Thanks afro88. I was inspired by the storm in Terence's story, and my time on my sailboat when it felt like the sea was getting to be too much. Glad to share.
I wouldn't know what to tell someone about what entering a (the?) void is like, but the closest i can imagine is a situation where you're 1000 nautical miles out to sea in a small sailboat on a pitch dark cloudy moonless night, far away from anyone. A storm is brewing and the seas are getting large, though you can't see them, it's too dark for your eyes, though you feel the force as it throws your small boat around. It's more than you bargained for, but there isn't anything you can do about it. You're in it now. You're losing control of the boat. You're afraid of what will happen if you lose control, the seas grow larger... The rains and the lightning and thunder are here and it's just too much too bear, so you go down below and lay ahull, surrendering to the sea and forces beyond your control. The sea will make of you what it will, you're fate rests with something larger than yourself. A part of you dies that night, and what emerges the next day is different from what was swallowed by the storm. Your old self at the helm, somewhat unrecognizable. And a part of you never made it out of the storm, remembering that you're always out to sea, and that you needed to come out here to remember that.
I'm pretty sure these large models are run on Nvidia GPUs, not some unobtainable piece of secret kit. You could go down the street and buy from AMD or a number of other vendors to push out FLOPs if you wanted or needed, but you'll need a thick wallet to shell out for a cluster of GPUs to run these models. The reason people don't run the big Chinese models at home is that they can't afford the hardware, not that it isn't publicly available. This tech is essentially a large amount of matrix multiplications afterall.
I think the larger problem is that restricting US AI companies gives the Chinese a leg up because they now have a window open where they can become the source of the most powerful models available due to government restrictions rather than on technical merits. All Anthropic customers just got a downgrade last evening, for example. While the Chinese are able to serve the world or whoever, the US corporations will be limited to the US market, or whatever the powers that be will allow. This restrictiveness could turn out to be disadvantageous to American companies since people will migrate to wherever they can get the most powerful models.
I think you're over analyzing to some degree. The distribution and median outcome (1st through N order) was always negative for the course of action this administration has taken. The proponents try to sell people on the notion that this could all turn out great, which is way out on one end of the tail (e.g let's say 1% chance for sake of argument) for this action, and here we sit right around a median realized outcome for this kind of an intervention. I'd bundle all the N order effects up, then look how an aerial bombardment operation affects the liklihood of outcomes like the straight of hormuz being closed and/or controlled by iran, or iran surrendering the nuclear material and raising the white flag, etc...
You could probably do some simulations to see this was almost always going to be a losing strategy. Detailing the N order effects is good accounting, but the picture likely gets murkier the more you try to extrapolate N+1.
I think there will continue to be latent demand from PC, server and laptop users who have put off purchases as hyperscalers skip to the front of the wafer line with large outlays of spending for chips and RAM. This would likely extend out beyond the datacenter demand which analyst are pretty confident will be in place for the next 2 to 3 years, looking at Nvidia estimates alone.
I'm concerned that the regular Joe/Jane won't be getting a GPU or a system upgrade for some time. And then you have people in Africa and elsewhere who can't afford new phones.
There probably is some distortion in that the top spenders aren't terribly against cornering the RAM market and forcing everyone to pay more for local AI due to higher RAM, GPU and CPU costs while squeezing people through their APIs to access AI services, but that's an expensive gambit that depends on local models not getting good enough and frontier models to continue to get better while requiring large swaths of memory and compute, keeping consumers demanding the latest models from the APIs. But if the supply increases and people have more access to RAM, GPUs and CPUs, we'll likely see more local model usage and people doing all sorts of creative work, even training their own models.
I'm bullish, not so much of an overzealousness as having witnessed so many of these computing explosions to not doubt it much anymore. We'll collectively find all sorts of creative uses for these wafers and tech. If I were to bet on it, I'd simply buy a basket of stocks and hold, riding out the noise - nothing too surprising there.
It's a bit surprising many here are referencing the memory supply cycles without mentioning this revolutionary new application for memory people call AI. It'd be like talking about weather cycles and climate without mentioning global warming. Just like the planet is not going to get colder on average than it was for the foreseeable future, we're not going to need less memory for the foreseeable future.
China is trying to be vertically integrated, completely independent of outside influences and own the future supply/means of production. Memory and chips are piece of their larger plan. In any event, whatever China brings online will be absorbed - imagine a future where people's home computer has 100 to 1000GB of RAM in one variety or another. Folks are going to want better chips and more memory for years to come, supply will be absorbed.
The idea that we're still trading dark fiber from 2001 is an old narrative right? I guess it is still floating around. But, we're in a second big fiber build out for not only residential, but also to connect all these new data centers. Could there be some demand oscillation for silicon? Sure, but overall deep learning is not some passing fad even if someone gets too far out over their skis and over buys. So far Big Tech has increased spend 3 years in a row and next year they'll spend more than this year. Demand has evidently not let up for AI services, we still need more silicon.
I doubt consumers will regret these compute purchases in 3 years, my 3 year old GPU is still holding value, actually increased in value, and I use it more now than ever.
I did predict or expect that if oil went to $150 we'd be in recession territory, currently hovering below that level and folks are feeling the squeeze and aren't happy. Things could get worse or better, tough to tell, but I think silicon demand is more or less secular and will do relatively well in a variety of macro conditions.
An industry doesn't need to increase supply when demand increases, they can absorb the demand as profits. More so in an industry that is hard to enter into. Consumers hate this and call it all sorts of things like market failure, gouging, etc... In this case, the suppliers are slow walking increases in production and enjoying a run up in profits. They raise concerns about oversupply, as if this deep learning thing were some passing fad and the market will have no use for the new supply if it passes. It's a dubious notion though, the demand is here to stay and new supply needs to come online to meet demand. We simply need more silicon in the market. High prices should eventually bring new supply online, but I'm a little disappointed by the rate of the ramp up.
Apparently many people don't realize that Google is already invested, they are simply reupping their ante. Anthropic is a MicroAmaGooVidia amalgamation, a Frankenstein of more or less dead capital reborn as an AI corporation.
I suppose they could chose not to, but for 10B it's a simple choice to hedge a bet on the field.
Buy a cheap unlocked smartphone and run GrapheneOS[0]. I want my smartphone to be like my linux computers where I run them for as long as the hardware works and is still relevant. My iPhone 12 is getting close to its end of life support, yet it is still working well. We should expect better from trillion dollar companies. So I'm not supporting them with dollars wherever I can afford not to. That and I think it's more enjoyable to run something off the beaten path. I like to explore the space a little.
I swapped out my MBP for an Asus Pro Art running linux last year and that's been working out pretty well. Hopefully my cheap motorola phone will be supported by GrapheneOS soon and that will work out too.
Oil spiked to $110/barrel on the WTI front month futures contract this afternoon, a $20 jump up from Friday. At this pace we'll be at $150 a barrel in a week or two. If oil infrastructure keeps getting hit, even if the strait of hormuz is reopened, it'll take a long time to recover from. That's on top of the continued call for regressive tariffs and a weakening labor market. I think we're heading for a recession unless things turn around quickly, which I'm not seeing any indication of.
I'm curious if we'll get TACO Trump, or if he'll double down on this?
The strait of hormuz is the opposite of protected right now. Insurance companies aren't willing to cover ships if they enter the strait to pick up a load of oil, so little commercial traffic is occurring.
The real cost should include the spike in oil prices, the world consumes about 100 million barrels a day, so every $10 increase costs the world a $1 billion a day. We're already up ~$10, and it might continue to rise depending on how things go. You probably should include LNG in there too. If this oil halt is protracted, your stocks and bonds will be dragged down as well.
> Can you imagine human potential if it was somehow applied to crop harvesting efficiency, new medicines, etc?
We already have very efficient crop harvesting and Eli Lilly is nearly a $1 Trillion dollar company. Interestingly, the new medicine is designed to keep us from eating so many cheap calories (new weight loss drugs).
> Not everything has to be perfectly efficient but it just saddens me to see all these great minds doing what, adversarially harvesting margin from the works of others?
The traders and investors who work in this space also go to where they are need, aka where the big money is. So few of these folks are trading corn and soybeans, though some do, rather most are trading drug stocks, tech stocks, and recently sovereign debt related trading (e.g. things like gold and bonds). The focus is around the big questions of our time, like "Are AI investments going to pay off?", or "Is the US going to default/soft default?", and so on.
Deciding how a society allocates its resources, or places its bets, is an important function. Otherwise, you end up with planned economies by disconnected leaders, which often leads to massive failures and large social consequences. Unfortunately, the US is trending in that direction to some degree with it's giant fiscal deficits, tariffs, and tribal politics creeping into economic policy. Nevertheless, traders will weigh these outcomes in their trades, and you'll see a quick reflection from any major change in policy almost immediately, which is a helpful feedback mechanism. For example, the tariff tantrums caused by trump proposing 100%+ china tariffs where he crashed the markets last spring, leading to a moderation in policy.
HN and other social media sites are closer to 99% free labor, 1% paid labor, like dang. Free labor writing comments, blog posts, voting/moderating, posting videos and so on. Imagine if HN or Youtube had to pay people to generate all that content[1].
I think the only pay most get, is that you get to enjoy the site content. But in the case of Youtube, they slap so many ads in front of it that you often end up paying for this free labor content just to get rid of the ads. HN doesn't do Ad walls, but is more of a sales funnel for YCombinator and harvesting whatever value they can from the data, so not so intrusive.
[1] Youtube does pay some of the more popular content creators
The explanation given is that cartel air drones entered US airspace.
I guess my question is, doesn't this happen all the time? I would think drones would be an easy way to fly a Kilo over the border to whatever dropspot you wanted. I wonder what the new wrinkle is?
> The way the US government funds deficit spending is not by increasing money supply (though it could) but by issuing debt in the form of US Treasury bonds.
Sure it does. That Treasury debt is often bought up by the FED in huge tranches by increasing the money supply, they call it things like "unlimited QE (quantative easing)". For example, the FED announced unlimited QE on March 23rd, 2020 causing the stock market and real estate market to bounce. Trillions of new dollars were created in these last 5-6 years, and that's why everything costs more. The USG continues to overspend, and too often on dumb shit too (e.g. tax breaks for the ultra wealthy).
> US stock market index funds will crash when the US stock market crashes. That will require very large sums of capital to decide to move away from US capital markets. To give an idea of how much money would need to move - VTSAX alone is about $2.1 trillion, with hundreds of billions of dollars of shares of each Mag7 stock.
I'd like to make a technical note about markets because I see this mistake repeated in the comments. The money doesn't have to move out of the US markets to somewhere else for the stock market to crash. It only requires a destruction of confidence. For a hypothetical example, suppose the S&P 500 closes at 7000 on a Friday, and everyone loses confidence in the S&P 500 over the weekend (for whatever reason). The market can open on Monday 3500 with not a share traded before the open (no money was moved out of the market), and investor portfolio values are now cut in half. Since confidence is broken, nobody buys the dip, and the market closes Monday down to 3000.
It's an extreme example, but it's worth understanding the fundamental underpinnings. The markets are a confidence game. Sometimes we forget because we have good reason to be confident (e.g. in the S&P 500) and so it fades into the background that something like this could even happen, but it's not hard find these sorts of events in history.
I thought I made it clear, I'm not against data center build outs per se, a community might decide it's worth it to build one. If a community decides to go ahead with it, make it clear and open for the public to bid on it so the residents get the best deal available (e.g. reduced power bills, reduced property taxes, water usage limits, noise/light polution limits, whathaveyou...). These massive data centers are a new kind of business that most communities don't have much experience with, and I doubt they've had time to codify the rules. It sounds like the states are starting to add some more rules about transparency, which seems like a step in the right direction for making better deals for all involved.
Obviously data center bidders would prefer their activity to be kept in the dark, but does that make for good outcomes for anyone else except the bidders. First, the community would like to weigh in on whether they want a data center or not, often they don't. Then if they do, they'd rather have a bidding war than some NDA backroom deal with a single entity. All this does is serve Big Tech and Big Capital, and they don't need to run on easy mode, sponging off the small guy at this stage.
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