I went to a Christmas party held by my retirement investment company. Why not? I got nothing better to do. Besides, I needed to meet my new adviser in real life. I’ve only had a zoom meeting with her. FWIW, I was supposed to meet them live, but the invite that I got was zoom.
The two I’ve met there ask good questions. Not really to find out things they don’t know, but more of seeing where I am.
At the party, she asked me if I thought AI was a bubble.
It most certainly is. I’ve seen this movie before. It doesn’t have a happy ending. I lost my cushy gig to it back in the day when the Interwebs and Networking bubble blew up. Denninger has a couple good pieces on this here and here. Although the app is different, AI vs. Interweb sites and access, the buildout is identical with one exception – scale.
Back then, they were running fiber and putting in datacenters everywhere. When it started melting down, it created a doom loop, or preference cascade. A year later, there are thousands of dudes on the street and tons of gear rotting in warehouses. A lot of mistakes were made, like with Lucent treating networking gear leasing like telecom switches. One of those has a lifetime in decades. The other, in a few years. When the music stopped they were stuck with billions, five of them if memory serves, in bad paper.
Back then the gear was a bit different. Not as powerful, not as power and cooling hungry, took a bit more real estate. Now, servers are virtual. You can stack dozens inside a 2RU (about 2.5″ tall) rack, which will hold a dozen such servers. These datacenters consume gobs of power for the servers as well as the cooling systems. More power than a small city uses. We’ll need power generation, and transmission. How long does it take to build them?
How long does it take to permit them, especially if they are nukes. Because wind and solar won’t cut it.
This technology, just the hardware, costs. You have to buy the space and the gear.
You have to pay the electric bill whether you are making a dime or not. And to this date, none are. Just like the e-everything web companies back in 2000. When you get your AI on, how do you make money? Use OpenAI or ChatGPT? Do they charge enterprises per use, or per request?
How do they make money?
And then there’s the quality of AI’s work. I’ve found it lacking. It does some stuff well. Other stuff it makes a mess. It does best when it’s a first iteration request. For instance, I put my resume into it and it did a good job of gussying it up. Then I said, focus the doc on technical project management (I have that on my CV). It made a mess and made up half the thing. Vox Day found this as well. It worked like a copy of a copy and got worse and worse.
In short, it starts believing it’s own bullshit. Like any neural network. Look at the left. Sure, it’s a meat based network, but the principal is the same.
How do we know what’s good, beautiful, and true? Mostly experience. Experience a machine cannot have.
Jensen Huang, the CEO of Nvidia was on Rogan and answered that very question. He said there’d be an authoritative source, his AI for example. There’s a hack now to poison AI. Poisoning DNS is a common hack. If you put in a spurious DNS entry to reroute traffic, it takes some time to find out 1) that it’s happening and 2) fix it. Imagine AI having gotten hold of a Grima Wormtongue, a governmental one, gets into the AI mix.
I deal with AI all day. The tools I use are AI based. Sure, they automate some tasks, but they make others harder. They are also very immature, lacking the formatting ability of even something as common as Word or Framemaker.
I’m not a huge fanboi of it, like Rogan, or even Elon Musk. I think when the bubble blows, we’ll learn, as we did with the last bubble, what the thing is useful for. It won’t be running our lives, buy and large. I see it becoming a tool of the cognitive elite, as described by Charles Murray. The others, notsomuch. In order to make use of AI, you need to speak and write clearly. Each generation I’ve seen since mine is becoming less and less literate and able to communicate concisely.
We sure won’t wind up with “Guaranteed High Income” like the fanbois like Rogan and Musk say we may need. That doesn’t work. We know that. We’ve seen that. When everyone has the same thing, everyone has nothing. That $2k a month is now zero. Everything inflates.
We’ll never get there. We’re heading into peak crisis of a fourth turning. There won’t be money for that silliness. The bubble pop will set that off. Keep in mind, we’re nearing $40T in debt. The interest on which is starting to spiral. We’ll see housing, medical, and cars blow up as well.
So I don’t see how some magic AI future happens out of all that.
Inspected By Pat 