I read this with interest, but without much ability to think for myself about what’s next. I am aware that enormous amounts of money circulate in the modern world, but it’s out of my reach; my idea of how to raise money would be to open a Patreon account.
Nonetheless, what do we have to work with? We have the AI 2027 scenario. We have the trade war, which may yet evolve into a division of the world into currency zones. Vladimir Nesov is keeping track of how much compute is needed to keep scaling, how much is available, and how much it costs. Remmelt has been telling us to prepare for an AI crash, even before the tariffs. We should also remember that China is a player. It would be wacky if the American ability to keep scaling collapsed so completely that China was the only remaining player with the ability to reach superintelligence; or if both countries were hobbled by economic crisis; but that doesn’t seem very likely. What seems more likely is that the risk of losing the AI race would be enough for both countries to use state financial resources, to keep going if private enterprise no longer had the means.
Your idea is that AI companies have the valuations they do, not because investors want to create world-transforming superintelligence per se, but because investors think these companies have the potential to become profitable tech giants like Google, Facebook, or Microsoft; and if money gets tight, investors will demand that they start turning a profit, which means they’ll have to focus on making products rather than on scaling and pure research, which will slow down the timeline to superintelligence.
It makes sense as a scenario. But I find it interesting that (in the opinion of many), one of the tech giants recently got to the front of the race—I’m talking about Google with Gemini 2.5. Or at least, it is sharing the lead, now that OpenAI has released o3, which seems to have roughly similar capabilities. This seems to undermine the dichotomy between frontier AI companies forging ahead on VC money, and tech giants offering products and services that actually turn a profit, since it reminds us that frontier AI work can prosper, even inside the tech giants.
If there is a scaling winter brought on by a bear market, it may be that the model of frontier AI companies living on VC money dies, and that frontier AI survives only within profitable tech giants, or with state backing. In a comment to Remmelt I suggested that Google and xAI have enough money to survive on their own terms, and OpenAI and Anthropic have potential big brothers in the form of Microsoft and Amazon respectively. China has a similar division between big old Internet companies and “AI 2.0” startups that they invest in, so an analogous shakeup there is conceivable.
It occurs to me that if there is an AI slowdown because all the frontier AI startups have to submit themselves to profit-making Internet giants, it will also give the advocates of an AI pause a moment to reenter the scene and push for e.g. an American-Chinese agreement similar to the slow timeline in “AI 2027”. American and Chinese agreement on anything might seem far away now, but things can change quickly, especially if the dust settles from the trade war and both countries have arrived at a new economic strategy and equilibrium.
I still feel like such changes don’t affect the trajectory much; no matter what the economic and political circumstances, a world that had o3-level AI in it is only a few more steps away from superintelligence, it seems to me (and getting there by further brute scaling is just the dumbest way to do it, I’m sure there are enormous untapped latent capabilities within the hardware and software that we already have). But it’s good to be able to think about the nuances of the situation, so thanks for your contribution.
I read this with interest, but without much ability to think for myself about what’s next. I am aware that enormous amounts of money circulate in the modern world, but it’s out of my reach; my idea of how to raise money would be to open a Patreon account.
Nonetheless, what do we have to work with? We have the AI 2027 scenario. We have the trade war, which may yet evolve into a division of the world into currency zones. Vladimir Nesov is keeping track of how much compute is needed to keep scaling, how much is available, and how much it costs. Remmelt has been telling us to prepare for an AI crash, even before the tariffs. We should also remember that China is a player. It would be wacky if the American ability to keep scaling collapsed so completely that China was the only remaining player with the ability to reach superintelligence; or if both countries were hobbled by economic crisis; but that doesn’t seem very likely. What seems more likely is that the risk of losing the AI race would be enough for both countries to use state financial resources, to keep going if private enterprise no longer had the means.
Your idea is that AI companies have the valuations they do, not because investors want to create world-transforming superintelligence per se, but because investors think these companies have the potential to become profitable tech giants like Google, Facebook, or Microsoft; and if money gets tight, investors will demand that they start turning a profit, which means they’ll have to focus on making products rather than on scaling and pure research, which will slow down the timeline to superintelligence.
It makes sense as a scenario. But I find it interesting that (in the opinion of many), one of the tech giants recently got to the front of the race—I’m talking about Google with Gemini 2.5. Or at least, it is sharing the lead, now that OpenAI has released o3, which seems to have roughly similar capabilities. This seems to undermine the dichotomy between frontier AI companies forging ahead on VC money, and tech giants offering products and services that actually turn a profit, since it reminds us that frontier AI work can prosper, even inside the tech giants.
If there is a scaling winter brought on by a bear market, it may be that the model of frontier AI companies living on VC money dies, and that frontier AI survives only within profitable tech giants, or with state backing. In a comment to Remmelt I suggested that Google and xAI have enough money to survive on their own terms, and OpenAI and Anthropic have potential big brothers in the form of Microsoft and Amazon respectively. China has a similar division between big old Internet companies and “AI 2.0” startups that they invest in, so an analogous shakeup there is conceivable.
It occurs to me that if there is an AI slowdown because all the frontier AI startups have to submit themselves to profit-making Internet giants, it will also give the advocates of an AI pause a moment to reenter the scene and push for e.g. an American-Chinese agreement similar to the slow timeline in “AI 2027”. American and Chinese agreement on anything might seem far away now, but things can change quickly, especially if the dust settles from the trade war and both countries have arrived at a new economic strategy and equilibrium.
I still feel like such changes don’t affect the trajectory much; no matter what the economic and political circumstances, a world that had o3-level AI in it is only a few more steps away from superintelligence, it seems to me (and getting there by further brute scaling is just the dumbest way to do it, I’m sure there are enormous untapped latent capabilities within the hardware and software that we already have). But it’s good to be able to think about the nuances of the situation, so thanks for your contribution.