either AI achieves hyper-efficiency and triggers systematic economic demand destruction due to unemployment, or it underperforms and sparks a massive tech-sector asset bubble burst
If AI is as good as valuations - it crashes. If AI isn’t as good, it crashes. all eggs in one basket economy.
Every future leads to a massive financial shitstorm
AI is priced in as a technology to end all markets. The last bull market you will ever see.
It’s a miracle markets didn’t notice this “damned if you succeed damned if you don’t” type of inevitable checkmate
I have been building a bunker
They learned from 2008 that Too Big Too Fail(tm) means the government bails you out.
This was the problem with not OBLITERATING the banks in 2008. Had the US government taken over the banks and wiped the investors, there would be more pushback right now.
It's currently larger than the 1880s railroad boom.
"Overbuilding and speculative debt ultimately culminated in the Panic of 1893, plunging the nation into a severe economic depression."
"During the 1880s, private railroad enterprises represented over 60% of the total capitalization of the entire U.S. stock market, peaking at 63% in 1881 and 1885."
But as a % of total GDP, you are correct.
In terms of infra spending as a percent of GDP, 1880s railroads were at 5-6% at peak while AI is estimated to reach 3+% in a year or two.
Every time I ask Claude to do something, it does it just fine. I never have to wait in any sort of queue that would be common in other kinds of shortages.
The hyperscalers are all so oversubscribed that they require commits from enterprises so if you only have a transient need you might be out of luck [from your vendor of choice]. Additionally, not all GPU service providers are equal. Semi Analysis has some great articles explaining why.
Pricing -- exactly where shortages show up in a free market economy.
what I'm wondering: is there a shortage of compute in the current installed base? Why isn't the installed base of compute increasing drastically in price, and/or forcing me to wait in a queue to use it?
Have you looked at RAM prices lately?
Installed base is existing computers that already have RAM. Why aren't VM rental prices going way up?
No, rationing is what you get in command/centralized economies like the USSR. In free market economies you get price explosion, like we're seeing right now with DRAM wafers.
like, I can rent a VM from AWS for the same price as 5 years ago...
There will be an abundance of shovels. Nebius already crashed by almost half from its hype peak.