's extra cash to flood the stock markets and drive up prices regardless of future earnings.
> Back in my economics classes at college, a professor pointed out that a stock market can go up for two reasons
Reason #1 is lower interest rates, which increase the present value of future cash flows in DCF models. A professor who does not mention that does not know what they are talking about.
At the end of the day, if you look at almost any government, roughly 2/3 of expenses go towards healthcare and education things which, AI worlkflow are very likely continue offsetting a larger and larger percentage of the costs on.
Can we still have a financial crisis from all this investment going bust because it might take too long for it to make a difference in manufacturing enough automation hardware for everyone? Yes.
But, the fundamentals are still there, parents will still send their kids to some type of school, and people will trade good in exchange for health services. That's not going to change. Neither will the need to use robots in nursing homes, I think that assumption is safe to make.
What's difficult to predict change in is adoption in manufacturing, and repairs ( be that repairing bridges or repairing your espresso machine ) because that is more of a "3D" issue and hard to automate reliably (think about how many gpus today would it actually take to get a robot to reason out and repair a whole in your drywall), given that your RL environments and training data needs grow exponentially. Technically, your phone should have enough gpu performance to do your taxes with a 3B model and a bunch of tools, eventually it'll even be better than you at it. But to tun an actual robot with multiple cameras and stuff doing troubleshooting and decision making.... you're gonna need a whole 8x rack of gpus for that.
And that's what makes it now difficult to predict what's going to happen. The areas under the curve can vary widely. We could get a 1B AGI model in 6 months, or it could take 5 years for agentic workflows to fully automate everyones taxes and actually replace 2/3 of radiology work...
Either way, while theres a significant chance of this transition to the automation age being rough, I am overall quite optimistic given the fundamentals of what governments actually spend majority of their money on.
For the vast majority of US taxpayers, automating their taxes is feasible right now and the obstacles are political not technical.
The fundamentals are not there.
Talk to an educator. Education is being actively harmed by AI. Kids don’t want to do any difficult thinking work so they aren’t learning. (Literally any teacher you talk to will confirm this)
AI in medicine is challenging because AI is bad at systems thinking, citation of fact and data privacy. Three things that are absolutely essential for medicine. Also everything for healthcare needs regulatory approval so costs go up and flexibility goes down. We’re ten years away from any AI for medicine being cost effective.
Having an AI do your taxes is absurd. They regularly hallucinate. I 100% guarantee that if you do your taxes with AI you won’t pass an audit. AI literally can’t count. You’re be better off asking it to vibecode a replacement for TurboTax. But again the product won’t be AI it will be traditional code.
Trying for AGI down the road of an LLM is insanity sauce. It’s a simulated language center that can’t count, it can’t do systems thinking. It can’t cite known facts. We’re not six months away we’re a decade or a “cost effective fusion” distance (defined as perpetually 20 years in the future from any point in time)
There are at least six Silicon Valley startups working on AGI. Not a single one of them has published an architecture strategy that might work. None of the “almost AGI” products that have ever come out have a path to AGI.
Meh is the most likely outcome. I say this as someone who uses it a lot for things it is good at.
I will repeat my comment from 70 days ago:
> I was discussing with a friend that my biggest concern with AI right now is not that it isn't capable of doing things... but that we switched from research/academic mode to full value extraction so fast that we are way out over our skis in terms of what is being promised, which, in the realm of exciting new field of academic research is pretty low-stakes all things considered... to being terrifying when we bet policy and economics on it.
That isn't overly prescient or anything... it feels like the alarm bells started a while ago... but wow the absolute "all in" of the bet is really starting to feel like there is no backup. With the cessation of EVs tax credits, the slowdown in infra spending, healthcare subsidies, etc, the portfolio of investment feels much less diverse...
Especially compared to China, which has bets in so many verticals, battery tech, EVs, solar, then of course all the AI/chips/fabs. That isn't to say I don't think there are huge risks for China... but geez does it feel like the setup for a big shift in economic power especially with change in US foreign policy.
I'll offer two counter-points. Weak but worth mentioning. wrt China there's no value to extract by on-shoring manufacturing -- many verticals are simply uninvestable in the US because of labor costs and the gap of cost to manufacture is so large it's not even worth considering. I think there's a level of introspection the US needs to contend with, but that ship has sailed. We should be forward looking in what we can do outside of manufacturing.
For AI, the pivot to profitability was indeed quick, but I don't think it's as bad as you may think. We're building the software infrastructure to accomodate LLMs into our work streams which makes everyone more efficient and productive. As foundational models progress, the infrastructure will reap the benefits a-la moore's law.
I acknowledge that this is a bullish thesis but I'll tell you why I'm bullish: I'm basically a high-tech ludite -- the last piece of technology I adopted was google in 1996. I converted from vim to vscode + copilot (and now cursor.) because of LLMs -- that's how transformative this technology is.
Another thing to note about China: while people love pointing to their public transit as an example of a country that's done so much right, their (over)investment in this domain has led to a concerning explosion of local government debt obligations which isn't usually well-represented in their overall debt to GDP ratios many people quote. I only state that to state that things are not all the propaganda suggests it might be in China. The big question everyone is asking is, what happens after Xi. Even the most educated experts on the matter do not have an answer.
I, too, don't understand the OP's point of quickly pivoting to value extraction. Every technology we've ever invented was immediately followed by capitalists asking "how can I use this to make more money". LLMs are an extremely valuable technology. I'm not going to sit here and pretend that anyone can correctly guess exactly how much we should be investing into this right now in order to properly price how much value they'll be generating in five years. Except, its so critical to point out that the "data center capex" numbers everyone keeps quoting are, in a very real (and, sure, potentially scary) sense, quadruple-counting the same hundred-billion dollars. We're not actually spending $400B on new data centers; Oracle is spending $nnB on Nvidia, who is spending $nnB to invest in OpenAI, who is spending $nnB to invest in AMD, who Coreweave will also be spending $nnB with, who Nvidia has an $nnB investment in... and so forth. There's a ton of duplicate-accounting going on when people report these numbers.
It doesn't grab the same headlines, but I'm very strongly of the opinion that there will be more market corrections in the next 24 months, overall stock market growth will be pretty flat, and by the end of 2027 people will still be opining on whether OpenAI's $400B annual revenue justifies a trillion dollars in capex on new graphics cards. There's no catastrophic bubble burst. AGI is still only a few years away. But AI eats the world none-the-less.
[1] https://www.sciencedirect.com/science/article/abs/pii/S09275...
My point is not that value extraction wouldn't happen, my point is simply that in addition to the value extraction we also made other huge shifts in economic policy that taken together really seem to put us on a path towards an "AGI or bust" situation in the future.
Is that a bit hyperbolic? isn't this just the same as dotcom and housing bubbles before where we pivoted a bit too hard into a specific industry? maybe... but I also am not sure it would be wise to assume past results will indicate future returns with this one.
> but geez does it feel like the setup for a big shift in economic power
It happened ten years ago, it's just that perceptions haven't changed yet.
> In those intervening years, a bunch of AI companies might be unable to pay back their debts.
Dumb question: isn't a lot of the current investment in the form of equity deals and/or funded by existing tech company profit lines? What do we actually know about the debt levels and schedules of the various actors?
Slightly?
Boy, you're on for a MAJOR dissapointment.
Reminder: If you're going to feel doomer about how tech capex represents like nn% of US GDP growth, you should do some research into what percentage of US GDP growth, especially since 2020, has been the result of government printing. Arguably, our GDP growth right now is more "real" than the historical GDP growth numbers between 2020-2023, but all of it is so warped by policy that its hard to tell what's going on.
We're in extremely unprecedented times. Sometimes maybe good, sometimes maybe shit. The old rules don't apply. Etc.
> And yet despite those warning signs, there has been nothing even remotely resembling an economic crash yet.
Well... define "economic crash."
The outputs no longer correlate with the inputs. Is it possible it's "crashed" already? And is now running in a faulty state?
This is how I'm starting to view many of these things. It's just that the metrics we use to evaluate the economy are getting out of sync. For instance, if "consumer sentiment is at Great Recession levels", why do we need some other indicator to accept that there's a problem? Isn't that a bad thing on its own?
"Bad" is a judgment call. Trump approval ratings haven't dipped that far, so Congressional Republicans won't dare abandon him and there's not much political will for change.
It might change if we get into millions of foreclosures like the great recession and the pain really hits home. From what I can tell right now they're in wartime mode where they just need to buckle down until Trump wins and makes other countries pay for tariffs or something.
We're definitely not in a crash yet, but it does feel like we're the roller coaster just tipping over the peak: unemployment is rising for the first time in a couple years, there's basically no GDP growth apart from AI investment, and the yield curves look scary. The crash could be any second now, especially because tech earnings week is coming up and that could indicate how much revenue, or lack thereof, the AI investment is bringing in.
So the crash is only official once Wall Street's exuberance matches the economy as perceived by it's workforce? Is that a crash or just a latent arrival of the signal itself?
Even in the unlikely event AI somehow delivers on its valuations and thereby doesn't disappoint, the implied negative externalities on the population (mass worker redundancy, inequality that makes even our current scenario look rosy, skyrocketing electricity costs) means that America's and the world's future looks like a rocky road.
I personally hope AI doesn't quite deliver on its valuations, so we don't lose tons of jobs, but instead of a market crash, the money will rotate into quantum and crispr technologies (both soon to be trillion dollar+ industries). People who bet big on AI might lose out some but not be wiped out. That's best casing it though.
Yes, if AI proves to be a 10x productivity booster, it probably means most people will be unemployed
Electricity was a 10x productivity boost, just over a way longer timespan. We‘re just speedrunning this.
Also, what happens to those employed when they each have 10 people trying to take their job. It’s a downward spiral for employment as we know it.
"skyrocketing electricity costs"
You said it right here. No one is going to give up energy at such a cheap rate anymore. Those days are over. Darkness for the US is coming.
This is hard-paywalled.
Huh, got in fine on my phone, which has the weaker paywall workaround.
Read to the point where it says subscribe to see the rest.
The thing that's become synonymous with "hallucination" and "slop"? Cool, good outlook for us.
Just repeating all the same links that are already being discussed around here for weeks.
How the AI Bubble Will Pop
https://news.ycombinator.com/item?id=45448199
America is now one big bet on AI
https://news.ycombinator.com/item?id=45502706
Jeff Bezos says AI is in a bubble but society will get 'gigantic' benefits
https://news.ycombinator.com/item?id=45464429
etc
etc
separate from this article, I don't have a very high opinion of the author. he has an astonishing record of being uninformed and/or just plain wrong in everything I've ever heard him write about.
but as far as this article, the "tech capex as a percentage of GDP growth" is an incredible cherrypicking of statistics to create a narrative... when tech became a boodbath starting in 2022, the rest of the economy continued on strong. all the way until 2025, the rest of the economy was booming while tech layoffs and budget cuts after covid were exploding. so starting that chart in early 2023 when tech had bottomed out (compared to the rest of the economy) is misleading. tech capex as a percentage of the overall GDP has been consistently rising since 2010 - https://gqg.com/highchartal-paper-large-tech-capex-spend-as-... this is obviously related to the advent of public cloud computing more than anything. why this chart appears to clash with the author's chart is the author's chart specifically calls out just percentage of GDP growth, not overall GDP. so the natural conclusion is that while tech has been in borderline recessionary conditions since 2022, it is now becoming stable (if not recovering) while the rest of the economy that didn't have the post-covid pullback (nor the same boom during covid, of course) is now having issues largely due to geopolitics and global trade.
is there an AI bubble? who cares. it's not as meaningful to the broader economy as these cherrypicking stats imply. if it's a bubble, it represents maybe .3% of the GDP. no one would be screaming from the mountain tops about a shaky economy and a bubble if that same .3% was represented by a bubble in the restaurant industry or manufacturing. in fact, in recent years, those industries DID have inflationary bubbles and it was treated like a positive thing for the most part.
I think a lot of this overanalysis and prodding for flaws in tech is generally an attempt at schadenfreude hoping that tech becomes just another industry like carpentry or plumbing. in particular, hoping for a scenario where tech is not as culturally impactful as it is today. because people are worried and frustrated about the economy, don't understand the value of tech, and hope it stops sucking up so much funding and focus by society in general.
they're not 100% wrong in being untrusting or skeptical of tech. the tech industry hasn't always been the best steward of the wealth and power it possesses. but they are generally wrong about valuations or impact of tech on the economy. like the people spending all this money are clueless. the stock market fell 900 points on friday, wiping out over $1 trillion in value over the course of a couple hours. yet the hundreds of billions invested in datacenters is a sign of impending economic doom.
is the economy good? I don't think it's doing great. but it has little to do with AI one way or another. "AI" is just another trend of making technology more accessible to the masses. no more scarier, complicated, or impactful than microcomputers, DSL, cellular phones, or youtube. and while the economy crashed in 2008, youtube and facebook did well. yet there was none of this dooming about tech specifically at the time simply because the tech industry wasn't as controversial at the time.
There's a lot of people who can only process their own failures by assuming that everyone and everything must also, eventually fail; that anything successful is temporary and "not real". And there's a lot of down people in the tech industry right now; we're in a recession, after all.
There's also a significant number of people (e.g. Doctorow) who have made their entire brand on doomerism; and whether they actually believe what they say or have just become addicted to the views is an irrelevant implementation detail.
The anti-AI slop that dominates HackerNews doesn't serve anything productive or interesting. Its just an excuse for people to not read the article, go straight to the comments, and parrot the same thing they've parroted twenty times.
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> which cuts down on the risk of a trump 2028 run
Ah, so I see we've entered the "normalizing the end of presidental term limits" part of the downward spiral. Maybe I need to accelerate my plans to get the fuck out of here.
We're already past the point where there is no meaningful notion of "normal" that actually impacts what happens in government. Normalizing things doesn't matter that much if people care so little that they elect someone who's done what Trump did his first time.
I mean he's selling the hats and I've seen some talking heads on the news say they'll look at ways for him to do it. The two term limit is a kinda recent precedent all things considered, so...
I'm not sure I'd consider the 22nd amendment "kinda recent precedent."
I'm not sure how recent 1947 is? Kids would say it's 100 years ago, although the math obviously doesn't quite check out, we're getting there.
Although I'd say precedent goes back to George Washington refusing a 3rd term.
Are there any bookies for that? Seems like an easy way to get rich betting against that happening. If not, then I would instead wager the "market sentiment" is that Trump isn't actually serious about a 2028 bid or that he won't actually be able to overcome 22A.
Looks like there's about 1M in volume on Polymarket, so you could definitely dump a good bit of money there if you feel strongly:
https://polymarket.com/event/presidential-election-winner-20...
That's winner - any for "will he be on at least one state ballot?"
Trump doesn't have a very good ROI though... if I put $10k into a Trump "no" I'd only make $373 (or ~3.7%) ROI which is worse than CDs currently
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In any other decade, I'd scoff at the idea that widespread economic problems would be a net-benefit in averting something worse for the country.
... I miss those years.
boomers have already agreed multiple times this century that businesses are not allowed to go bankrupt in fear that their retirement portfolios may not be juiced to the gills. So instead we bail everyone out on the taxpayers dime and leave the debt for some poor schmuck in the future to figure out.
Trump cannot run again.
It (was) also settled precedent that he can't stop spending money required to be spent by Congress (settled during Nixon's term), but the supremes decided it's different now. Same for firing heads of supposed independent federal departments, which was supposed to prevent presidential manipulation.
And the s.c. created presidential immunity out of nothing. For now the president has unchecked power, the conservative dream of a unitary executive.
This will all end when a Democrat is in power again. This is not a sarcastic exaggeration, one way they teed this up was shadow docket decisions like the Kavanaugh rule (ice can arrest/kidnap you based on appearance), it's not a precedent as shadow docket so they can reverse it any time.
He can if SCOTUS says he can
Yet.
Trump can do whatever nobody will stop him from doing. Who's going to stop him from running again?
In the normative sense of "another atrocity like this cannot occur", then yes.
However your comment instead sounds like you are dismissing it as a non-concern... in which case I suggest you wake the heck up. We've had months now of seeing President and his cabinet actively and willfully breaking federal and Constitutional law, with the entire Republican legislature complicit.
It wouldn't even the first time states tried to remove him from their ballots either. [0]
[0] https://www.scotusblog.com/2024/03/supreme-court-rules-state...