This is the trade-off to connectivity and removing frictional barriers (i.e., globalism). This is the economic equivalent of what Nick Land and Spandrell called the "IQ shredder". Spandrell said of Singapore:
Singapore is an IQ shredder. It is an economically productive metropolis that
sucks in bright and productive minds with opportunities and amusements at the
cost of having a demographically unsustainable family unit.
Basically, if you're a productive person, you want to maximize your return. So, you go where the action is. So does every other smart person. Often that place is a tech hub, which is now overflowing with smart guys. Those smart guys build adware (or whatever) and fail to reproduce (combined, these forces "shred" the IQ). Meanwhile every small town is brain-drained. You hometown's mayor is 105 IQ because he's the smartest guy in town. Things don't work that great, and there's a general stagnation to the place.
Right now, AI is a "capital shredder". In the past, there were barriers everywhere, and we've worked hard to tear those down. It used to be that the further the distance (physically, but also in other senses too, like currencies, language, culture, etc.), the greater the friction to capital flows. The local rich guy would start a business in his town. Now he sends it to one of the latest global capital attractors, which have optimized for capital inflow. This mechanism works whether the attractor can efficiently use that capital or not. That resource inflow might be so lucrative, that managing inflow is the main thing it does. Right now that's AI, but as long as present structure continues, this is how the machine of the global economy will work.
This is hogwash. It's incel and eugenic reasoning wrapped up all together.
Not every smart person (or even most) are engineers, and of the ones that are they don't all move to tech hubs, and the ones that do not all of them can't get laid.
And I'll give you a great reason why it's hogwash, the "brilliant" engineers that can't get laid in Singapore are the same "brilliant" engineers that can't get laid in their home town
Glad you said that because frankly you put it better than I was going to.
It’s the same nonsense as people going “Idiocracy is a documentary.“ Of course none of them think they’re the idiots.
What’s the alternative. Keep the smart physically separated, can never collaborate to make anything paradigm shifting and we just prod along with small town paper mills and marginally better local government?
Within the Landian system, I suspect he'd say the answer is economic "territorialization", the economic equivalent to the mechanism originally defined by Deleuze+Guattari in A Thousand Plateaus based on the territoriality of earlier work.
It's the process where social, political, or cultural meaning is rooted in some context. It's a state of stability and boundaries. For just the economic, the geographic would likely be the centroid of that, but the other vectors are not irrelevant.
One could argue that we suffer to the degree we are deterritorialized, because the effects thereof are alienating. So, we need structure that aligns both our economic and psychological needs. What we have is subordination to the machine, which will do what it's designed to: optimize for its own desire, which is machinic production.
Note that none of this is inherently good/bad. Like anything, a choice has trade-offs. We definitely get more production within the current structure. The cost is born by the individual, aggregating into the social ills that are now endemic.
California had a great mechanism for this in their land grant colleges, which back before the protests of the Vietnam War were required to offer the valedictorian of nearby high schools (or the person with the highest GPA who accepted) full tuition and room and board --- then Governor Ronald Reagan shut down this program when the students had the temerity to protest the Vietnam War --- it was also grade inflation to keep students above the threshold necessary for a draft deferment which began the downward spiral of American education.
A little less min-maxing, perhaps.
The real question is whether the boom is, economically, a mistake.
If AI is here to stay, as a thing that permanently increases productivity, then AI buying up all the electricians and network engineers is a (correct) signal. People will take courses in those things and try to get a piece of the winnings. Same with those memory chips that they are gobbling up, it just tells everyone where to make a living.
If it's a flash in a pan, and it turns out to be empty promises, then all those people are wasting their time.
What we really want to ask ourselves is whether our economy is set up to mostly get things right, or it is wastefully searching.
"If X is here to stay, as a thing that permanently increases productivity" - matches a lot of different X. Maintaining persons health increases productivity. Good education increases productivity. What is playing out now is completely different - it is both irresistible lust for omniscient power provided by this technology ("mirror mirror on the wall, who has recently thought bad things about me?"), and the dread of someone else wielding it.
Plus, it makes natural moat against masses of normal (i.e. poor) people, because requires a spaceship to run. Finally intelligence can also be controlled by capital the way it was meant to, joining information, creativity, means of production, communication and such things
> Plus, it makes natural moat against masses of normal (i.e. poor) people, because requires a spaceship to run. Finally intelligence can also be controlled by capital the way it was meant to, joining information, creativity, means of production, communication and such things
I'd put intelligence in quotes there, but it doesn't detract from the point.
It is astounding to me how willfully ignorant people are being about the massive aggregation of power that's going on here. In retrospect, I don't think they're ignorant, they just haven't had to think about it much in the past. But this is a real problem with very real consequences. Sovereignty must be occasionally be asserted, or someone will infringe upon it.
That's exactly what's happening here.
They still gotta figure out how their consumers will get the cash to consume. Toss all the developers and a largish cohort of well-paid people head towards the dole.
At some point rich people stop caring about money and only care about power.
I know that all investments have risk, but this is one risky gamble.
US$700 billion could build a lot of infrastructure, housing, or manufacturing capacity.
There is no shortage of money to build housing. There is an abundance of regulatory burdens in places that are desirable to live in.
Its not due to a lack of money that housing in SF is extremely expensive.
What $700 billion can't do is cure cancers, Parkinsons, etc. We know because we've tried and that's barely a sliver of what it's cost so far, for middling results.
Whereas $700 billion in AI might actually do that.
Your name is well earned! "can't cure cancers" is impressively counterfactual [0] as 5 year survival of cancer diagnosis is up over almost all categories. Despite every cancer being a unique species trying to kill you, we're getting better and better at dealing with them.
[0]https://www.cancer.org/research/acs-research-news/people-are...
Treating cancer is not the same as curing it. Currently, no doctor would ever tell you you are "cured", just that you are in remission.
Yes, we're getting better at treating cancers, but still if a person gets cancer, chances are good the thing they'll die of is cancer. Middling results.
Because we're not good at curing cancers, we're just good at making people survive better for longer until the cancer gets them. 5 year survival is a lousy metric but it's the best we can manage and measure.
I'm perfectly happy investing roughly 98% of my savings into the thing that has a solid shot at curing cancers, autoimmune and neurodegenerative diseases. I don't understand why all billionaires aren't doing this.
Maybe it should give you pause then, that not everyone else is investing 98% of their savings?
> What we really want to ask ourselves is whether our economy is set up to mostly get things right, or it is wastefully searching.
I can’t speak to the economy as a whole, but the tech economy has a long history of bubbles and scams. Some huge successes, too—but gets it wrong more often than it gets it right.
I suspect a lot of this is due to large amounts of liquidity sloshing around looking for returns. We are still dealing with the consequences of the ZIRP (Zero Interest Rate Policy) and QE (Quantitative Easing) where money to support the economy through the Great Financial Crisis and Covid was largely funneled in to the top, causing the 'everything bubble'. The rich got (a lot) richer, and now have to find something to do with that wealth. The immeasurable returns promised by LLMs (in return for biblical amounts of investment) fits that bill very well.
This is another facet of the fierce opposition to AI by a swath of the population: it’s quite literally destroying the last bit of enjoyment we could wring from existence in the form of hobbies funded through normal employment.
Think of the PC gamers, who first dealt with COVID supply shocks, followed by crypto making GPUs scarce and untenable, then GPU makers raising prices and narrowing inventory to only the highest-end SKUs, only to outright abandon them entirely for AI - which then also consumed their RAM and SSDs. A hobby that used to be enjoyed by folks on even a modest budget is now a theft risk given the insane resale priced of parts on the second-hand market due to scarcity.
And that extends to others as well. The swaths of folks who made freelance or commission artistry work through Patreons and conventions and the like are suddenly struggling as customers and companies spew out AI slop using their work and without compensation. Tech workers, previously the wealthy patron of artisans and communities, are now being laid off en masse for AI CapEx buildouts and share pumps as investors get cold feet about what these systems are actually doing to the economy at large (definite bad, questionable good, uncertain futures).
Late stage capitalism’s sole respite was consumerism, and we can’t even do that anymore thanks to AI gobbling up all the resources and capital. It’s no wonder people are pissed at AI boosters trying to say this is a miracle technology that’ll lift everyone up: it’s already kicking people down, and nobody actually wants to admit or address that lest their investments be disrupted to protect humans.
I don't think these companies buying realize how much animosity they're creating with literally everyone until it explodes on their face.