alt Hacker News> likely would have otherwise been put toward stock buybacks
Stock buybacks from who? When stock gets bought the money doesn't disappear into thin air; the same cash is now in someone else's hands. Those people would then want to invest it in something and then we're back to square one.
You assert that if not for AI, wealth wouldn't have been spent on materials, land, trades, ect. But I don't think you have any reason to think this. Money is just an abstraction. People would have necessarily done something with their land, labor, and skills. It isn't like there isn't unmet demand for things like houses or train tunnels or new-fangled types of aircraft or countless other things. Instead it's being spent on GPUs.
Totally agree that the money doesn’t vanish. My point isn’t “buybacks literally destroy capital,” it’s about how that capital tends to get redeployed and by whom.
Buybacks concentrate cash in the hands of existing shareholders, which are already disproportionately wealthy and already heavily allocated to financial assets. A big chunk of that cash just gets recycled into more financial claims (index funds, private equity, secondary shares, etc), not into large, lumpy, real world capex that employs a bunch of electricians, heavy equipment operators, lineworkers, land surveyors, etc. AI infra does that. Even if the ultimate economic owner is the same class of people, the path the money takes is different: it has to go through chip fabs, power projects, network buildouts, construction crews, land acquisition, permitting, and so on. That’s the “leakage” I was pointing at.
To be more precise: I’m not claiming “no one would ever build anything else”, I’m saying given the current incentive structure, the realistic counterfactual for a lot of this megacap tech cash is more financialization (buybacks, M&A, sitting on balance sheets) rather than “let’s go fund housing, transit tunnels, or new aircraft.”