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Comment by mrloopex | Hacker News Reader

Don’t forget there is a constant pressure for everyone to have an opinion on how this is going to end while hoping it ends tomorrow so they can be vindicated. The dotcom bust took a decade to grow and collapse. I think it is too early to make predictions with AI. I mean the sentiment here is either it will dry up the world and kill us all or transcend humanity, there’s no gray area. I don’t want to fall into the emotional sieve that seems to drive everything.

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That's the financial stakes here. That's why it's all or nothing. You're spending on a level that is only justified by the bonafide machine god being ushered into existence, not productivity or coding tools (and on relatively short time horizon). So if this doesn't change the near term trajectory of humanity to a parabolic move upward there is going to be a lot of economic pain. It's not just the spending, it's that the expectations for the returns to justify them are in a relatively short period of time.

What’s your reasoning for saying that the spending level requires that level of justification?

I think these large numbers are casually thrown about, but the real meaning is mind boggling. 1 trillion dollars is the entire US defense budget - aircraft carriers, nuclear submarines, health care, salaries, stealth fighters ect. The hidden AI debt alone is more than that https://asia.nikkei.com/business/technology/five-us-tech-gia... just for five tech giants (not to mention all the other smaller players like neoclouds)

By that measure it doesn’t sound like that much.

You’re talking about about an amount that is a 13% of the total US government spending, of which is 20% of the entire US GDP.

I’m not saying it’s insignificant but it’s only a few percent of the US GDP and it represents spending over several years.

I mean that's so far, it continues to grow exponentially larger with each quarter. The debt issuance for the first half looks to be crowding out US treasuries in the bond market - https://www.bloomberg.com/news/newsletters/2026-07-23/ai-deb... - that's an extremely large amount of debt. And it's still getting larger and larger each quarter.

I would question the idea that highly industry consolidated debt is competing with risk free debt issued by the US government. Those are two very different products.

And while the quarter by quarter growth may seem astonishing it very different saying “debt levels today are alarming” versus “if this trend continues debt levels will be alarming”

So the disclosed balance sheet debt is 1.35 trillion and then the off-balance sheet debt is 1.65 trillion for a total of 3 trillion in AI debt for the 5 tech giants so far. It's multiplying every quarter and they've set investors expectations to be that this is never ending basically. But the tech giants aren't the only people spending themselves into massive debt, think of the CoreWeaves and the Nebius and the hundreds of other smaller companies. And the expectation is that there will be a near term return on all this with a healthy profit. Those five tech giants are just the tip of the iceberg in terms of the amount of debt.

While the debt numbers might look large, don't forget how much revenue is coming into these companies as well.

OpenAI gross revenue was $4B in 2024, $13B in 2025 and estimated to hit $26B in 2026. Revenue is doubling or more.

Same with Anthropic. $1B in 2024, $9B in 2025 and estimated to be $47B in 2026.

All the AI companies together are pulling in hundreds of billions of dollars per year in revenue and it's going up quickly. To me, taking on trillions in debt in order to make hundreds of billions in revenue doesn't seem crazy.

Yeah this is going to be north of 10 trillion by the end, I would wild-ass-guess. Inflation adjusted it's larger than the manhattan project, apollo program, works progress administration, hell, it's on par with the cold war era military buildout, or a baby world war.

1T is big in the absolute sense, but that's simply the scale these big tech companies operate at. Go back to 2024 or 2025 and you'll see as a group they are making a net income of $400B+. The scale at which these companies do anything is just staggering.

Good that you made the comparison with defense budget because it's becoming evident that AI is the new "nuclear bomb". First, if you have more advanced AI than your opponent, you just hack them and the war is over before it began. I'm simplifying obviously, but the point that AI is essential to modern warfare stands. Second, even during peacetime, you can use AI to directly influence what people think, what they do, etc. in the most literal sense of this expression. We already know that people outsource thinking, relationships, and cultural expression to LLMs, and even if that wasn't the case, you can use AI to deliver to each single person hand-crafted propaganda, not to mention the previously unimaginable opportunities to spy on people.

It would be strange if the race to wield this power wouldn't result in AI getting pumped to the moon, way beyond anything that seems reasonable.

That could all be true, but the problem is however powerful it is, it still needs to make money for the people who invested in it who are expecting a return. The stock valuations, the bonds yields - they don't care about the power of a nuclear bomb. They want to get paid. They expect to get paid. And if they don't get what they are expecting, there will be hell to pay in the economy. There's a probably a good reason the power of nuclear weapons isn't an ETF I could buy into.

No, if you have god-like powers via super-powerful AI, you don't need money.

After all, at the end of the day, money is just a tool to motivate people. If you have other ways to motivate them (manipulation via AI, or just a brute force facilitated via AI), you don't need money any more. You just have to make sure there is nobody else with access to such AI.

Most people mean this to say that 1 trillion is a lot of money, but it still comes back to what you believe AI is- in hindsight, does 1 trillion dollars to build the internet sound like a lot or a little? (That is, spending 1 year of USA's defense budget to get the entire internet)

It comes back to your perception of what AI is because to people who say AI is glorified auto-complete won't believe that the money is worth it.

The AGI-pilled true believers who say it will end all money and result in a post-scarcity world believe literally any amount is justifiable.

Most people, me included, land somewhere in the middle- it seems like AI is a humanity-level sea change in technology and how computers work and serve us. It seems plausible that a few trillion is a reasonable amount.

I'm not going to make a prediction of what will happen with AI whether it will autocomplete / productivity or AGI. I will say it seems to be trending towards former than the latter just by how scaled down the promises have become over the last year (we went from curing all disease and cancer / post-scarcity to productivity and code.) The amounts being spent on this can only really justified by some paradigm shifting returns and within the timeframe investors expect. This isn't something like Apollo / Manhattan project - those were taken on by the government with public money. This is explicitly a profit making enterprise funded by markets.

I have personal experience using it at work so I come down on the “it’ll be a big productivity boost” side rather than Deep Thought. At my job we are still evaluating ROI so it is mandated we all use it to help us, via copilot. For example I recently did a code port that one team said would take a month and sonnet did it for 18000 tokens in a seven hours. Thats 180.00$ vs tens of thousands. Thats a huge productivity boost. Now with the rise of token cost the question is about ROI for my company. What bothers me the most are the hidden costs to the environment that my company does not factor into the equation. From that perspective it seems more than a profit making exercise but I can’t help wonder if it could be done cheaper, and really is an over inflated circle jerk to mint a million new billionaires. It’s like if Martin Shkrelli discovered fire. A great product from an absolute scum bag.

> Most people mean this to say that 1 trillion is a lot of money, but it still comes back to what you believe AI is- in hindsight, does 1 trillion dollars to build the internet sound like a lot or a little?

You are talking about the Value of AI, but the key is the Revenue of AI.

If AI companies cannot get the Revenue to pay for all those investments, somebody is going bankrupt.

A trillion is a lot of money to cover.

> if this doesn't change the near term trajectory of humanity to a parabolic move upward there is going to be a lot of economic pain

"trajectory of humanity to a parabolic move upward" is poorly defined here. Whether we are headed to a machine god ruled scenario or "just" incredibly powerful productivity tools, there will be a lot of economic pain for some (most) and a lot of economic gain for a few.

I've yet to a see an LLM/agent-based business plan in where scaling with an order fewer workers than before LLMs is not a central part of the value proposition.

such a business plan has not yet created economic value, being able to roll out features at rocket speed is not a huge determinant of a startup's success.

> such a business plan has not yet created economic value, being able to roll out features at rocket speed is not a huge determinant of a startup's success.

Speed of feature implementation isn't the objective. High feature throughput with labor cost reduction is.

We’re still spending less as a percent of GDP on the AI datacenter buildout than was spent on building the railroads in the 1880s (Morgan Stanley estimates 2.5% of GDP will be spent on AI this year, as compared to 6% for railroads)

Nobody expected a machine god from Union Pacific

What’s weird is how emotional people get on this. I told publicly (because I was asked, not out of an obligation to have an opinion), that the prices we pay for LLMs are likely to go up because that’s what happens when the ratio of operational assets to foreign capital drops due to the capital having been turned into heat rather than operational assets. The grief I got from people, dear Lord…

I think that opinion is as reasonable as any. I feel compelled to argue against it (I even thought out the arguments in my head!) but my compulsion to have an opinion on HN is a disease, and you made a point of saying that you gave the opinion because asked.

I feel obliged to step in here to say there is a grey area where these are useful tools for some applications but not on the path to AGI.

Unfortunately the hype machine has far outstripped their capabilities so far, and the amount of money spent doesn’t look like being recouped, so somebody is going to lose money, as people lost money on the overpriced spacex ipo (overpriced because of AI).

> The dotcom bust took a decade to grow and collapse

I'm inclined to think the collapse has already started but nobody wants to see it yet.

In the last few weeks SP500 is down, kospi is down, nikkei is down, US inflation is still high and growth is softer than expected. Hyper inflated stocks (Tesla, Nvidia, SpaceX) are deflating. US bonds are at a 20 year high.

Interesting times ahead.

> there is a constant pressure for everyone to have an opinion on how this is going to end while hoping it ends tomorrow so they can be vindicated

In what bubble does this pressure exist?

How do you stay out of it all, if at all?

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