And it’s not even working. Not one of the AI companies is profitable. So they’re putting the hope for profits some time in the future over sanity and safety.
Steve Burke (of GN) described the absurdity pretty well, within the context of the currently uncertain Nvidia and OpenAI deal:
Nvidia offered OpenAI $100B in investment, money that it didn’t have, as long as OpenAI gave that money back to Nvidia to lease GPUs that haven’t been made, to then put in data centres that haven’t been constructed, which will be powered by electricity that hasn’t come online, to then rent to users who haven’t subscribed, to provide them features that haven’t come to fruition.
So what’s the problem? This looks self-correcting to me, if none of the AI companies are profitable then they’re going to go away. Short their stock and make a fortune.
The problem is the cost of that correction is going to fall on us. Or did we forget that the flavor of capitalism we live under is the “Privatize the profits, socialize the losses” kind. We’re not the ones in the casino, but we’re the ones who will lose our shirts when they lose.
“What’s the problem” with the entire American economy being moored to a bunch of companies all acting as flaky as Enron and friends during the dot-com crash?
Edit: just realized FaceDeer is obsessed with AI stuff, so he’s probably here just to troll with questions he already knows the answers to.
It’s only self correcting if the powers that be are losing money, which they aren’t because they are either liquidating important assets to pad their pockets or just using economic magic to make trillions appear out of no where. They’ll only feel it when their company or the economy collapses, and at that point they make off with their ill gotten gains
I’m not sure how this benefits the big corporations then. Surely they don’t have a deathwish? And aren’t stupid/incompetent enough to not see that? Else they’d not have gotten this big, right?
In the mean time they’re soaking up all the RAM, SSD and silicon processing which makes basically everything with any of those cost a lot more (like the RAM I bought for $99, 4 yrs ago thats now $560). Not to mention the power requirements and costs being passed on to the consumers that don’t want it anyway.
They’re also screwing up the environment in ways it won’t recover from.
Which is pouring money into the manufacturers of those things. If you’re convinced the AI companies are going to collapse then just wait a little and you’ll get all those things way cheaper than they were before.
At the moment, most of that “money” is just stock in the other company. And the type of RAM and “GPU”'s being manufactured are not ones that normal consumers will use. They’re very specialized for AI en masse.
Another thing around that is that the major manufacturers being leveraged for that gear have stated that they are not increasing production in the near future because of this. It seems they’re mostly in a “wait and see, it might just be a bubble” mode as scale up takes a lot of time and only pays off with continued demand over a long period of time.
I’d love if it was going to be flooding the market with cheaper tech, but thats not been shown to be the case. And it’s really not worth the environmental impact in either case.
And the type of RAM and “GPU”'s being manufactured are not ones that normal consumers will use.
They’re using the same foundries that would make those things. I’m not saying that there’ll be a flood of “used” equipment (though there would indeed be some of that too, other companies could set up data centers much more cheaply), I’m saying that the foundries will switch back to consumer products.
The stock is worth a lot because it can be sold for a lot. If the manufacturers don’t think the AI companies will stick around they should be selling the stock they’re receiving from them. It’s money either way. What do you think they’re doing with that money?
And it’s not even working. Not one of the AI companies is profitable. So they’re putting the hope for profits some time in the future over sanity and safety.
Steve Burke (of GN) described the absurdity pretty well, within the context of the currently uncertain Nvidia and OpenAI deal:
And hope you’ve propped up the economy enough by the end of it that the government has to
bail you out…sorry i meant provide a “backstop”.What about all the user data they sell to third parties? I’d be interested in knowing how that contributes to this
So what’s the problem? This looks self-correcting to me, if none of the AI companies are profitable then they’re going to go away. Short their stock and make a fortune.
The problem is the cost of that correction is going to fall on us. Or did we forget that the flavor of capitalism we live under is the “Privatize the profits, socialize the losses” kind. We’re not the ones in the casino, but we’re the ones who will lose our shirts when they lose.
Shorting isn’t just a bet that a stock will fail but also when
Then invest in competitors, they’ve got a more flexible timeframe.
Imagine your entire life is viewed through the lens of actions you can take in the stock market. What a sad life.
The original comment that this subthread descends from was about the profitability of AI companies.
“What’s the problem” with the entire American economy being moored to a bunch of companies all acting as flaky as Enron and friends during the dot-com crash?
Edit: just realized FaceDeer is obsessed with AI stuff, so he’s probably here just to troll with questions he already knows the answers to.
It’s only self correcting if the powers that be are losing money, which they aren’t because they are either liquidating important assets to pad their pockets or just using economic magic to make trillions appear out of no where. They’ll only feel it when their company or the economy collapses, and at that point they make off with their ill gotten gains
Where’s this infinite well of investment money coming from? “Economic magic” is pretty vague.
Have you not heard of inflation? It is literally the creation of new monies that the government gives to banks to give loans.
They’ll just declare bankruptcy and get away scott-free
That’s not how bankruptcy works. The investors don’t get their money back.
thanks for pointing that out.
I’m not sure how this benefits the big corporations then. Surely they don’t have a deathwish? And aren’t stupid/incompetent enough to not see that? Else they’d not have gotten this big, right?
In the mean time they’re soaking up all the RAM, SSD and silicon processing which makes basically everything with any of those cost a lot more (like the RAM I bought for $99, 4 yrs ago thats now $560). Not to mention the power requirements and costs being passed on to the consumers that don’t want it anyway.
They’re also screwing up the environment in ways it won’t recover from.
Which is pouring money into the manufacturers of those things. If you’re convinced the AI companies are going to collapse then just wait a little and you’ll get all those things way cheaper than they were before.
At the moment, most of that “money” is just stock in the other company. And the type of RAM and “GPU”'s being manufactured are not ones that normal consumers will use. They’re very specialized for AI en masse.
Another thing around that is that the major manufacturers being leveraged for that gear have stated that they are not increasing production in the near future because of this. It seems they’re mostly in a “wait and see, it might just be a bubble” mode as scale up takes a lot of time and only pays off with continued demand over a long period of time.
I’d love if it was going to be flooding the market with cheaper tech, but thats not been shown to be the case. And it’s really not worth the environmental impact in either case.
They’re using the same foundries that would make those things. I’m not saying that there’ll be a flood of “used” equipment (though there would indeed be some of that too, other companies could set up data centers much more cheaply), I’m saying that the foundries will switch back to consumer products.
The stock is worth a lot because it can be sold for a lot. If the manufacturers don’t think the AI companies will stick around they should be selling the stock they’re receiving from them. It’s money either way. What do you think they’re doing with that money?