The only thing the West is achieving here is that sooner or later China will be able to compete on their own terms rather than ours. It may buy some time but the end result is very predictable.
Edit:
And, that, my fellow keyboard high-minded thinker but powerless corp peons, was also part of the China's plan all along.
A friend of a friend is married to a member of the national academy of sciences in China. I heard at dinner a few years ago that he had been lobbying for more onshoring of chip production for years before the Nvidia restrictions, and always heard "you're right, maybe next year we'll be able to fund that". Then the restrictions came in and everything changed.
And, to the point I was responding to originally, we can check those documents! They don't speak of "annihilating" other countries' industrial capacities.
Why would they have to?
When China talked about their 5 and 10 year plans on solar panels there was no need to talk about putting the rest of the competitors out of business. That was a highly probable end goal of what they were doing, no need to state it.
It would be like Walmart stating "We're going to put out massive loss leaders in sporting goods to put X out of business". Instead they'll talk about growing market share and long term customer loyalty.
More of, China is smart enough to use the benefits of both capitalism and authoritarianism to grow their country while western governments are busy stealing the furniture and fixtures off the walls.
Of course they're trying to take care of themselves while the US implodes, how can you blame them for that? The whole world has a serious oil problem right now, because of US actions, and of course each country is dealing with it in their own way. Why is that a problem?
"Problem" is a relative term for those dealing with the consequences of it. It is one if you are America means a whole lot less economic freedom than you had in the past. If this is a good thing or not depends on your position.
If you're fired up by nationalism but your nation is sucking, getting mad at the Chinese isn't the answer. And that's before we even get into relative levels of activism, Chinese political ideology is much more biased towards "neutral, just trade" than American politics.
Near as I can tell, they fundamentally believe that the US actually can’t do better (despite protestations to the contrary), at least not with them there doing there thing, which is why they get so manipulative and shitty. They are unwilling to make other decisions than the ones leading to these outcomes.
Yes people, it is actually possible to do better. It requires making better choices, however.
It's a possibility. It is also possible that they will steal yesterday's technology and still pretend to have moral high ground.
I do not wish China and Chinees wrong but most probably communism will work as it always do - by faking thing and bringing self-harm to their own citizens.
Which incentivizes pretending you need a ton, and can give nothing. You think being useful at work in Capitalism is bad? Wait until you are accidentally useful in a communist/socialist economy.
There is usually less pretending under capitalism, but people are people, so it all the same stories still play out.
People are shitty, if given the chance and influenced in specific ways. Capitalism or not. We’re dealing with the current bullshit in the west because somehow people bought the line that everyone is a good person - and we totally can’t actually see or do anything if we see someone doing something bad! - and we need to always follow ‘the rules’ even when someone bad clearly isn’t.
Until we find our balls, good luck.
This is all nonsense. Capitalism isn't an ideology, it's just a slight formalisation of what naturally arises. People are free to choose; they can own things; they can make agreements; they must honour the agreements or pay a penalty. Capitalism in no way is about stealing.
> Capitalism isn't an ideology
Next you'll be telling me fairy tales like "laws are real".
Western sanctions have succeeded in achieving China's self-sufficiency goals where their own government failed.
And it’s not a given that they’ll catch up. I think it’s fair to say that their development of jet engines is on track to be obsolete before they’re competitive.
They may in principle have established the technologies to be self sustained but that’s only relevant and sustainable if they develop an economy based on domestic consumption rather than exports. Which they are struggling with as well.
Is this really true? Can't they just keep exporting "forever"? What requires them to find a domestic audience? I can think of some other countries that have done quite well mostly without finding a domestic audience (eg, Switzerland comes to mind, and frankly Europe might largely be in the same bucket).
And a teeny-tiny country like Switzerland can't be usefully compared to something as big as China - the rest of the world can easily consume whatever the Swiss produce, but there are limits to how much Chinese can produce until consumption will have to shift to domestic consumption because the world doesn't have infinite ability to pay for its demand.
That said don't expect any big change anytime soon - there are very strong political incentives to keep the status quo with China focusing a bit too much on exports.
i dont think it will - they still have a chokehold on battery production (which implies dominance in the EV sector), and they also control the vast majority of all rare earths. The chinese gov't can subsidize chip research/development with these other sectors that are dominating.
The west is the one that need to watch out for their own economic dividend running out from the past century.
but... not the western govs
The Chinese domestic EV market is the largest in the world.
Chinese factories are full of Chinese robotics.
Companies like Huawei are struggling to meet the domestic demand for AI accelerators, while growing volume very fast year over year.
The Chinese domestic AI market is massive, but we just don't hear much about it outside of the models that are also sold here. Can you even name the models that ByteDance (China's Meta) makes?
As far as exports go, China is a low cost producer for many things. If the US doesn't want to buy high quality EV's costing 1/2 the price of a Tesla, then there are plenty of other countries happy to do so. The US is only 5% of the global population - there are lots of other consumers out there.
Over the last 20 years the economy has become dysfunctional. It no longer really resembles a free market; monopolies have established barriers to entry everywhere. And the biggest investors are awash with helicopter money that's been doled out for favors by the political class.
So those investors have tons of cash to burn and surprisingly few opportunities. Even within Silicon Valley/VC there are surprisingly few who seem to really understand the fundamental economics of software. Or perhaps those economics just aren't that important when you have billions of dollars on hand and cash is obviously not going to get you a return. Any whisper of possible exponential growth is worth throwing money at. Crypto? Why not. AI? Why not. Datacenters? Why not. Tulips? Why not.
This is by all definitions an empire in decline. Everything is broken or fake. Everyone is afraid to do what needs to be done. Power forbids it. So we're all just waiting for the other shoe to drop. Our secret police aren't as bad as the late stage USSR's yet, but hold Uncle Sam's beer...
(That's not a recommendation to try and time the nadir, by the way, as it could easily be 50 years away.)
Overfinancialisation of the economy while removing safeguards to keep markets functional, like anti-trust enforcement, are the main forces behind this erosion. Through finance the focus of companies is completely shifted away from producing good products and services, and into how to extract more paper wealth from existing structures to the detriment of products.
Not enforcing anti-trust and letting behemoths to form which cannot be competed against since with their amount of capital they can either buy their competition outright or just price dump for long enough to make competition non-viable.
It's the failure of neoliberalism, and that agenda has been pushed into Western countries since the 1980s-1990s, it made enormous wealth for the few at the top while eroding whole societies, economically and socially, it's all dysfunctional.
Comparing this to crypto or turnips makes me doubt the merit of any other opinions your comment offers.
Just to give some rough numbers in the past 5 years the amount of GPU compute installed in FLOPS is somewhere over 5 times all the CPU flops that have ever existed.
This has nothing to do with AI being good or bad or being able to produce things and economic value. It is by far the largest and fastest growth of any technology ever and we have zero clue about the economic stability of this grand experiment we're performing.
Some differences to the market at that time seems to be that during the dotcom bubble, many of the companies had little to no revenue.
Leading AI labs already generate enormous revenue. The investments into capacity are needed to address the current demand.
The situation seems somewhat less speculative.
That said, I cannot predict how AI capabilities will develop and how demand will respond.
Should capabilities plateau hard and soon, maybe the demand will not be there for the compute investments.
If it does not, and instead AI applications in robotics, science, and self driving expand, chances seem reasonably good that the demand will be there, no?
And as for the economic stability, much of the investment comes from existing giants like Microsoft, Alphabet, Amazon, and Meta, who have the necessary cash flow.
These companies are less likely to collapse than some of the ones during the dotcom bubble.
It's the total amount of money in the economy that's been invested toward a potential outcome. AI represents the largest amount of money, and largest fractional part of the economy invested ever.
Because of this AI could be the biggest economic boon ever, yet still not recover the full amount invested. This will have deep economic impacts that affect everyone and everything. At this point AI must achieve all its stated economic impacts or there will still be a huge economic crash that kills off any company that is over invested and cannot make a profit.
Worse, the many of the perceived economic impacts of AI are not for humans like you or I, but the huge companies you listed. Even if they economically win, everyone else made out of meat could still lose.
They say history doesn't repeat, but it does rhyme. This, at least to me, sounds like a mixtape of "internet" + "tulips" + "1920s financial world leading to global political instability".
Every potential outcome I see occurring pushes us closer to further instability, even if the economics on it work out on paper.
I had a look at the numbers.
The investment into data centers is estimated around $800B/year currently.
OpenAI + Anthropic combined had ARR of >$100B in July.
Global labor income is around $65T/year, the US GDP $32T, the global one $126T.
Global software spending: $1.4T/year.
I am no financial analyst, but I don't think all the stated AI impacts have to be met just to recover the investments.
A 1% productivity gain on global labor income represents $660B/year. At 5% we would look at $3.3T/year.
They don't need to cure cancer to justify the investment, even though Amodei hopes to cure most major disease in the next 5-10 years.
>Global software spending: $1.4T/year.
Out of this number how much of this goes to payroll that goes to humans versus how much of this goes to non-human infrastructure costs. The numbers suggest this is anywhere from 60 to 90%, with 70% being a reasonable average figure. Just under a trillion dollars paid directly to humans would disappear if AI somehow captured all of this market.
Moreso the AI industry needs to capture these gains very fast or they will be crushed by interest payments on the massive debts they've accrued.
>ven though Amodei hopes to cure most major disease in the next 5-10 years
The average development time for medicine is 10 to 15 years before a single dollar is earned from said medicine. AI will shave very little off that as human testing and our stupidly complex bodies introduce all kinds of problems. Furthermore running head long into blindly using AI medicine is how you produce X risks from super intelligence AI.
The speed at which AI has to develop in which to get profitability is the biggest risk, a potentially catastrophic risk at that.
The reality is that so far there has been no sign of GDP growth picking up. It is basically flat at 2.5% +/- over the last few years.
In a similar vein one might have expected that the internet (think of all the e-commerce and efficiencies!) might have shifted GDP growth into a higher gear, but it did not, although in that case there was at least a significant boost in the 1996-2000 "dot com" era when the build out was happening (then to be followed by the crash and all the unused dark fiber etc).
So, maybe the hoped-for AI boom will be just as much of a dud (as it appears to be so far) as the internet boom. New day, different tools, same growth.
It's perhaps odd that we're not even seeing datacenter/etc build out register on GDP, but perhaps the scale of it is not as large as the internet build out?
That's 0.6%. Subtract last year's investment and then we're talking yearly growth.
Turns out it's not the earth shattering capital investment the comment before mine was making it out to be.
And about productivity gains, AI became good at software development in spring this year.
I'm not sure what productivity miracles reflecting in GDP growth you already expect to see by now.
In the past 5 years 5 times as much GPU compute capacity has been installed as total CPU capacity that has ever existed. When it comes to capital intensity the growth of AI has been one of, if not the largest capital expenditure for a class of project in this short of time frame. Things like the Manhattan project which was absolutely monstrous expense at the time is dwarfed by this.
Of course measuring GDP growth is difficult when you have an idiot in chief trying to destroy the global economy with the dumbest set of actions contrived by a human ever. Disentangling this factors will take a lot of work on someones part.
As someone who is myself 'old af' by tech standards (I'll be 53 very soon) the main problem is that the policymakers are all 70+ years old.
Their concept of what China even is is forever stuck in pre-2004 thinking from back when they still had significant neuroplasticity.
Vote these fucking fossils out, kids, before it is entirely too late.
(And, yeah, before someone inevitably brings it up, some exceptions-that-prove-the-rule older policymakers/politicians do avoid this trap of getting stuck in the past, but most don't)
Whereas China is developing a powerful network of rapidly developing trading partners like Africa and the Middle East?