This is not a response per se, but an expression of displeasure. A few companies decided it was appropriate to gamble a significant fraction of the GDP on behalf of everyone—without anyone’s permission. And now we are all locked into an economic gambit with no offramp. We either dedicate everything to making this work or we are all living in the hellish aftermath of a hideously large bubble bursting. It’s as if we conjured the economic equivalent of Roko’s Basilisk into being.
To answer the question posed, X is between 0 and 1.
Why do I believe this? Because if companies are already resorting to financial engineering in order to buy themselves a little more time to find PMF, then they have already resorted to extraordinary measures. Which means they have run out of alternatives. Which means we are not in an early stage of the bubble.
I am willing to bet you at 5:1 odds in your favour that OpenAI does not lose more than 50% of its valuation within 1 year from today for up to $1000 of my own money.
I agree with Eliezer’s point here that the AI bubble could pop without a recession under a competent Fed: https://xcancel.com/ESYudkowsky/status/1971311526767476760#m, and I think Jerome Powell is likely competent enough to handle this (less certain about potential successors).
That tweet doesn’t sound right to me. Or at least, to me there’s a simpler and more direct explanation of bubbles in terms of real resources, without having to mention money supply or central banks at all.
During a bubble, people are having fun because resources are being misallocated: misallocated to their fun. Some rich chumps are throwing their resources at something useless, like buying tulips. That bankrolls the good times for everyone else: the tulip-growers, the hairdressers that serve the tulip-growers and so on. But at some point the rich chumps realize that tulips aren’t that great, and that they burned their resources just to make a big bonfire and make everyone warm for awhile. When they realize that, the tulip growers will lose their jobs, and then the hairdressers who served them and so on. That’s the pain of the bubble ending, and it’s unavoidable, central bank or no.
This is not a response per se, but an expression of displeasure. A few companies decided it was appropriate to gamble a significant fraction of the GDP on behalf of everyone—without anyone’s permission. And now we are all locked into an economic gambit with no offramp. We either dedicate everything to making this work or we are all living in the hellish aftermath of a hideously large bubble bursting. It’s as if we conjured the economic equivalent of Roko’s Basilisk into being.
To answer the question posed, X is between 0 and 1.
Why do I believe this? Because if companies are already resorting to financial engineering in order to buy themselves a little more time to find PMF, then they have already resorted to extraordinary measures. Which means they have run out of alternatives. Which means we are not in an early stage of the bubble.
I am willing to bet you at 5:1 odds in your favour that OpenAI does not lose more than 50% of its valuation within 1 year from today for up to $1000 of my own money.
I agree with Eliezer’s point here that the AI bubble could pop without a recession under a competent Fed: https://xcancel.com/ESYudkowsky/status/1971311526767476760#m, and I think Jerome Powell is likely competent enough to handle this (less certain about potential successors).
That tweet doesn’t sound right to me. Or at least, to me there’s a simpler and more direct explanation of bubbles in terms of real resources, without having to mention money supply or central banks at all.
During a bubble, people are having fun because resources are being misallocated: misallocated to their fun. Some rich chumps are throwing their resources at something useless, like buying tulips. That bankrolls the good times for everyone else: the tulip-growers, the hairdressers that serve the tulip-growers and so on. But at some point the rich chumps realize that tulips aren’t that great, and that they burned their resources just to make a big bonfire and make everyone warm for awhile. When they realize that, the tulip growers will lose their jobs, and then the hairdressers who served them and so on. That’s the pain of the bubble ending, and it’s unavoidable, central bank or no.