The AI Investment Boom | slacker news

Reading this makes me willing to bet that this capital intensive investment boom will be similar to other enormous capital investment booms in US history, such as the laying of the railroads in the 1800s, the proliferation of car companies in the early 1900s, and the telecom fiber boom in the late 1900s. In all of these cases there was an enormous infrastructure (over) build out, followed by a crash where nearly all the companies in the industry ended up in bankruptcy, but then that original infrastructure build out had huge benefits for the economy and society as that infrastructure was "soaked up" in the subsequent years. E.g. think of all the telecom investment and subsequent bankruptcies in the late 90s/early 00s, but then all that dark fiber that was laid was eventually lit up and allowed for the explosion of high quality multimedia growth (e.g. Netflix and the like).

I think that will happen here. I think your average investor who's currently paying for all these advanced chips, data centers and energy supplies will walk away sorely disappointed, but this investment will yield huge dividends down the road. Heck, I think the energy investment alone will end up accelerating the switch away from fossil fuels, despite AI often being portrayed as a giant climate warming energy hog (which I'm not really disputing, but now that renewables are the cheapest form of energy, I believe this huge, well-funded demand will accelerate the growth of non-carbon energy sources).

My thoughts exactly. One of the best ways to develop countries is to just invest in a bunch of infrastructure. It probably won't be optimal, but it's better than not investing. It's interesting that the private bubbles in this case form a simulacrum of public investment. Instead of the government raising money to invest through taxes, capitalists just throw it away on fads. Perhaps it even helps to address inequality in the long run.

That said, I'm not sure the effect of digital infrastructure will be the same as physical infrastructure. A road has a clear material impact on all businesses in the area and their capacity to produce physical goods. But do data centres have the same effect? An extra lane on the road means you can get a greater volume of goods in and out to broaden operations to a larger area, but I don't see what positive effect two data centres could have on the average business. For as great as the internet is, I don't know how much value is created here. The question of what to do with a railroad is quite easily answered, but I'm not really sure what you can do with a datacentre. I guess whoever works it out will be decently rich.

But I feel we already have enough computing power, and the bottleneck in the whole process is making software that efficiently uses it (or knowledge of how to operate such software), rather than the power of devices themselves. Though perhaps as the bubble bursts, the price of programmers will also decrease significantly and the software issue will be resolved.