I don't fully agree with Zitron on all his points but it's very hard to disprove the larger points will somehow resolve themselves. One point that I think will determine the future, moreso with data centers, is politics. Laws are not unchangeable and making decisions that determine the next 5-10 years of action based on the current law is a recipe for disaster. "Buying" a politician still has to account for the fact they can be voted out.
In a newly evolving situation, you have to assume that it's possible that the laws will change. Typically the way you account for this is hedging or keeping reserves to adapt.
Let us assume a person cannot change society, they simply do not have the leverage, even if they are a billionaire or most politicians. This is a systems problem, requiring enormous investment of time and resources to change trajectories of. Therefore, the choices available are to continue to live in a low trust society, or move to a high trust society and minimize your exposure to low trust society impact on your life. It's unfortunate. I would very much like to be wrong, please correct me if I am mistaken.
I cannot speak to China, but my recent personal experience is that Japan is high trust throughout Tokyo, Kyoto, and Osaka. Would love to hear about the trust situation in China from anywhere who has recent ground truth.
Even if we don't consider economics, the reason "AI" has not increased white collar productivity is because it's not necessary for knowledge work beyond aggregating information for research. Knowledge work has always been a lot more arguing than "doing".
Google was already the default option for this, and Google Gemini is a genuine improvement for Google Search. Google (and Apple) have sidestepped all the drama by just improving their existing products. Sometimes that's the right call in the shorter term, and this is one of those times.
Yes, and the scary thing is, when Google starts selling ads in Gemini results, you wont be able to see them, it will be a bigger business that Google Search ever was.
Update: Perhaps this is what Zitron doesn't want to say out loud, (and why investors are confused), the return on investment is going to come from having the largest mind control machine the world has even known.
There's just no easy way to see what makes LLMs able to duplicate the profits of the entire existing tech sector of the economy. This is the return they need to make based on what they're currently expensing and projecting. Couple that with the circular financing agreements and it's just preposterous. Zitron may have been first and most outspoken to this argument, but like all bubbles it's an open secret.
The chimp brain cant handle unpredictability for too long. Just keep pushing people into unpredictable situations or specifically try getting someone to say I dont know constantly. Beyond a point story generation starts, to feel sane within an "I dont know" reality.
Truth is things are unpredictable. Predictability of anything hasnt increased.
Stories/Lies exist for cope. Cause of chimp brain dynamics responding to unpredictability.
So right towards the end Zitron says it isn't clear what Google, MS and Amazons plan is. But he just finished explaining that Anthropic and Open AI are paying for them to build data centers, and implied that on face value, this was to rent the data centers back to Anthropic and Open AI.
Seems to me they are just bleeding them dry so that when the money runs out for Anthropic and Open AI, they will be left with data centers that the can run their own (or open) models.
His follow-up point was, "that seems like a ridiculously nice double-dipping situation" until you realize that money depends on only two "unsustainable" customers, spending other people's money, that now have to become absurdly massive to ever make this work.
If you read more of Zitron's work, he says that there's little demand for the AI compute power outside of OpenAI and Anthropic. If they are bled dry, then the hyperscalers will not have enough customers for the data centers which they have blown so much capex spend on and will have to soon go into debt to ensure they can be built. The GPUs and the high bandwidth memory they use have little use other than to run and train these LLMs.
and he wrong on all of those accounts. but he’s got the best gig, he has been writing literally one same article for years, gets LLM to shuffle the words and publishes it under a different title :)
> little demand for the AI compute power outside of OpenAI and Anthropic.
I think every other business is going to slowly wake up to how powerful machine learning can be, and or, how important it will be to run your own models you can trust.
I don't doubt that there is a bubble, but once the hardware is built, there will be plenty of customers.
I guess if you overpay for hardware, you can be undercut by data centers built after the bubble pops, but that might just mean your return on investment is slower.
I don't think so. AI is a general purpose tech and you have many companies still doing discoveries on how to apply the technology in a useful way. It's an expensive solution in search of a problem. Not to mention no one wants to pay the actual cost of what it takes to deliver the technology. The whole business model is unsustainable.