I have been trying to make sense of all AI Capex announcements for a while and I don’t get it. So please help me out if you know the answer.
US Investment in 2024 ~$400b, 2025 ~$500b, 2026 ~600. Global investment 2026 1.5~$2.2t. Let’s say $2t US Investment by end of 2026. Investment will continue into the future but let’s assume that is not the case. Also that GPU will be obsolete in 5y. So, they have 60m to recoup $2t +ROI ~10%. So about $40b a month, US has a labor force of 170m. Thus, AI industry needs the equivalent of ~$240 per month per each employee. I don’t see myself or my employer paying this for AI any time soon.
They don’t care about making profit by selling a product or a service, it’s all a speculative bet. They think if they “simply” make AGI they will win all the economy forever, and that there is no second place.
I think Ray Dalio’s take on it is correct. It’s a consequence of currency devaluation, as people in general vote against the decrease in spending necessary to deflate the asset bubble. (1)
I have been trying to make sense of all AI Capex announcements for a while and I don’t get it. So please help me out if you know the answer.
US Investment in 2024 ~$400b, 2025 ~$500b, 2026 ~600. Global investment 2026 1.5~$2.2t. Let’s say $2t US Investment by end of 2026. Investment will continue into the future but let’s assume that is not the case. Also that GPU will be obsolete in 5y. So, they have 60m to recoup $2t +ROI ~10%. So about $40b a month, US has a labor force of 170m. Thus, AI industry needs the equivalent of ~$240 per month per each employee. I don’t see myself or my employer paying this for AI any time soon.
They don’t care about making profit by selling a product or a service, it’s all a speculative bet. They think if they “simply” make AGI they will win all the economy forever, and that there is no second place.
I dont think the bubble will pop but I also dont think there will ever be agi from this.
This is primitive tech and cant do agi. We would need something completely different than language models.
I think Ray Dalio’s take on it is correct. It’s a consequence of currency devaluation, as people in general vote against the decrease in spending necessary to deflate the asset bubble. (1)