Google Replaces Millions of Intel's CPUs with Its Own Homegrown Chips

>On the flip side inflation and wealth inequality has gutted the average workers relative pay check. 200k today is comparable to 100k a short time ago.

This is only true if you stick with the same job for 10 years assuming 7% inflation and never get a raise. If you switch jobs the new job will keep up with inflation.

If anything deflation has gutted the average workers' relative pay check because existing wealth is being rewarded at the cost of wealth that could have existed in the future. If you increase productivity via automation or enact free trade a portion of your nation's workforce becomes redundant, that's not a bad thing if you can give these people a better job.

However, the core principle behind deflation (or rather low inflation) is that you won't give them such a job and instead you put these people into a "reserve pool of labor" hoping that one day an employment opportunity will present itself to them. This ignores that it may take a long time to find such a job and it is entirely possible that they won't be able to work by the time such a job exists.

Here is an attempt at an intuitive explanation: When you issue money you are creating work, if the economy cannot keep up with the newly created work then it will have to shrink the average order size by the relative percentage of work that could not be done. Therefore the inflation rate is a measure of demand exceeding supply. Stagflation is what happens when an external factor prevents supply from catching up to demand.

Let's assume we have an economy that can produce 10 pizzas per day. 10 people each spend $10 per day on one pizza. You double productivity via automation. Only 5 people need to work to make 10 pizzas thus the price of pizzas drops to $5. 5 people now buy two pizzas. However, there are 5 unemployed people who receive no income. The government gives these 5 people $10 and they buy two pizzas as well. Here is the problem, we still have 10 pizzas but 20 pizzas are being ordered. By issuing money we have created more work to do but the economy cannot sustain this much work. The price for pizza rises back to $10, thus the average order size shrinks back to 1 pizza per person. However, there is now an arbitrage opportunity. It costs $50 to make 10 pizzas, because customers are paying $100 in total for 10 pizzas you could earn $200 for 20 pizzas if you employ all 10 workers and the pizza shop can afford to pay $20 for each worker. Therefore a 2x increase in productivity led to a 2x increase in income but prices stayed the same.

The problem with deflation becomes obvious. There is no need to increase productivity yourself because your real wealth will grow through the productivity increases of other people. If enough people think this way there won't be any productivity increases at all. The economy doesn't grow but the purchasing power of the wealthy grows because they hold onto cash which means they simply get a bigger portion of a stagnant economy.

When you put this into perspective with the Weimar Republic then it becomes obvious why hyperinflation happened. The victors of WW1 demanded reparations paid in a foreign currency. The Weimar Republic's economy was destroyed by the war. The amount of work being demanded of the Weimar Republic exceeded the capacity of the economy significantly. By printing money the government demands the population to work for the sake of paying the reparations. The average order size of the citizens (the goods they can purchase) has to go down significantly to make room for the reparations. The obvious solution isn't to conduct austerity and suck it up, it's to first rebuild the economy so that it can later service its reparations obligations. Americans learned this lesson after WW2 and created the Marshallplan for this purpose.

I hope the way software companies make money in the future will change. New taxation will level the field of internet companies with traditional companies, especially those "user as product" companies, they will need to pay additional tax and their profit margin will decrease.

Maybe this is why the job of YouTube influencer is so popular among younger generations, they see where automation will take us.

The way the economy is structured, i.e. a consumer economy in a "democracy" that trend can't sustain in the long run. If the fruits of economic production increasingly become centralised in fewer and fewer hands then eventually either people will clamor for their slice of the pie, resulting in re-distribution via taxes and social programs like UBI or the system will collapse from insufficient consumption. Also your comment assumes things like AI, driverless tech and so on are going to be readily available in the near future.

Evidence suggests the contrary. I bet there will not be widespread driverless taxis even two decades from now. Even if it is possible to create a toy demostration like Waymo has done it is far from clear that such a model is economically feasible. I.e. for a very long time it will be cheaper to hire a person to drive a car than to program and build a car to drive itself after accounting for remote supervision, maintenace, cleaning cost.

Despite all the talk of automation in industry not much has happened in many industries because it is still cheaper to pay somebody $15 an hour to do some manual task than to buy a 1.5 million dollar robot (those SWE salaries again) to do the same task especially considering it will need high paid engineers, operators, and technicians to install, run (supervise) and maintain it.

The way for tech to replace manual labor is for the wages of manual labor to go up and the price of tech to come down. If tech drives down low skill wages then it exerts a feedback effect limiting the adoption of tech.

> On the flip side, they would be free to pursue their passions and discover themselves, be that in art or artisanal pickles.

You're very optimistic

I mean that would be very cool indeed if we could see an OS similar to linux made in something other than C. I'd really like to see how things change in computing over the next coming decades if this becomes a trend.

The most secret of government agencies use Intel chips.

the article says they use these new chips as gpus and still use intel chips for the os?

Literally every post about CPUs on HN does...