Reader Response to "AI Overinvestment" (mbi-deepdives.com)

I mean it remains to be seen that the demand cant be satisfied by local AI.

Qwen + Your Laptop + 3 years is more interesting to me than offloading AI to some hyperscale datacenter. Yes efficiency gains can work for both, but theres a certain level below which you may as well just run the app on your own silicon. AI might not eventually meet the threshold for "apps on tap" if every user with an i7 and 32GB ram is ably served locally.

The question that really matters: is the net present value of each $1 investment in AI Capex > $1 (+ some spread for borrowing costs & risk).

We'll be inference token constrained indefinitely: i.e. inference tokens supply will never exceed demand, it's just that the $/token may not be able to pay back the capital investment.

Even if energy needs inevitably come down these guys will continue to force energy use purely driven by financial obligations. It’s the dumbest thing since subprime. We’re already seeing shades of this with Nvidia. They’re giving away their GPUs in exchange for paper to keep people on this path. But energy is not free. It’s finite.

When people talk about AGI, are they talking about LLMs that will be very good? What does achieving AGI mean?

It's basically a Ponzi now. They simply profit on new investments. It's just no investor realizes he's the last one until it's too later.

> demand for tokens/AI inference capacity exceeds CURRENT supply

That's not at all obvious to me; costs as a consumer are going down, rather than up. Can someone steel-man this guy's argument for me?

This is all talking about the big companies investing in AI as a service to sell to others. The whole financial aspect of all the articles is focused on investing in a service to sell?

But the moment that the AI can exceed a human programmer, at something as narrow as coding, then the company that has that AI shouldn't sell it to replace humans at other companies - it should instead use it to write programs to replace the other companies.

And the moment an AI can exceed a human generally, then the company that has that AI shouldn't sell it to replace humans at other companies - it should instead ask it how to dominate the world and replace all other companies (with side quest to ensure no competitor achieves AGI)?

We wont get to AGI if we dont get models with both larger context and dreaming (aka distilling important parts from their 'day long' context and adding those to their neural net) with about the same effort/cost as inference. LLM models cannot do this and wont be able to, so if no one comes up with a better model, AGI cannot be reached, no matter what amounts are invested, so we will get an AI winter. So many smart minds are on this now, that if anyone had an idea how to 'learn during inference', someone would have released something. No one has a clue, so I am betting the downfall will come soon. Still, we got incredible progress from this AI boom, so it is not bad, just money slushing.