Where does all this leave us? For one, you better hope and pray that AI delivers a magical transformation, because if it doesn't, the whole economy will collapse into brutal serfdom. When I say magic here, I mean it; because of the ~38T national debt bomb, a big boost is not enough. If AI doesn't completely transform our economy, the massive capital misallocation combined with the national debt is going to cause our economy to implode.
My summary: it's too big big to fail so let's transfer the risk on the taxpayer and if it fails anyway, let them eat cake. And by the way, that cake is a lie !
The "~38T national debt bomb" is not caused by AI and not that large compared to debts other countries have dealt with. It's about 100% of gdp and Japan is about 250%. The UK was about 270% after WW2 and that got paid down to 50% before running up a bit.
Not ideal but doesn't have to make anything implode.
No, the largest cause of the ~38T national debt bomb is Trump. His first term: $8 trillion. His second term: $4 trillion so far, and we're not even at 25%.
What can we even imagine that would be so transformative? Cold fusion? Wagyu synthesis from GMO yeast? Healthcare nanobots?
Whatever it invents needs costumers who haven't been driven into poverty already.
If we could replace the human serfs with robots, we're not even socially configured to yield the benefits. Seems like revolution or dystopian surveillance state are the only realistic options.
Except that’s not at all how the economy works. The government will simply double or triple the debt again and the economy will continue to grow in size as the nominal value of currency goes down giving the illusion that prices are going up.
Literally the exact same thing that’s been happening since Andrew Jackson was president. There’s no magical collection agency that will force people to start plowing the fields to pay taxes. There’s no magical resource that we will run out of the government will just pay people to build infrastructure that will prop up businesses run by idiotic MBAs like it’s always been.
We already live in a Plutonomy. Already 50% of sales in USA is by the top 10%. The top 1% make most of their money selling to the top 10%. The Elites don't need us for consumption to make money. Walmart is reconfiguring their sales model to carry more "luxury” items. And now with AI the Wealthy wont need human labor hardly at all. We are surplus to requirements.
The sad thing is it doesn't have to be like this. AI could be used to reduce peoples working hours and give them more leisure hours.
IMO, the backdrop to all of this is global warming. We're seeing so many warning signs and growth stagnating that governments need something, ANYTHING, to prop up their debt fueled economies and keep the music playing. In the face of impending GDP/population contraction due to global warming and the upcoming breadbasket collapses, GenAI isn't going to do shit for us. All of the money and effort being spent on it is money that could be spent on figuring out how to give our kids a glimmer of hope.
It's the American Way(tm)! We've been this way for a long time. Just look at the glut of holiday decorations made of plastic that will be bought, then end up in landfills in a few months. We have literally fought wars, killed millions, just for control of the oil from which they're made.
I think this is mostly about the US, right? Most countries haven't invested all that much in AI. Even if all this new AI would completely vanish overnight, I'm pretty sure most of the world wouldn't care one bit. Of course many AI companies and investors would be bankrupt; they'd be the real losers here. Many other companies and organisations would have wasted a lot of money on nothing, but they'll write it off and move on. If it bankrupts Microsoft, that would have a tremendous impact on many companies using Microsoft products of course (maybe MS should hurry up with that EU-US cloud split, so the EU branch would survive the crash).
Well, last few times the US had a big recession, they took down the whole world with them. The biggest recession led almost directly to WWII, and that was before the US centralized that much power or money.
They are all correlated- even if the countries are different, it's the same set of investors. But if you have to pick one... Finland? Switzerland, Sweden and Norway have low debt / gdp.
It's what E-Trade lists for dividend yield or SEC yield. I have no idea if it's before or after exchange to USD. The total return is from totalrealreturns.com, it accounts for USD inflation and includes yield (at least I think), but probably didn't include the Oct 10 drop itself.
That's true. But thanks to Trump's tariffs, much of the world is working to make itself less dependent on the US. There's talk that the Euro could become the new reserve currency. Maybe the Renmibi.
It's quite possible that the American Century will end with a massive crash, and outside of the US, Europe will probably suffer quite a bit of damage too if we don't detach ourselves more from the US, but I still think most of the world will be fine. Though I will admit that could be partially wishful thinking.
I'd say the problem is that the fiat currency keeps inflating and thus decreasing in value day-by-day, while AI does not bring that much productivity gain compared to last few decades.
Internet boom does substantially decrease communication cost and bring more people together, making much more liquidity. AI, meanwhile, is not only not flawless (and sometimes fatal, see some horror stories of LLM here in HN doing an oopsie deleting production database and do nothing about recovery), but also a costy beast that only corporations or rich individuals could own, in other words, most people can "download" the "means of production", but not totally use and own it.
And the biggest problem for AI, still, that compared to Internet, is that AI does not make you that much gain in productivity. Back when we are in the office we use pen and paper, now we use Word or LibreOffice depending on where you are, and PC is therefore a must. Now I don't think AI is going to be a must, and they are still shoveling NPU that would end up being a waste in silicon space, if not vaporware.
What I really find really weird here is that when I buy stock in Apple, I do so because I think Apple will create new value.
But with AI the hope is that the value created will be proportional to wages being removed.
I.e. if AI creates more value, it means that the large majority of people will actually have less money, bar a few lucky ones. You have to remember that AI is being touted as the final solution to basically do all your administrative work for you, and all your software engineering.
So if it fails we all lose a lot of money because the stock market will drastically go down.
But I don't think humanity overall will be better off if it succeeds.
> with AI the hope is that the value created will be proportional to wages being removed […] if AI creates more value, it means that the large majority of people will actually have less money, bar a few lucky ones
That’s one (not unreasonable) prediction of AI automation. Another is that it will empower the same people whose tasks are made redundant to create value somewhere else. In a way they have to, or they will perish. The sum of all value created does not have a fixed upper bound.
> All of these copilots are supposed to make work more efficient with fewer people, but my business leaders are also saying they can't reduce head count yet.
It's not AI that is losing trust, it's the US. It was always the US, the "West". They may invent fusion reactors tomorrow, if they can shut access to my assets on a whim, take direct hostile actions against their allies / my home, or I see they are at a brink of a deep societal chasm / civil war, if I see another economy outpacing them in industrial output, I will just not put my money there.
I really feel like a leaf being blown over reading this stuff while planning on getting a Mortgage. Well, at least I have a rented roof over my head and eat every day. A lot of people can't afford that right now.
I think that the sentence is "Those who don't learn from history are condemned to send everyone else to the bread lines while they retire on their private luxury islands."
Is that true? I was under the impression that one reason NVIDIA is so entrenched is that their GPUs are highly flexible. Versus the ASIC offerings of other specialized players are more focused on transformers remaining the dominant architecture.
You can't invest in me currently (except by retaining me as a consultant/architect), and if I was in a position to be invested in, the article would have had a different structure. My position is integrity first, you can stalk my LinkedIn to see that if you need proof -- I've never worked in adtech or other predatory industries, most of my work has been in the interest of public good and the protection of democracy.
If it wasn't for AI investments, it's likely the United States would be in a recession right now.
So the biggest achievement of this amazing new technology is to artificially prop up Wall Street?
For those who can read the tea leaves --- it's absolutely a bubble --- a financial bubble.
The real reason why China is ahead in many areas is because their leadership is a little more technologically savvy and progressive than ours.
If this really is a pre-war economy, we have invested heavily in unproven tech which in my opinion is a risky move that leaves the US highly vulnerable.
If this is a pre-war economy, the US is screwed not because of AI but because we started a stupid trade war that's going to cut us off of our supply of dysprosium which is critical for defense manufacturing.
The US would only be screwed in that type of scenario if they allowed themselves to be. If things really got to that point they would just take over the deposits.
The idea from the Chinese side to prevent a war by limiting the ability of the US to produce weapons.
The USA and it's allies won WWII mainly due to superior production capacity. This advantage now works in China's favor. And the USA no longer has allies.
Bottom line: If China decides to take Taiwan, the USA will have to choose between either doing nothing or mutual annihilation.
I'm skeptical too however I think AI can add value by increasing knowledge worker productivity. Maybe save some money by needing less staff for some tasks. Maybe to mine vast amounts of data looking for a pattern. So I think it is useful however my skepticism is about the cost vs reward. Is it really worth the amount of money pumped into it, not sure. Time will tell.
This talk of arms race with China is very, very dangerous. We need to start having a more important conversation if people really believe this because, otherwise, why shouldn't China just kinetically strike US infrastructure and vice versa?
If AI is an executioner's blow to your opponent by enabling you to dominate them in terms of hacking, economy, government, politics, etc. kinetic strikes are more than justified. You could destroy most of the US's ability to create AI for decades with Pearl Harbor-esque first strikes.
Do people think countries are just going to roll over and die?
I don't even understand what people think we're racing towards.
What the global masses want are good food, nice houses, fast transportation, TVs and cell phones... Physical comforts.
It doesn't matter what a superintelligence dreams up if you can't physically produce any of it. As the article says, China is the only place that actually has the manufacturing and robotics capability.
In the US we maybe have a hope of seeing more miracle healthcare, marginally more optimized industrial agriculture, and I guess even more lethal military technology. At best it can design all the factories and energy plants we are missing.
And putting all the white collar knowledge workers out of work- what would that accomplish? People aren't ready for the massive social reorganization that this tech would imply. Would it even survive the revolution it causes??
I still have the hope that the AI bubble will leave as a side effect a massive build-out of energy infrastructure: Nuclear, Solar and Natural Gas.
In my book, prosperity and progress is measured in Terajoules. If you have free, clean and abundant energy, you have industry, jobs, every fucking thing a healthy economy should want or need to have.
And on the other side, I think the Chinese are deluding themselves on robotics.
China (or rather the CCP) have their hands are tied by 3 opposing forces
1. Birthrates
2. Revolt
3. Economic collapse
For example, if they try to increase the birthrate by liberalising the economy, reducing social control measures (e.g. hukou), etc. it will give the people the tools to rise up. But it would potentially fix the economy long term.
On the other hand, if they try to crack down on freedom to ensure their own power and economic survival - it will collapse the birthrate even further and/or cause revolt.
Lastly, if they do nothing the economy will collapse under the weight of the one child policy.
Robots would be the perfect solution - birthrates can collapse, they can maintain economic control - and their "workforce" will never decrease. It's of course a pipe-dream.
This line of thinking is of course similar to how the US requires the forever growth of the services economy which drives the need/hope for AI to solve that problem.
China's birthrate has fallen like it has in other richer countries because people have become rich and the amount of time and money needed to raise a kid is expensive. Becoming even richer won't help things at all.
Freedom has little to do with the birthrate, you could even say a crackdown on liberalization that has occurred would make china poorer and therefore the birthrate would go up.
China just wants to be rich, robots are one way to do that with the demographics that happen in rich economies.
I think you've made a few common misconceptions about China and hopefully you'll let me clarify my argument by addressing them. But you are also right they are seeing a collapse in the birth-rates due to modernisation, the difference is that the Chinese economy is geared towards production, and not services - which is far less able to withstand population collapse (meaning these problems compound much more). So comparing them directly to the way western economies are trending is not always helpful. And it can be equally valid to compare their issues (cultural, political, economic) to other countries such as Japan, Korea, and the Phillipines (particularly for the male:female ratio issue).
> Becoming even richer won't help things at all.
There's 2 reasons this isn't the case:
1. The trend you're describing is more of a function of education levels, not wealth. Educations levels have an impact in 2 ways, making people aware there are other options (career, travel, wealth) and by making them aware of when they cannot afford children. Meaning an increase in wealth will increase the ability to afford children.
2. And you're assuming the average Chinese citizen earns as much (in PPP terms) as a western citizen. They don't (except in terms of manufactured goods) - it regularly requires multiple family members (parents, uncles/auths & grandparents) to contribute towards a property, and food is comparatively expensive. At least in the west this is still somewhat doable as a nuclear family. Meaning an increase in wealth (better distribution of the economy) will result in the ability to feed and house more children.
> China's birthrate has fallen like it has in other richer countries
You've missed the part where they implemented a multi-decade one-child policy. The dominoes are already set up for the largest population collapse we have ever seen in the next few decades.
> Freedom has little to do with the birthrate
I wasn't clear, sorry, this is the most complicated link in the chain - I mean economic, cultural, and political freedoms. Currently the Chinese are suffocating under all 3.
Economic freedom would increase birthrates by giving people money and time to meet others. 996+ work culture, living in factories, lack of holidays, and living with parents all hinder the baby making process. It would also make it easier for them to transition to a services economy so it's trends can be stabilised / less tied to raw population numbers.
Cultural freedom, culturally Chinese children must support their parents in old age - this has a lot of the younger generation tied up caring for (and funding) multiple people at once. This would include the parents (at a 2:1 ratio due to the 1 child policy) and potentially other members of the family (e.g. grandparents, or those who didn't have children). (Also not to forget the extremely skewed gender ratio which in of itself is a "cultural" problem which should be addressed)
The other cultural freedom issue would be immigration, but it has other issues (as the west is finding out) so lets not touch on that.
Political freedom would mean the freedom to change all the others, which is currently not possible because the government is interested in maintaining the status quo - both culturally (not to cause revolt) and economically (to maintain current production levels, i.e. 996+).
Look up the lying-flat movement, many people's reasoning for doing so lines up with one of these 3 pillars.
> make china poorer and therefore the birthrate would go up
Don't forget, many of the people who will become poor are currently college educated (and already under employed). The only stronger indicator for birthrates other than poverty is the education of women. Educated people know when they're too poor to support a family, and when there are other options to having children. If they get poorer, they're more likely to have less kids, not more.
China modern culture is incredibly materialistic and status oriented. Women in China have extremely high requirements for a candidate mate in the money department, and paradoxically is a highly sexist society, which led to people aborting their female babies during the one-child policy era to ensure their only son would be a man. Because of that, China has a surplus of males in reproductive age, for a proportional lower stock of fertile age females compared to the population.
On the other hand, having kids outside marriage is frowned upon.
Frankly, there's no way out of an aged population followed by a drastic population reduction for China.
If anything, I would say the communist party is focusing on humanoid robots to meet the coming explosion in demand for aged care.
Robots are seen as a way to keep the economy going after a demographic implosion happens. I wouldn't call China a highly sexist society (at least outside of the countryside), far from it, just that women have high standards for mates and would rather be alone than marry wrong. And their families/society is letting them do that so isn't that a good thing? Even if they get married, they are going for either a DINK lifestyle or at most one kid, because that's what they have time for.
The idea that the Republicans are going to bail out AI and pay for it with massive tax raises on the plebs is just utter bonkers, if for no other reason than they're currently utterly incapable of getting any legislation passed, let alone one so deeply unpopular as that.
The BBB, i.e., the bill passed via the special mechanism that only works once a year and has stringent requirements on what can be in the bill for the mechanism to work.
It's a pleasant surprise that the Senate did respect its own purely parlimentary and nonbinding mechanism [0]. But I'm not sure what point you're making -- the bill did pass, as I suspect would just about any other bill the President wants to pass.
Eh, I was just discussing this article on LinkedIn.
Even one wasn't _that_ cynical about AI, but yeah, this is clearly one possible reading of the events. I'm in no hurry to live in the future that it entails, though.
So maybe we are talking too much about AI as a tech bubble (like the dotcom bubble) and it is actually closer to an arms race like the nuclear programs or space race? For better and for worse there are a lot of secondary value and ventures created from those and one could see AI ventures in a similar light.
A key difference is of course, at least in the US, that the research is led by corporations as opposed to research institutes and government.
> Demand that the titans of tech change, and if they don't, stop feeding them your dollars.
Haha okay. Have you met people? Have you seen what they’re using it for? The users of LLMs do not care if they have to pay some
of their wages to avoid working and learning. Even if it means they will no longer receives wages (or even close to the same wages) in the long term.
I prefer to view people through a positive lens. I believe we are capable of living up to our lofty goals, and we should encourage each other to do that.
Yeah but there’s a limit to positivity when it comes to the reality. The reality is that people will support OpenAI and sell out the rest of humanity for short term gains. LLMs are just the latest vehicle to do that, it’s nothing new.
I think a lot of HNers are too close to the topic for the right perspective.
LLMs are as much of a feature of an existing technology as computers are features of electricity. ML and neural networks have been around for a long time and the transition to LLM usage for us feels like "yup, another feature, just a really good auto-complete".
For most users of LLMs, this is a magical feature that answers any questions and saves so much time and effort. I would even dare say that LLMs are a bigger leap in technology than the internet itself was. The internet connected people, "AI" made it so that we need less of each other!
What was the cause of the enlightenment and renaissance period in europe that led to a boom in science, technology and the industrial revolution which is responsible for computers to begin with? It was the discovery of the new world and the expansion of europe into asia and africa. Get gold and pearls from the new world and sell use it to buy things in the near and far east. This meant people can spend time studying science, but it also meant military R&D. Better ships, better guns,better cannons. You need better science for that. Not just for colonization but the competition between european powers.
What's my point? AI/LLMs, are a leap in that people can now do a lot less things they don't want to do. Even if it means social instability. There is a very active arms-race in military capability, disinformation, control of markets and influence of governments going on as we speak. and this in turn is going to result in better and better improvements in every sector.
The internet meant we had to learn new things, move to more efficient work. LLMs meant without learning as much we tell the computer to do things and all it needs is guidance and some correction.
We all see the fads and the hype all over. But there are very real and very dramatic advantages and values to be extracted from LLMs, which in the long run would be the equivalent of the industrial revolution.
The pessimism feels a lot like people were being pessimistic about the internet back in the 90s.
AI isn't just too big to fail, it isn't something that can fail. Can long distance communication "fail" , can electronic computing fail? can transportation on wheels fail?
All the grifters slapping AI on everything will fail, but the AI tech and all the value and change that comes with it, isn't something worth even consider as having a potential for failure.
That kinda misses the point for me. I use LLMs a lot and have become an invaluable part of my work (coding, collecting data, proof-reading text) and even personal time (amazing Japanese menu translator!).
But I still think they can "fail" in the sense that current investments need an absurd amount of profits in order to have a positive NPV. Data centers depreciate fast, so if you just did $500bn in capex, you better make sure you will get $50bn/yr out of it from the get go or you will fail.
And that's the problem; even if sales are high, all vendors are bleeding money and so far the offerings are commoditized enough that I can't see how they will recoup their investment.
So long as there is a reasonable earning potential, or actually a reasonable expectation that the market will expect a decent earning potential the capital will be there.
Unlike crypto (which has yet to fail as a category, just dips), the elephants taking up the tens of billions in investments aren't purely speculative pyramid schemes.
Internet was too big to fail in 2000, and in the long run was a net positive for the economy. Yet, a lot of internet companies still have not recovered the bubble bursting
> Think of it like WWII, only only instead of planting victory gardens to beat the Nazis, we're building AI apps and finding ways to create the economic value needed to cover the reckless bets being made by the elites.
LOL fuck this, the stock market deserves to burn to the ground.
While there are a lot of problems with the current market dynamics, burning it to the ground would cause a ridiculous amount of suffering. We need to spin up a new alternative then wind down the market gently.
I'm anti-establishment because the establishment doesn't care about anyone but themselves. What are we doing all this work for? Progress would be getting universal healthcare for all in this country. Getting better work life balance. Being able to afford a home. Now it's just all the "haves" fighting bitterly to keep getting more and more until they have everything and nothing for anyone else.
That's one negative quality that Hacker News always had to me, compared to older hacker spaces such as newsgroups and Slashdot: The Petit bourgeois conformism and materialism. People always drunk the Venture Capital pseudo-libertarian cool-aid with too much enthusiasm here.
Being anti-establishment should not be viewed as a sin, unless in extreme cases.
I have noticed that it coincides with the re-election of a certain political candidate (He who must not be named).
The facade of "critical and rational thinker" has all but completely fallen away and this place has revealed itself for the true ideological echo chamber that it is.
The only problem is that the stock market is tied to a bunch of retirement/pension and other accounts. Yes stock market should burn to the ground but also I think pensioners and retirees shouldn’t be put out, just the finance bros and private equity folks which money is just a plaything.
This is pretty myopic, or something. Shows, at least, a real ignorance about the available possibilities (or lack thereof)—at scale—to the common worker for “saving for a later day”.
But I’m all ears. Now that you’ve diagnosed how 401K investing fools get what they deserve, care to offer any alternative solutions as to the entire work force should have been saving towards retirement.
(kinda unrelated but) I personally hate these forced savings schemes from the government. At least in my country the rates are low so it almost feels like I'm donating the entire difference in rates between the pension scheme and the S&P500 + taxes straight to the government.
At least give those of us brave (or stupid) enough to do something different with the money the option to.
I guess. My company (and I believe most) highly incentivize it by offering matching funds. The company says, "want to save $1000 of your paycheck? We'll throw in $500". The general wisdom is, you'd be an idiot to leave money like that going unreclaimed.
Where I am there's actually a %-age of your salary/wage that's "returned" to you when you retire. You don't get a choice.
You can choose to contribute to an employer-match scheme (I do) or even fund your own pension account with monthly payments to a pension provider. But these are in addition to the above forced pension.
Pension funds should be diversified and have a mix of asset classes that includes more than the stock market. Ideally, most of these assets will move independently so if one is doing particularly badly the others can balance it out to reduce overall volatility. If your pension fund is too heavily weighted to the market, that's a management problem with your fund.
I'm honored that you would attribute my words to Jan :)
Honestly you don't have to believe me, I'm trying to make some things clear to drive change but if you don't want to take a critical look at the world around you and try to push for things to get better, that's your call.
The "~38T national debt bomb" is not caused by AI and not that large compared to debts other countries have dealt with. It's about 100% of gdp and Japan is about 250%. The UK was about 270% after WW2 and that got paid down to 50% before running up a bit.
Not ideal but doesn't have to make anything implode.
No, the largest cause of the ~38T national debt bomb is Trump. His first term: $8 trillion. His second term: $4 trillion so far, and we're not even at 25%.
that's been going on for decades, rinse and repeat
What can we even imagine that would be so transformative? Cold fusion? Wagyu synthesis from GMO yeast? Healthcare nanobots?
Whatever it invents needs costumers who haven't been driven into poverty already.
If we could replace the human serfs with robots, we're not even socially configured to yield the benefits. Seems like revolution or dystopian surveillance state are the only realistic options.
Except that’s not at all how the economy works. The government will simply double or triple the debt again and the economy will continue to grow in size as the nominal value of currency goes down giving the illusion that prices are going up.
Literally the exact same thing that’s been happening since Andrew Jackson was president. There’s no magical collection agency that will force people to start plowing the fields to pay taxes. There’s no magical resource that we will run out of the government will just pay people to build infrastructure that will prop up businesses run by idiotic MBAs like it’s always been.
We already live in a Plutonomy. Already 50% of sales in USA is by the top 10%. The top 1% make most of their money selling to the top 10%. The Elites don't need us for consumption to make money. Walmart is reconfiguring their sales model to carry more "luxury” items. And now with AI the Wealthy wont need human labor hardly at all. We are surplus to requirements.
The sad thing is it doesn't have to be like this. AI could be used to reduce peoples working hours and give them more leisure hours.
IMO, the backdrop to all of this is global warming. We're seeing so many warning signs and growth stagnating that governments need something, ANYTHING, to prop up their debt fueled economies and keep the music playing. In the face of impending GDP/population contraction due to global warming and the upcoming breadbasket collapses, GenAI isn't going to do shit for us. All of the money and effort being spent on it is money that could be spent on figuring out how to give our kids a glimmer of hope.
Yep, but instead of that we're wasting land, energy and resources in data centers that run "you are not the father" memes based on Sora 2.
It's the American Way(tm)! We've been this way for a long time. Just look at the glut of holiday decorations made of plastic that will be bought, then end up in landfills in a few months. We have literally fought wars, killed millions, just for control of the oil from which they're made.
You're having kids while admitting they don't have a glimmer of hope? Ouch.
I think this is mostly about the US, right? Most countries haven't invested all that much in AI. Even if all this new AI would completely vanish overnight, I'm pretty sure most of the world wouldn't care one bit. Of course many AI companies and investors would be bankrupt; they'd be the real losers here. Many other companies and organisations would have wasted a lot of money on nothing, but they'll write it off and move on. If it bankrupts Microsoft, that would have a tremendous impact on many companies using Microsoft products of course (maybe MS should hurry up with that EU-US cloud split, so the EU branch would survive the crash).
But on the whole, I'm not too worried.
Well, last few times the US had a big recession, they took down the whole world with them. The biggest recession led almost directly to WWII, and that was before the US centralized that much power or money.
I don't live in the US, but I'm rather worried.
On the Oct 10 drop, I made a list of a bunch country specific ETFs to see who is and who isn't so correlated with the US.
(Edit: here are a few more) They are all correlated- even if the countries are different, it's the same set of investors. But if you have to pick one... Finland? Switzerland, Sweden and Norway have low debt / gdp.Quick q what does "yield" mean here?
Also, in which currency are these returns? Because forex shifts (which for sure happened on oct10) mess up the observed returns quite a bit
It's what E-Trade lists for dividend yield or SEC yield. I have no idea if it's before or after exchange to USD. The total return is from totalrealreturns.com, it accounts for USD inflation and includes yield (at least I think), but probably didn't include the Oct 10 drop itself.
Very nice!
Interesting that Chile and Brazil went further down than S&P, but I guess it's noisy.
That's true. But thanks to Trump's tariffs, much of the world is working to make itself less dependent on the US. There's talk that the Euro could become the new reserve currency. Maybe the Renmibi.
It's quite possible that the American Century will end with a massive crash, and outside of the US, Europe will probably suffer quite a bit of damage too if we don't detach ourselves more from the US, but I still think most of the world will be fine. Though I will admit that could be partially wishful thinking.
I'd say the problem is that the fiat currency keeps inflating and thus decreasing in value day-by-day, while AI does not bring that much productivity gain compared to last few decades.
Internet boom does substantially decrease communication cost and bring more people together, making much more liquidity. AI, meanwhile, is not only not flawless (and sometimes fatal, see some horror stories of LLM here in HN doing an oopsie deleting production database and do nothing about recovery), but also a costy beast that only corporations or rich individuals could own, in other words, most people can "download" the "means of production", but not totally use and own it.
And the biggest problem for AI, still, that compared to Internet, is that AI does not make you that much gain in productivity. Back when we are in the office we use pen and paper, now we use Word or LibreOffice depending on where you are, and PC is therefore a must. Now I don't think AI is going to be a must, and they are still shoveling NPU that would end up being a waste in silicon space, if not vaporware.
What I really find really weird here is that when I buy stock in Apple, I do so because I think Apple will create new value.
But with AI the hope is that the value created will be proportional to wages being removed.
I.e. if AI creates more value, it means that the large majority of people will actually have less money, bar a few lucky ones. You have to remember that AI is being touted as the final solution to basically do all your administrative work for you, and all your software engineering.
So if it fails we all lose a lot of money because the stock market will drastically go down.
But I don't think humanity overall will be better off if it succeeds.
UBI never "mathed" to me. It always smelled like a pseudo solution to distract the soon-to-be-replaced long enough until they are replaced.
Well, wealth redistribution makes sense. But the idea that it would be voluntary does not.
Especially since we're going to have AI soldier robots before AI farmer robots.
> with AI the hope is that the value created will be proportional to wages being removed […] if AI creates more value, it means that the large majority of people will actually have less money, bar a few lucky ones
That’s one (not unreasonable) prediction of AI automation. Another is that it will empower the same people whose tasks are made redundant to create value somewhere else. In a way they have to, or they will perish. The sum of all value created does not have a fixed upper bound.
Weirdly enough I have the feeling here that companies don't want to do make more money with the same (retrained) people.
They want to make more money with less people: https://www.theregister.com/2025/10/09/mckinsey_ai_monetizat...
> All of these copilots are supposed to make work more efficient with fewer people, but my business leaders are also saying they can't reduce head count yet.
It's not AI that is losing trust, it's the US. It was always the US, the "West". They may invent fusion reactors tomorrow, if they can shut access to my assets on a whim, take direct hostile actions against their allies / my home, or I see they are at a brink of a deep societal chasm / civil war, if I see another economy outpacing them in industrial output, I will just not put my money there.
I really feel like a leaf being blown over reading this stuff while planning on getting a Mortgage. Well, at least I have a rented roof over my head and eat every day. A lot of people can't afford that right now.
Those who don't learn from... whatever, these clowns have it coming
I think that the sentence is "Those who don't learn from history are condemned to send everyone else to the bread lines while they retire on their private luxury islands."
Or maybe that's exactly what they learned from history.
Maybe we should learn from some revolutionary history, then.
"... but those who do learn from history are doomed to watch everyone else repeat it."
>~75–80% of S&P 500 gains
Dot com bust was 50% of S&P / 80% on Nasdaq... we survived it..
For Nvidia: all it will take is for one smart grad student to find a better training algorithm to destroy 75% of their value.
Why I think a better algorithm is out there:
Total installed GPU Tflops = 4 billion. Tflops of human brain = 1 million
Computation on human brain is on a totally different substrate than silicon. It's in memory and highly error prone.
It's questionable a mere algorithm would get us there without a fundamental change in computer architecture. (in terms of Intelligence / W)
> For Nvidia: all it will take is for one smart grad student to find a better training algorithm to destroy 75% of their value.
I don't think so. We've already seen several generations of better training algorithms, but they all rely on CUDA, hence on NVidia.
For inference they already face competition: that deal OpenAI announced with AMD .. at a certain point it will be worth broadening away from CUDA.
Possibly, yes, but so far, it's barely noticeable, hardly a threat.
Is that true? I was under the impression that one reason NVIDIA is so entrenched is that their GPUs are highly flexible. Versus the ASIC offerings of other specialized players are more focused on transformers remaining the dominant architecture.
Maybe the better algorithm will be able to run on GPUs.
But the flip side is excess capacity will be used for other fields which are not getting a chance.
On the other hand, GPUs die down fairly quickly, so this excess capacity had better prove useful rather quickly.
the 1 million is debatable, but you can't argue with the power consumption of 20W.
that said, if all the current infrastructure could run brain-equivalent models at 20W each, I'd wager we would have much more demand than currently.
There's speed, efficiency, and determinism. Pick 2
I agree. In fact, the current investor elite won't let AI fail, they will continue pumping money despite losses for years if needed.
AI isn't going anywhere. It won't magically disappear, but that businesses are trying to use AI in situations that are unsustainable and unneeded.
> AI is Too Big to Fail
Now invest in my Ai company, 100mil at 10bn valuation, can't fail, too big.
You can't invest in me currently (except by retaining me as a consultant/architect), and if I was in a position to be invested in, the article would have had a different structure. My position is integrity first, you can stalk my LinkedIn to see that if you need proof -- I've never worked in adtech or other predatory industries, most of my work has been in the interest of public good and the protection of democracy.
The table of contents on the right blocks a good chunk of text. Safari on MacOS Sequoia
Thanks for the note, I'll look into how I can make it flow better with the document.
Also on Firefox. But making my screen narrower made that menu collapse.
If it wasn't for AI investments, it's likely the United States would be in a recession right now.
So the biggest achievement of this amazing new technology is to artificially prop up Wall Street?
For those who can read the tea leaves --- it's absolutely a bubble --- a financial bubble.
The real reason why China is ahead in many areas is because their leadership is a little more technologically savvy and progressive than ours.
If this really is a pre-war economy, we have invested heavily in unproven tech which in my opinion is a risky move that leaves the US highly vulnerable.
If this is a pre-war economy, the US is screwed not because of AI but because we started a stupid trade war that's going to cut us off of our supply of dysprosium which is critical for defense manufacturing.
We're doubly screwed because we dismantled most of our industrial base and everyone is scrambling to produce basic goods domestically
The US would only be screwed in that type of scenario if they allowed themselves to be. If things really got to that point they would just take over the deposits.
hah hah, yeah, the U.S is going to take the dysprosium from China by force. With Hegseth and Trump in charge no less!!
Wouldn't the US be cut from the supply if there was a war, regardless of the current tariffs?
The idea from the Chinese side to prevent a war by limiting the ability of the US to produce weapons.
The USA and it's allies won WWII mainly due to superior production capacity. This advantage now works in China's favor. And the USA no longer has allies.
Bottom line: If China decides to take Taiwan, the USA will have to choose between either doing nothing or mutual annihilation.
I'm skeptical too however I think AI can add value by increasing knowledge worker productivity. Maybe save some money by needing less staff for some tasks. Maybe to mine vast amounts of data looking for a pattern. So I think it is useful however my skepticism is about the cost vs reward. Is it really worth the amount of money pumped into it, not sure. Time will tell.
This talk of arms race with China is very, very dangerous. We need to start having a more important conversation if people really believe this because, otherwise, why shouldn't China just kinetically strike US infrastructure and vice versa?
If AI is an executioner's blow to your opponent by enabling you to dominate them in terms of hacking, economy, government, politics, etc. kinetic strikes are more than justified. You could destroy most of the US's ability to create AI for decades with Pearl Harbor-esque first strikes.
Do people think countries are just going to roll over and die?
I don't even understand what people think we're racing towards.
What the global masses want are good food, nice houses, fast transportation, TVs and cell phones... Physical comforts.
It doesn't matter what a superintelligence dreams up if you can't physically produce any of it. As the article says, China is the only place that actually has the manufacturing and robotics capability.
In the US we maybe have a hope of seeing more miracle healthcare, marginally more optimized industrial agriculture, and I guess even more lethal military technology. At best it can design all the factories and energy plants we are missing.
And putting all the white collar knowledge workers out of work- what would that accomplish? People aren't ready for the massive social reorganization that this tech would imply. Would it even survive the revolution it causes??
I still have the hope that the AI bubble will leave as a side effect a massive build-out of energy infrastructure: Nuclear, Solar and Natural Gas.
In my book, prosperity and progress is measured in Terajoules. If you have free, clean and abundant energy, you have industry, jobs, every fucking thing a healthy economy should want or need to have.
And on the other side, I think the Chinese are deluding themselves on robotics.
China (or rather the CCP) have their hands are tied by 3 opposing forces 1. Birthrates 2. Revolt 3. Economic collapse
For example, if they try to increase the birthrate by liberalising the economy, reducing social control measures (e.g. hukou), etc. it will give the people the tools to rise up. But it would potentially fix the economy long term.
On the other hand, if they try to crack down on freedom to ensure their own power and economic survival - it will collapse the birthrate even further and/or cause revolt.
Lastly, if they do nothing the economy will collapse under the weight of the one child policy.
Robots would be the perfect solution - birthrates can collapse, they can maintain economic control - and their "workforce" will never decrease. It's of course a pipe-dream.
This line of thinking is of course similar to how the US requires the forever growth of the services economy which drives the need/hope for AI to solve that problem.
This is a really bad analysis:
China's birthrate has fallen like it has in other richer countries because people have become rich and the amount of time and money needed to raise a kid is expensive. Becoming even richer won't help things at all.
Freedom has little to do with the birthrate, you could even say a crackdown on liberalization that has occurred would make china poorer and therefore the birthrate would go up.
China just wants to be rich, robots are one way to do that with the demographics that happen in rich economies.
I think you've made a few common misconceptions about China and hopefully you'll let me clarify my argument by addressing them. But you are also right they are seeing a collapse in the birth-rates due to modernisation, the difference is that the Chinese economy is geared towards production, and not services - which is far less able to withstand population collapse (meaning these problems compound much more). So comparing them directly to the way western economies are trending is not always helpful. And it can be equally valid to compare their issues (cultural, political, economic) to other countries such as Japan, Korea, and the Phillipines (particularly for the male:female ratio issue).
> Becoming even richer won't help things at all.
There's 2 reasons this isn't the case:
1. The trend you're describing is more of a function of education levels, not wealth. Educations levels have an impact in 2 ways, making people aware there are other options (career, travel, wealth) and by making them aware of when they cannot afford children. Meaning an increase in wealth will increase the ability to afford children.
2. And you're assuming the average Chinese citizen earns as much (in PPP terms) as a western citizen. They don't (except in terms of manufactured goods) - it regularly requires multiple family members (parents, uncles/auths & grandparents) to contribute towards a property, and food is comparatively expensive. At least in the west this is still somewhat doable as a nuclear family. Meaning an increase in wealth (better distribution of the economy) will result in the ability to feed and house more children.
> China's birthrate has fallen like it has in other richer countries
You've missed the part where they implemented a multi-decade one-child policy. The dominoes are already set up for the largest population collapse we have ever seen in the next few decades.
> Freedom has little to do with the birthrate
I wasn't clear, sorry, this is the most complicated link in the chain - I mean economic, cultural, and political freedoms. Currently the Chinese are suffocating under all 3.
Economic freedom would increase birthrates by giving people money and time to meet others. 996+ work culture, living in factories, lack of holidays, and living with parents all hinder the baby making process. It would also make it easier for them to transition to a services economy so it's trends can be stabilised / less tied to raw population numbers.
Cultural freedom, culturally Chinese children must support their parents in old age - this has a lot of the younger generation tied up caring for (and funding) multiple people at once. This would include the parents (at a 2:1 ratio due to the 1 child policy) and potentially other members of the family (e.g. grandparents, or those who didn't have children). (Also not to forget the extremely skewed gender ratio which in of itself is a "cultural" problem which should be addressed)
The other cultural freedom issue would be immigration, but it has other issues (as the west is finding out) so lets not touch on that.
Political freedom would mean the freedom to change all the others, which is currently not possible because the government is interested in maintaining the status quo - both culturally (not to cause revolt) and economically (to maintain current production levels, i.e. 996+).
Look up the lying-flat movement, many people's reasoning for doing so lines up with one of these 3 pillars.
> make china poorer and therefore the birthrate would go up
Don't forget, many of the people who will become poor are currently college educated (and already under employed). The only stronger indicator for birthrates other than poverty is the education of women. Educated people know when they're too poor to support a family, and when there are other options to having children. If they get poorer, they're more likely to have less kids, not more.
China modern culture is incredibly materialistic and status oriented. Women in China have extremely high requirements for a candidate mate in the money department, and paradoxically is a highly sexist society, which led to people aborting their female babies during the one-child policy era to ensure their only son would be a man. Because of that, China has a surplus of males in reproductive age, for a proportional lower stock of fertile age females compared to the population.
On the other hand, having kids outside marriage is frowned upon.
Frankly, there's no way out of an aged population followed by a drastic population reduction for China.
If anything, I would say the communist party is focusing on humanoid robots to meet the coming explosion in demand for aged care.
Robots are seen as a way to keep the economy going after a demographic implosion happens. I wouldn't call China a highly sexist society (at least outside of the countryside), far from it, just that women have high standards for mates and would rather be alone than marry wrong. And their families/society is letting them do that so isn't that a good thing? Even if they get married, they are going for either a DINK lifestyle or at most one kid, because that's what they have time for.
Imagine robots doing chemistry or biology experiments 24x7. There is so much potential. We don't need grad students to waste their precious time.
A lot of lab work that could be automated have already been.
Twice the pride, double the fall.
The idea that the Republicans are going to bail out AI and pay for it with massive tax raises on the plebs is just utter bonkers, if for no other reason than they're currently utterly incapable of getting any legislation passed, let alone one so deeply unpopular as that.
Their government is currently closed, but that BBB thing passed... So, I have no idea.
What? Did you miss the BBB? They’ll pass any legislation they’re told to.
The BBB, i.e., the bill passed via the special mechanism that only works once a year and has stringent requirements on what can be in the bill for the mechanism to work.
It's a pleasant surprise that the Senate did respect its own purely parlimentary and nonbinding mechanism [0]. But I'm not sure what point you're making -- the bill did pass, as I suspect would just about any other bill the President wants to pass.
[0] https://epicforamerica.org/federal-budget/understanding-the-...
Eh, I was just discussing this article on LinkedIn.
Even one wasn't _that_ cynical about AI, but yeah, this is clearly one possible reading of the events. I'm in no hurry to live in the future that it entails, though.
So maybe we are talking too much about AI as a tech bubble (like the dotcom bubble) and it is actually closer to an arms race like the nuclear programs or space race? For better and for worse there are a lot of secondary value and ventures created from those and one could see AI ventures in a similar light.
A key difference is of course, at least in the US, that the research is led by corporations as opposed to research institutes and government.
> Demand that the titans of tech change, and if they don't, stop feeding them your dollars.
Haha okay. Have you met people? Have you seen what they’re using it for? The users of LLMs do not care if they have to pay some of their wages to avoid working and learning. Even if it means they will no longer receives wages (or even close to the same wages) in the long term.
I prefer to view people through a positive lens. I believe we are capable of living up to our lofty goals, and we should encourage each other to do that.
Yeah but there’s a limit to positivity when it comes to the reality. The reality is that people will support OpenAI and sell out the rest of humanity for short term gains. LLMs are just the latest vehicle to do that, it’s nothing new.
I think a lot of HNers are too close to the topic for the right perspective.
LLMs are as much of a feature of an existing technology as computers are features of electricity. ML and neural networks have been around for a long time and the transition to LLM usage for us feels like "yup, another feature, just a really good auto-complete".
For most users of LLMs, this is a magical feature that answers any questions and saves so much time and effort. I would even dare say that LLMs are a bigger leap in technology than the internet itself was. The internet connected people, "AI" made it so that we need less of each other!
What was the cause of the enlightenment and renaissance period in europe that led to a boom in science, technology and the industrial revolution which is responsible for computers to begin with? It was the discovery of the new world and the expansion of europe into asia and africa. Get gold and pearls from the new world and sell use it to buy things in the near and far east. This meant people can spend time studying science, but it also meant military R&D. Better ships, better guns,better cannons. You need better science for that. Not just for colonization but the competition between european powers.
What's my point? AI/LLMs, are a leap in that people can now do a lot less things they don't want to do. Even if it means social instability. There is a very active arms-race in military capability, disinformation, control of markets and influence of governments going on as we speak. and this in turn is going to result in better and better improvements in every sector.
The internet meant we had to learn new things, move to more efficient work. LLMs meant without learning as much we tell the computer to do things and all it needs is guidance and some correction.
We all see the fads and the hype all over. But there are very real and very dramatic advantages and values to be extracted from LLMs, which in the long run would be the equivalent of the industrial revolution.
The pessimism feels a lot like people were being pessimistic about the internet back in the 90s.
AI isn't just too big to fail, it isn't something that can fail. Can long distance communication "fail" , can electronic computing fail? can transportation on wheels fail?
All the grifters slapping AI on everything will fail, but the AI tech and all the value and change that comes with it, isn't something worth even consider as having a potential for failure.
(sorry for the long post)
That kinda misses the point for me. I use LLMs a lot and have become an invaluable part of my work (coding, collecting data, proof-reading text) and even personal time (amazing Japanese menu translator!).
But I still think they can "fail" in the sense that current investments need an absurd amount of profits in order to have a positive NPV. Data centers depreciate fast, so if you just did $500bn in capex, you better make sure you will get $50bn/yr out of it from the get go or you will fail.
And that's the problem; even if sales are high, all vendors are bleeding money and so far the offerings are commoditized enough that I can't see how they will recoup their investment.
So long as there is a reasonable earning potential, or actually a reasonable expectation that the market will expect a decent earning potential the capital will be there.
Unlike crypto (which has yet to fail as a category, just dips), the elephants taking up the tens of billions in investments aren't purely speculative pyramid schemes.
Internet was too big to fail in 2000, and in the long run was a net positive for the economy. Yet, a lot of internet companies still have not recovered the bubble bursting
Just because one bubble also brought better infrastructure for everybody, doesn't mean that every bubble has a silver lining.
I wish AI wasn't so easily compared with the Internet just because they have exuberant investors in common.
> Think of it like WWII, only only instead of planting victory gardens to beat the Nazis, we're building AI apps and finding ways to create the economic value needed to cover the reckless bets being made by the elites.
LOL fuck this, the stock market deserves to burn to the ground.
While there are a lot of problems with the current market dynamics, burning it to the ground would cause a ridiculous amount of suffering. We need to spin up a new alternative then wind down the market gently.
When did the HackerNews comment section turn into this? Low quality, aggressive, fervently anti-establishment.
I'm anti-establishment because the establishment doesn't care about anyone but themselves. What are we doing all this work for? Progress would be getting universal healthcare for all in this country. Getting better work life balance. Being able to afford a home. Now it's just all the "haves" fighting bitterly to keep getting more and more until they have everything and nothing for anyone else.
That's one negative quality that Hacker News always had to me, compared to older hacker spaces such as newsgroups and Slashdot: The Petit bourgeois conformism and materialism. People always drunk the Venture Capital pseudo-libertarian cool-aid with too much enthusiasm here.
Being anti-establishment should not be viewed as a sin, unless in extreme cases.
100%. I work in tech and frequent this sub daily but it is morally and politically neutered to a fault. It is the enlightened centrist utopia.
Anti-establishment is sort of a requirement for doing a start-up.
Aggressiveness is a requirement for doing a start-up in times of constrained capitalism
Low quality is driven the by the availability of capital for dumb ideas.
So... a while now?
These startups backed by venture funds are anti-establishment? Are you joking?
This is a core tenet of Startupist religious dogma. People really believe it.
That is deeply cringe.
Part of being deep in the establishment is that you have to proclaim you're anti-establiahment.
It's like the perfect pop song - "I kissed a girl" by Katy Perry.
Do I think she's kissed a girl? No, no I don't.
People like to think that they are anti-establishment and disruptive at a startup. They conveniently ignore who is writing the cheques.
Some of us just want to see the (AI) world burn.
Have you looked at the establishment recently?
I agree. HN basically became Reddit.
This comment of yours contributes nothing and is exactly the level one would expect of Reddit. If you want better, start by doing better yourself.
I have noticed that it coincides with the re-election of a certain political candidate (He who must not be named).
The facade of "critical and rational thinker" has all but completely fallen away and this place has revealed itself for the true ideological echo chamber that it is.
won't somebody think of the establishment
The only problem is that the stock market is tied to a bunch of retirement/pension and other accounts. Yes stock market should burn to the ground but also I think pensioners and retirees shouldn’t be put out, just the finance bros and private equity folks which money is just a plaything.
Pensioners and retirees willingly dumping money into index funds without oversight are the dumb money that enables all of this.
So yes, they deserve a haircut.
Or perhaps we shouldn't have killed off the concept of pensions in the United States so we weren't all beholden to godforsaken 401Ks?
To be fair, the pensions also exploded in a lot of cases.
We really just need a more centralized and reliable method of holding money for retirement. Which we have, but we need to expand - SS.
Of course, lots of people think SS will explode, too. But it hasn't! Yet!
This is pretty myopic, or something. Shows, at least, a real ignorance about the available possibilities (or lack thereof)—at scale—to the common worker for “saving for a later day”.
But I’m all ears. Now that you’ve diagnosed how 401K investing fools get what they deserve, care to offer any alternative solutions as to the entire work force should have been saving towards retirement.
(kinda unrelated but) I personally hate these forced savings schemes from the government. At least in my country the rates are low so it almost feels like I'm donating the entire difference in rates between the pension scheme and the S&P500 + taxes straight to the government.
At least give those of us brave (or stupid) enough to do something different with the money the option to.
401k is voluntary
I guess. My company (and I believe most) highly incentivize it by offering matching funds. The company says, "want to save $1000 of your paycheck? We'll throw in $500". The general wisdom is, you'd be an idiot to leave money like that going unreclaimed.
Where I am there's actually a %-age of your salary/wage that's "returned" to you when you retire. You don't get a choice.
You can choose to contribute to an employer-match scheme (I do) or even fund your own pension account with monthly payments to a pension provider. But these are in addition to the above forced pension.
Pensioners don’t have a choice where their stuff goes. A teacher or something simply doesn’t deserve that kind of hardship.
Pension funds should be diversified and have a mix of asset classes that includes more than the stock market. Ideally, most of these assets will move independently so if one is doing particularly badly the others can balance it out to reduce overall volatility. If your pension fund is too heavily weighted to the market, that's a management problem with your fund.
Deserve is a strong word.
We're talking about regular folks who want to do nothing else but secure their future in the face of a market that regularly tries to screw it up.
Can you explain why you suggest "deserve"?
> The government is practically manufacturing a ponzi scheme and the losers will be anyone who doesn't own stock
*anyone American who doesn't own stock
[dead]
[flagged]
I'm honored that you would attribute my words to Jan :)
Honestly you don't have to believe me, I'm trying to make some things clear to drive change but if you don't want to take a critical look at the world around you and try to push for things to get better, that's your call.
[flagged]