AI boom risks global financial crash, warn central bankers

I'm not usually for arguments of "this money could have been better spent elsewhere", but here's a thought experiment. Lets say instead of injecting $2 trillion and counting into a few AI companies, we instead injected $2 trillion dollars into things like infrastructure (real infrastructure, not GPU warehouses), education, helping out communities ravaged by globalization (I doubt most people on Hacker News venture outside of coastal areas, but if you want to make a REAL difference as an entrepreneur why not look at parts of the country that are struggling and figure out how you could make a difference there? You know, instead of trying to just ruin the economy for the sake of the already-obscenely-wealthy). I'm not saying all those ventures would succeed, but I think that amount of money put towards boring-but-real problems would make a much bigger positive impact for everyone.

Surely this time we'll learn our lesson and disempower the parasites that create these situations, right? Right guys?

Well assuming it's successful, there will be a large number of companies who's value will be reassessed as the token cost to replicate and run the business.

Multi-million dollar companies will be reduced into multi thousand dollar companies.

The CEOs will be replaced with teenagers in garages with their parent's credit cards.

If it stalls, then China will undercut the whole AI market with cheap electricity and crash the US stock market.

So what exactly is the win scenario here?

https://archive.is/xMD3t

Is there any comprehensive list of historical warnings from central bankers?

We are 81 years away from the end of World War II. The baby boomers born after are the ripest target of financial sharks aiming to get a chunk of their retirements. People will be liquidating to settle estates, to pay inheritance taxes in large numbers. The AI boom feels like a stealthy rug-pull from other assets that are likely to tank from retirement withdrawals and into something that may last a little past the boomer assets wave.

Well there's also the fact that fundamentally and ultimately, AI is incompatible with the economic system. Capitalism is rooted in human labour having positive economic value, and hence demand. AI will ultimately automate all labour, making the economic value 0. Eventually capital generation will simply die and the system crashes.

There’s no question we’re in a massive AI bubble, the only question is how do we get out of it without wiping out the broader economy.

same as it ever was

My guillotine & rope startup is going to make a killing (no pun intended).

Wishful thinking has it that we rally our representatives to let OpenAI and consorts rot. The last thing people should do is bail these delusional people out. Let them have it worse then WeWorks and let’s see if their self crowned AGI can help them out of their misery

"Claude, how do I become a prepper?"

Pretty much. Given the levels of investment in capital and research if AI companies actually hit what they're aiming at they'd have to collapse the labor market to recoup, bricking the economy in the process. Given the levels of outside investment inflating valuations, if the bubble pops it's 2008 all over again. There's this incredibly narrow window of "just useful enough to extract rents" where everything doesn't go to shit.

Yes now that everyone’s equity is tied to overvalued assets, it’s a problem because it can have economy wide effects like in the subprime mortgage crisis.

[dead]

Meanwhile AI has gotten so good it can just about one shot a SaaS app.

I’m not worried about it…