alt Hacker NewsThe main argument builds on the assumption that the economy is a zero sum game when it clearly is not. Just because we invest these ressources in AI does not mean we could mobilize the same capital for other pursuits.
Precisely AI is being built out today because the value returned is expected to be massive. I would argue this value will be far bigger than railroads ever could be.
Overspending will happen, for sure, in certain geographies or for specialty hardware, maybe even capacity will outpace demand for a while, but I don’t think the author makes a good case that we are there yet.
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In addition, the massive investment may be overbuilt, but then likely will end up being useful long-term. This is just as the initial buildout of the internet to power pets.com was a bust at the time, but then led to Amazon, YouTube, Zoom, etc and in fact led to us being able to weather Covid better than you'd have expected.
The modern internet came from folks getting connected over-exuberantly based on near-term returns (with a lot of investors losing their shirts) but then humans figured out what the actual best use of the technology.
Highly recommend this book for more, Carlota Perez is very insightful: https://en.wikipedia.org/wiki/Technological_Revolutions_and_...
> "... builds on the assumption that the economy is a zero sum game when it clearly is not"
Be cautious making assessments as to compounding effects; while it remains the critical attribute, the compounding nature of a system is not always obvious. For example, the author is correct that financing for AI CapEx is starving other fields of investment at least in the short term.