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.
This is 100 manhattan projects. Lots and lots and lots of things that can be done. Reminds me of the quote "water water everywhere not a drop to drink" ==> Money, money everywhere, not a cent goes towards something remotely useful.
1) Could've added nifty features to roads (rf beacons?) and make it super easy to build autonomous vehicles. This would've solved so many problems, but most importantly 45,000 lives every year and millions of accidents.
2) Could've given the money to farmers who are getting ethanol subsidies today to add panels, supply tons of power to the grid, creating permanent income to the farmers instead of handouts every year.
3) Could've built many Universities permanently free which is feasible with an endowment that large.
4) Could've built walking/biking infrastructure in most cities, which would help reduce healthcare expenses. Most of the expenses today are lifestyle/metabolic diseases.
5) Could've switched the entire country to clean energy, exporting ALL of the oil and create a sovereign wealth fund.
6) Could've built a city for homeless people with homes, excess energy production (solar) providing the function of a UBI, a massive hospital with health and mental health facilities, de-addiction centers. New city in the middle of nowhere where land is dirt cheap. Army corps of engineers could execute this.
You are describing altruistic gifts, not investment meant to generate a return.
All this money is being deployed to try and turn a dime into a dollar.
The biggest area I can see where money could be deployed into building something useful -- while generating a positive return -- is real estate development in cities with massive housing shortages. That's basically not allowed in the same cities. In large part, because people who yearn for an more altruistic world care very much about their own quality of life and property values than they do about the well-being of their community in the long run.
If you want to "invest" in society and get a return, by all means, buy government bonds and support the government's policies to do these things. You get a return, and the government gets money to invest in society. It's a $30 trillion dollar industry.
I'm not sure I understand your point. What benefits does treating social/national governence as an industry bring to society? Besides the govt funds it operations through taxation in addition to debt.
Your unstated assumption that investments in AI were private and therefore beyond question simply isn't true.
The AI industry's profits depend to a large degree vast textual corpuses that they acquired and trained on in either straight up illegal or at the least in legally murky contexts; public and private knowledge form the backbone of these enterprises. Said industry then serves AI models to customers via data centers that again off load the cost of inference to the public.
Of course, AI companies could step up pay up their fair share and people will happily treat the prerogatives of private enterprise as private. But until then I think certain quarters of society will continue to believe, rightfully so in my opinion, that AI companies are on the hook for unacknowledged debt.
Of course morality doesn't inform law so the current situation isn't illegal despite how egregious it is. But the law can only attempt to deliver justice, it can't guarantee it. Which is why open, honest, collaborative discussions are important to have exactly now.
If you think AI is built on copyright infringement, that's fine, and I somewhat agree with you. That's immaterial to the argument.
My point is that investment here -- "the outlay of money usually for income or profit" -- isn't just giving people stuff altruistically. Investors, here investing in AI, are trying to get a return on their investment.
Yes, that is what the money could have been used for. Altruistic or otherwise, this is what could have been done with that degree of money.
Let’s pull on this thread though. This money is investment, in the hope that it grows into more than a trillion.
Right now, this looks like it’s mostly going to displace workers. Some of it will address demand that cannot be addressed directly; you couldn’t afford an editor to look over your emails, now you can.
Much of it will wipe out intern level work across the entire economy, reducing the opportunities for people to learn and develop.
This tech is already devastating education across the globe, and has been built on outright theft of creative work by people who can expect nothing in return.
There was an article on HN how authors of self-help books are seeing a reduction in revenue from book sales, so this is wiping out multiple sources of revenue via automated harvesting of content.
What, precisely, is there to be happy about here? The convenience of writing more code, at the cost of everyone else’s happiness?
There is a LOT better, that could be done with $1 tn.
> This tech is already devastating education across the globe, and has been built on outright theft of creative work by people who can expect nothing in return.
Not sure you realize how divorced from reality this statement appears (at least to me). These things make fantastic personal tutors for material up though the bachelor's level that are available around the clock and never tire of your inane questions. Currently google offers this for free on their home page without even needing to log in (at least from a residential ISP in the US).
If some subset of people use calculators to cheat or their skills atrophy how does that have anything to do with whether or not they serve a useful purpose?
LLMs will revolutionize education for those that care to learn. They will have at least as large an impact on access to knowledge as wikipedia had ~25 years ago.
>Yes, that is what the money could have been used for. Altruistic or otherwise
If we take peoples' retirement investments, and spend it on puppy dogs and ice cream for veterans and children, we're going to be in a worse place than we started a few years down the road.
Maybe the market will crash. Maybe it will grow. It's hard to say, but that's the point if investing.
None of this is based on anything that stands up to scrutiny. This isn't investing, this is buying the story being sold for AI.
Lest we forget, A story whose bull case, automates the jobs of many people who are currently employed, creating a gig economy for white collar work.
Anyone who is buying this, is buying this for the potential future payoff. The firms themselves bleed money at scales that makes the destruction in outright war look like a responsible use of resources.
> For every £1 invested, walking and cycling return an average of around £5-6. A ‘benefit to cost ratio’ (BCR) greater than or equal to 4 is considered to be ‘very high’ value for money. Putting this in some context, the predicted BCR for the HS2 (high speed railway) wasn’t nearly so impressive at about £2.30 for every £1 invested.
One of the examples from the article: Xavier owns an apartment that he rents out at a loss of $1 billion/month. Seeing this success, he decides to make financial commitments to construct $850 billion in new apartments in places nobody wants them. He convinces Ted to leverage everything he owns to help him build the apartments, telling him that once they are built, every human being on Earth will live in them. Ted contributes $100 billion, part of which immediately goes toward paying off Xavier’s $1 billion/month loss. Forbes gives Xavier and Ted a cover feature, likening their building project to God creating the Heavens and the Earth. Many Fortune 500 CEOs take this comparison literally and establish a new religion around Ted and Xavier, with themselves as high priests. Soon, they start a Holy War with the pope, declaring “Ted and Xavier the One True Gods on Earth” and promising to “purge the nonbelievers” in an official press release. They annex, then subsequently demolish, Vatican City, committing another $900 billion dollars to build new apartments in its place. Forbes hails this as “disruptive,” though it’s not clear how Ted and Xavier plan to finance the project.
It's private money. At least in my country the government isn't giving a single cent to AI outside of fundamental research projects.
If companies want to bet all their money at roulette they are free to do so.
Does your govt not buy memory, chips, computers? They pay premium for that. In addition, so middle manager in govt will say - I will work only if I have Premium AI Claude subscription. 100s of companies are doing that. They will fire workers - cause unemployment - affects economy- health etc for common citizen.
Look at what Elon Musk did to force index funds to buy SpaceX, which is money from places like retirement funds. When there's a bag to be held, it's not the oligarchs that are going to be holding it if they can help it.
You have to wait 20 years for the returns to society. Public education was enormously successful when it was introduced in the 19th century. There's just no profit in waiting for second order effects to kick in.
So was Rural Free Delivery. Farmers being able to communicate was a massive boon. There is a channel for farmers called RFD tv. They completely scrubbed the free provided by the government part after private equity bought the tv channel targeting farmers. Then they got Imus in the Morning so farmers listed to Imus, Rush, Hannity, and orielly forgetting the government helps them.
Diminishing returns. Per-student education spending has been going up since 1990 except a dip during the 2008 recession. Adjusting for inflations it’s now double what it was 30 years ago.
Why would they be any better than the people distributing the money to them in the first place? The students working hard at "providing the good educational outcomes", by this economy's standards, are suckers.
What makes you choose the 19th century for public education creation? It was my understanding the Puritans and thusly Yankees that spread through NE and the north Midwest were staunch proponents of schoolhouses and publicly funded education dating back to the to the early 17th century.
Investment in education is one of the best ROI a society can have. Quite surprising that in the USA this relationship has been eroded by schools spending in sports and admin, in most other developed countries it's a quite direct relationship between more investments -> better educational outcomes.
But there's 2 problems with that. To save money governments declare that "teaching is a profession". By which they mean: "teaching", not subject matter expertise, matters. Except:
1) the single thing you cannot beat is capable teachers. And NOT capable as in able to teach, subject-matter-experts. And that is what everybody wants to avoid at all costs.
Put it like this: an unwashed, abrasive, offensive smelly asshole with a master in math can teach kids math. A super-friendly, nice, beautiful, polite social science major (or not even that) who doesn't know math well cannot. The level of teachers needs to be an order of magnitude above the level expected of kids at the end of the class. Knowledge of the subject needs to take absolute precedence in teacher hiring decisions, to the point that good teachers get rejected if lacking expertise in the subject.
This is not how things work. They only worked that way for a short while due to the crash of 89. I've had a French teacher that couldn't speak more than "some" French. Certainly nowhere near fluent.
2) Money needs to support that. Which means for Math, the money for math teachers needs to be competitive with research departments of banks, and very different for different subjects, which seems offensive to schools and government in general. If teaching positions aren't competing with other professional careers in the subject matter, it will never work. This will, of course, mean that many science teachers make more than a school principal and even a district administrator. Deal with it.
For Math, they are literally not even 25% of that, but even for French it's insufficient.
> 2) Money needs to support that. Which means for Math, the money for math teachers needs to be competitive with research departments of banks, and very different for different subjects, which seems offensive to schools and government in general. If teaching positions aren't competing with other professional careers in the subject matter, it will never work. This will, of course, mean that many science teachers make more than a school principal and even a district administrator. Deal with it.
I believe this to be a heavily US-centric view, Estonia and Finland do not pay more for math teachers than they could get in banks' research departments but still manage to get competent teaching across most school subjects.
Things work outside of the US, the issue is the US does not want to look outside and adapt itself to incorporate what's been learnt from other systems. It's a "do the US way or no way" attitude, and it's slowly eroding to become more a "no way" than any kind of "US way" of doing things.
Doesn't change the fact that I have 2 daughters that are getting Math education from someone who is easily beat in math teaching quality by Google Gemini (I realize this is a specific strong point of Gemini, but still)
It doesn't change that fact, unfortunately it's a complex societal issue which presents quite heavily in your society, it requires decades of constant improvement to change anything.
I don't think American society has the appetite nor patience for the actions needed for this kind of change.
Well yes, you have to spend the money wisely. How could we construct a system so that we have 2x as many teachers (thereby halving the classroom size)? That would have a lot of good second-order effects beyond test scores.
So why has per-capita student spending doubled since 1990 (adjusted for inflation) without any increase in test scores? Why haven’t we been spending the money wisely?
1. Test scores have increased
2. Simpson's Paradox - we are educating a far great % of young people then we used to be, so we're pulling in disadvantaged kids that would've been left out of the education system, or simply left out of testing. https://www.brookings.edu/articles/when-average-isnt-good-en...
A parallel is when I looked into home births versus hospital births when my wife was pregnant. The statistics of home births crushes hospital births in terms of outcomes. But that's because only healthy women who don't have complications are in the home birth category. Hospitals must admit anyone that shows up in labor, and must handle any negative situations.
Schools now handle so many more kids than they used to, and try to meet the challenge. They are failing because the challenge is too great given the funding, not to mention the corruption of the bureaucracy that inflates administrations.
But even the chart disaggregating scores by race shows that within each group test scores barely went up since 1990. Meanwhile, inflation adjusted per student spending has increased 30% since then.
And, school administrators are the opposite of what's needed in schools: the US needs better teacher pay and more teachers -- the ones who actually teach students.
Short of that however, yes, we get philanthropic failures such as Zuckerberg's attempt in silicon valley, and basically any attempt throughout Africa as examples. Throwing laptops at the problem doesn't work, neither does external donations that get funneled to the wrong places.
> we instead injected $2 trillion dollars into things like infrastructure (real infrastructure, not GPU warehouses), education, helping out communities ravaged by globalization
Even excluding military spending, US governments spend $2 trillion every 10 weeks.
I wasn't making a judgment about including or not including state spending. It's just that "US governments" is not a common way for Americans to describe federal and state. People think federal when they see "US government".
You have to include state and local spending too. We’re at 40% of GDP which works out to almost $13 trillion: https://fred.stlouisfed.org/graph/?g=1CFpQ. Subtract $1 trillion in defense, and we’re spending about $1 trillion a month on government.
Does that chart double-count state transfers to municipalities? When I was in local government, about half our school budget came from the state, so there would be entries on both ledgers.
AI datacenters don't really confer any geographical benefit since their output can be transmitted at extremely low cost. The benefit of local datacenters is purely political and has nothing to do with technological advantage.
For context, the US alone spends annually a bit more than $2T on Social Security, Medicare, and Medicaid. That money is widely dispersed both geographically and socioeconomically. $2T is not as much as one may think. I think we should let investors put their private money where they wish.
Also, as an aside, the benefits of globalization on the balance far outweigh the drawbacks. Globalization has been the primary force pulling 3rd world countries out of poverty over the last 80 years.
You're equating on-going expenses with new investments, which is just not the same thing.
If "$2T is not as much as you think", and yet we could fund literally tens of thousands of more interesting projects with this money, then we are severely misusing capital in general. My point still stands that we're pouring more money into a technology than ever before, and yet it's a technology that's been a net NEGATIVE socially so far.
I agree with you. The parent thinks 2 trillion is injected into AI companies. I think that is false and they are conflating it with market cap. It does make your point even better.
People invest in what would get them the highest ROI. No one is really thinking about “improving the world”* when they invest.
What’s scary about the AI boom is people over investing and not being able to recoup their investment which will lead to knock on effects - companies going bankrupt and people losing jobs, savings gone, … etc.
* As ESG has shown, not everyone agrees on what is considered “improving”.
It all sounds great, but unfortunately human nature is that money attracts corruption, so how could a $2T injection be managed in a way that ensures everything is square, without adding significant overhead to the spending?
Governments are often just as bad at this as private entities are.
It's quite easy. The money you "inject" needs to have demurrage.
You can then give all of the $2 trillion demurrage dollars directly to the most corrupt individual on the planet and it won't matter.
There are two scenarios:
1. The recipient keeps the money: It will automatically be returned.
2. The recipient spends the money: It has flown from the most corrupt individual on the planet to a less corrupt individual.
If we assume that each transaction allows the next recipient to make a decision on how to best spend the money, it would automatically spread out, since it cannot stagnate and pool up at any given individual.
Short term corruption doesn't pay, because accumulating excess money that you don't need via corruption just means your demurrage fee is higher.
Investing or lending money means giving it to someone that needs it more than you do and since the demurrage defeats the zero lower bound, it is rational to do so even at 0% interest since it allows you to avoid the demurrage.
And here is something that isn't intuitive for people whose mental model assumes permanent capital scarcity. If supply and demand on the money capital markets are balanced out, the expected interest rate is 0%.
Lower capital costs mean that products can be cheaper now. It is also much easier to invest into long term projects, e.g. against climate change, since the investment only needs to break even rather than growing the economy even further.
Oh yeah, also you now get full employment, like classical economic theory predicts. No more automation scare and feeling like the economy is trying to get rid of you or justify removing working class humans or being hostile to them.
The absence of unemployment makes welfare unattractive, which in turn means that governments will simultaneously have more tax payments and less welfare expenses simultaneously. All welfare should be paid out as demurrage currency in all countries. It's completely logical.
Since capital markets are now fair, it is possible to reduce total debt by paying off loans, whereas with permanent money the holder of money can always decide "I'll spend it later" thereby delaying the possibility of paying off a debt using that money, which is implicitly an extension of the duration of the debt. Given an infinite holding duration, the expected duration of the corresponding debt is obviously infinite too (eternal growing debt woooo).
Oh and it could have saved pension systems if it had been adopted ahead of time. Pension systems collapse because shrinking populations yield less output in the future but permanent money tells you that you can build a time machine to take labor from today and just teleport it straight into the future. Who needs young people working for you, if you can let the money work for you instead! Everyone knows the value of a dollar bill is backed by a humanoid robot inside the dollar bill that can perform exactly one dollar of work.
It won't make much difference. The US has a lot of problem, but "not spending enough money" isn't one.
The US government spend a lot on healthcare ($5.3 in 2024)[0]. More than most European countries per capita. But many people still feel that the US hardly has healthcare at all. Pouring more money without a full structural overhaul will likely make things worse.
And the $2T you mentioned is investors' money, which means that your plan is actually to increase tax by $2T and pour it into a system proven inefficient.
China is showing the world how it's done. Check out how many nuclear reactors they have built in the last 10 years. Turns out having a government that plans long term and actually delivers what they said they would makes a huge difference.
Central planning in China is leading to many terrible problems from a collapsed real estate market to a debt that’s 300% of GDP and accelerating. Yes, they often deliver with focus and determination but this can work sideways too.
FWIW, we have a similar problem in Canada where the federal government makes large investments and plans that backfire terribly.
That's a good argument. Centrally planned economy is not something I would support. Lots of negative examples from history. However, if the government is doing something (which all governments do, even in capitalist countries), then it would be nice if they were as efficient and reliable as the Chinese one.
China glazing is strange. I think they are a cool country but they would have killed to be in the forefront in the AI race. There’s something obviously right that America is doing.
An amusing comment. Thanks. On a website, where every mention of China must be annotated with a disclaimer about how brutal and authoritarian they are, a comment that just states an opinion without it sure looks like "glazing". Let me know if it's safe to talk truthfully about George Floyd yet, free-man.
> ...instead of injecting $2 trillion and counting into a few AI companies...
Similar to the "why we spend money exploring space when there are hungry people on Earth?" question, I don't think this is a This Or That argument.
People and companies have different interests, some don't/can't care about education etc so they don't invest in those fields. Forcing these people/companies to invest in areas they don't interested in usually results in bad outcomes that is way worse than just let them be.
But some, do invest in education or civil infrastructure projects. It's not as hot, because... well, usually it makes less money from those things.
The core problem is still that, it is hard to figure out how to invest in such way that it could help the disadvantaged people, while at the same time maintaining a 10 or even 100x growth in the next 5 years.
From the company's perspective, there's no dilemma here, it's 100x growth potential ahead of everything else.
“This is how the world should work” I say once I read that the handful of entities engineering global economic calamity are privately held. I interrupt my chat bot girlfriend’s detailed but deeply incorrect summary of yesterday’s news to type “Only a literal child would want to go to a school.” “That is so true! You’re really on to something brilliant there! To get a head start before we drill down on this further I’ve deleted the contacts group ‘School Friends’.”
I don’t know what she’s talking about. I’ve never had a contact group with that title. Out the window my car is doing donuts on an old baseball diamond.
I don't think we don't really know how to do many of these things you list even if we have infinite funds. There is a real chance that we will mess things even more if we have infinite funds...
Of course we do, we were doing them until about the mid-70s and then the ultra-wealthy figured out how to game the system and we got “Greed is Good” Geckos running things since.
And, in case anyone needed proof, this is reflected in the US degree-completion-data, when measured as a percentage (https://galacticbeyond.com/two-percent-programmer/plots/over...), and when measured as a derivative of percentage (https://galacticbeyond.com/two-percent-programmer/plots/deri...). That green top-line, is business-majors, and those two lines that declined from top to average are social-sciences and education (all data from 1970 to 2011). In 1970 1 in 10 graduates were in business, 1 in 5 were in education and in social sciences. By 2011, 1 in 5 (or 2 in 10) were in business, and 1 in 10 were in social sciences and 1 in 20 were in education. Healthcare went from 3 in 100 to 1 in 10.
> and we got “Greed is Good” Geckos running things since
This phrase is the opposite of an exaggeration. It sounds like it should not be true, but it really, really is. To be fair though, if you told me in 2015 what the headlines for the 2020s would look like, I would assume you are some kind of satirist or comedian.
What do you mean "of course we do"? Take education for example. Even in the 70s it was recognized as nothing better than something that create pencil pushers for the government and businesses..If we have more funds, we would just do more of the same...
So, take a look at my previous comment (I am sibling, not parent). The pencil pushers are still being manufactured by the educational system itself, but they major in Business now, not Social Sciences or Education. This is due to government policy from 1980s incentivizing the creation of more business entities (they each need accountants, and managers, and so on), which caused a few generations of people to go down that route. The tragedy here is that these generations have internalized the idea that the practical and profitable is more valuable than the aesthetic and beautiful. Instead of cultivating human beings that can contemplate and appreciate, we are cultivating human beings that can analyze and optimize (this is fine, but it is possible to have too many of them, which creates a competitive dynamic that _everyone_ has to participate in, that _nobody_ can opt out of, and that most people (80% or more) -- even very capable and strategic people -- are likely to lose).
What I am saying is that the paper pushers are allocated elsewhere, they are more miserable and shallow minded now, and they have a corrosive long-term effect on society and culture, even though they contribute positively to economic growth. In way, it is trans-generational debt with extra steps.
