How Much Did AI Spending Boost 2025 First-Half GDP?

AI spending on computers and software is soaring.

Real means inflation-adjusted and that’s what matters to GDP.

Real Software and Computer Spending

  • For 2025 Q1, software spending rose 4.1 percent.
  • For 2025 Q2, software spending rose 5.9 percent.
  • For 2025 Q1, computers and peripheral equipment spending rose 22.0 percent.
  • For 2025 Q2, computers and peripheral equipment spending rose 13.0 percent.

Big Tech’s $400 Billion AI Spending Spree

On July 31, the Wall Street Journal commented on Big Tech’s $400 Billion AI Spending Spree

The AI arms race is accelerating as the major tech companies add to their already gargantuan levels of spending. The bets are paying off for investors, but not for all employees.

Alphabet’s Google, Microsoft, Amazon AMZN, and Meta Platforms are set to spend nearly $400 billion this year on capital expenditures, largely to build their artificial-intelligence infrastructure. That is more than the European Union spent on defense last year.

Those firms and others plan to boost outlays even more. Morgan Stanley projects $2.9 trillion in spending from 2025 to 2028 on chips, servers and data-center infrastructure. The investments, the bank says, will contribute as much as 0.5% of U.S. gross domestic product growth this year and next.

Those numbers do not count data center construction spending.

Unfortunately, I cannot break out data centers because the BEA lumps data center construction into office construction.

Importantly, the preceding chart is nominal spending. It’s real spending that matters and costs have skyrocketed.

Also, percentage growth looks phenomenal but we need to put things in proper perspective.

Real Private Nonresidential Fixed Investment Detail

Change in Fixed Investments from 2024 Q4 to 2025 Q1

  • Nonresidential: 88 Billion
  • Software: 32 Billion
  • Computers and Peripherals: 39 Billion
  • Nonresidential Structures: -4 Billion

If we attribute the change in software, computers and peripherals to AI, then AI provided ~71 billion of the 88 billion change from the fourth quarter to the first quarter.

That’s about 80.7 percent of nonresidential investment. I will circle back to this percentage later in this post.

Attributing the entire software, computers and peripherals change to AI could be a mistake in either direction.

For example, if spending was negative excluding AI, then the AI contribution is understated. However, if spending was positive without AI, the the AI contribution is overstated.

There is no way to break this out. Also, software could be different than computers and peripherals, with balancing errors.

Change in Fixed Investments from 2025 Q1 to 2025 Q2

  • Nonresidential: 50 Billion
  • Software: 48 Billion
  • Computers and Peripherals: 28 Billion
  • Nonresidential Structures: -15 Billion

Of the 50 billion change from the first quarter to the second quarter, AI provided ~76 billion.

That’s about 152 percent of nonresidential investment. Again, I will circle back to this percentage.

Without AI, nonresidential fixed investment would have contracted in Q2.

Total Construction Quarterly Average

Total Construction Quarterly Average 2024-2025

Important Construction Points

  • The scale is millions, not billions of dollars.
  • These are nominal numbers.
  • Total construction, private construction, private residential, and private manufacturing all peaked under Biden.
  • Private nonresidential and private residential are in sustained downtrends.
  • Public spending is in an uptrend. Fancy that.

I did not compute real numbers in the preceding two charts because the deflator is different for each one and for this post I am primarily interested in private office spending.

The main deflator for office construction is the Producer Price Index (PPI) by Industry, New Office Building Construction

Office Construction Quarterly Average

If you wish to take a stab at breaking out data center spending be my guest because the BEA doesn’t.

However, the chart suggests inflation-adjusted changes in data center construction are not huge.

Inflation Boosted Nominal Numbers

The above chart shows how much inflation has distorted various categories of nonresidential spending.

Note how much office construction costs have jumped.

Percentage Point Contributions to GDP

The above chart shows contributions to GDP for various categories for 2024-2025.

The chart is as of the preliminary (second) estimate of GDP for 2025 Q2.

Nonresidential investment added 1.36 percentage points to GDP in Q1 and 0.57 percentage points to Q2.

Let’s now use the percentages I calculated earlier that I said I would circle back to.

AI Contribution to GDP Calculations

  • 2025 Q1: AI provided 80.7 percent of 1.36 percent = 1.1 percentage points
  • 2025 Q2: AI provided 152.0 percent of 0.57 percent = 0.87 percentage points
  • Real GDP fell 0.5 percent in 2025 Q1. Without AI GDP would have fallen 1.6 percent.
  • Real GDP rose 3.3 percent in 2025 Q2. Without AI GDP would have risen 2.4 percent.

Grok Q&A 2025 Q2

Mish: How much would GDP have risen in 2025 Q2 without AI investment?

Grok 2025 Q2 AI Answer:

Grok Link: Estimating the GDP growth for Q2 2025 without AI investment requires isolating the contribution of AI-related capital expenditures from the reported GDP figures. Based on available data, the U.S. economy grew at a 3.3% annualized rate in Q2 2025, revised up from an initial estimate of 3.0%, partly driven by business investment in intellectual property, equipment, and infrastructure related to AI.

One analysis [Matthew Klein] suggests AI-related capital spending (e.g., data center construction, computers, and communications equipment) added approximately 0.2% to 0.3% to U.S. GDP in Q2 2025. If the capital expenditures of major tech companies (Amazon, Google, Meta, Microsoft, Oracle) were fully captured, GDP could be about 0.4% higher than reported, implying a total AI-related contribution of up to 0.6% when including unmeasured effects.

Another source estimates AI-related capital expenditures accounted for roughly one-third of Q2 GDP growth, which, given the 3.3% growth rate, suggests AI contributed about 1.1% to the annualized growth

Taking a conservative average of these estimates, AI-related investment likely contributed around 0.5% to 0.8% to the 3.3% GDP growth in Q2 2025. Subtracting this, GDP growth without AI investment would be approximately 2.5% to 2.8% annualized. This range accounts for the variability in estimates and the challenge of precisely isolating AI’s impact amidst other economic factors like consumer spending and trade fluctuations.

Note that these figures are estimates, as GDP calculations are complex and AI’s economic impact is not fully captured in official data due to measurement challenges. Additionally, tariff-related trade distortions in Q2 2025 complicate the picture, as a sharp decline in imports boosted GDP, potentially masking underlying weaknesses.

Mish: Which source came up with this: Another source estimates AI-related capital expenditures accounted for roughly one-third of Q2 GDP growth, which, given the 3.3% growth rate, suggests AI contributed about 1.1% to the annualized growth

Grok: The estimate that AI-related capital expenditures accounted for roughly one-third of Q2 2025 GDP growth, contributing about 1.1% to the 3.3% annualized growth, is derived from an analysis by Goldman Sachs, as cited in discussions on X and web sources. Specifically, their research on AI’s economic impact highlighted the significant role of tech sector investments in driving GDP growth for that quarter.

Matthew Klein estimated AI added 0.6 percentage points to GDP in 2025 Q2. I came up with 0.9 percentage points, and Goldman Sachs estimated 1.1 percentage points.

Grok Q&A 2025 Q1

Mish: How much would GDP have fallen in 2025 Q1 without AI investment?

Grok 2025 Q1 AI Answer:

To estimate how much GDP would have fallen in Q1 2025 without AI investment, we need to consider the reported GDP growth for that quarter and the estimated contribution of AI-related capital expenditures. According to available data, the U.S. economy contracted at a 0.5% annualized rate in Q1 2025, primarily due to a significant drop in imports and weak consumer spending amid tariff concerns.

One key source indicates that without AI-related data center investments, Q1 2025 GDP could have contracted by approximately 2.1%. This suggests that AI capital expenditures, particularly in data centers and related infrastructure, prevented a steeper decline, effectively contributing about 1.6% to GDP (i.e., the difference between the reported -0.5% and the hypothetical -2.1%).

Therefore, without AI investment, the GDP in Q1 2025 would likely have fallen by 2.1% annualized. This estimate is based on the analysis from Renaissance Macro Research, which highlighted the significant role of AI infrastructure spending in offsetting underlying economic weakness during the quarter.

Note that this figure is an estimate, as isolating AI’s precise impact is challenging due to other economic factors, such as trade distortions from tariffs and fluctuating consumer spending. Additionally, official GDP measurements may not fully capture all AI-related investments, which could affect the accuracy of this estimate.

Mish: Who is the key source?

The key source indicating that without AI-related data center investments, Q1 2025 GDP could have contracted by approximately 2.1% is Renaissance Macro Research, as cited in posts on X discussing the economic impact of AI infrastructure spending in that quarter.

Renaissance Macro estimated a contraction of 2.1 percent in Q1 without AI. I came up with a contraction of 1.6 percent.

These cross checks suggest my methodology is at least in the ballpark, if not sound.

I agree with Grok on this: “Note that these figures are estimates, as GDP calculations are complex and AI’s economic impact is not fully captured in official data due to measurement challenges. Additionally, tariff-related trade distortions in Q2 2025 complicate the picture, as a sharp decline in imports boosted GDP, potentially masking underlying weaknesses.”

For those using AI for Q&A, Grok gave much more detailed answers than Google AI.

2025 Q1 and Q2 Synopsis

  • Without AI, I estimate Q1 GDP at -1.6 percent, not -0.5 percent
  • Without AI, I estimate Q2 GDP at 2.4 percent, not 3.3 percent

The first half of 2025 would be barely growing.

Crediting Trump for this is similar to crediting Al Gore for the internet. But It’s happening on his watch, so he gets to claim it.

But it sure is masking other weakness.

A Word of Thanks

Pat Higgins at the Atlanta Fed, the creator of GDPNow pointed me to the data source for construction spending. He also provided comments on deflators.

What About 2025 Q3?

I intended to provide a look ahead at Q3 but I have spent about 9 hours on this already. That’s enough for now.

Here’s a teaser: AI contribution to 2025 Q3 GDP rates to be positive but much less than 2025 Q1 and Q2.

Second-Quarter 2025 Preliminary GDP

In case you missed it, please see Second-Quarter 2025 Preliminary GDP Revised Up to 3.3 Percent

The BEA revised GDP from 3.1% to 3.3% with spending from 1.4% to 1.6%.

Grok Addendum

Calculation Addendum

Attributing the entire software, computers and peripherals change to AI could be a mistake in either direction.

For example, if spending was negative excluding AI, then the AI contribution is understated. However, if spending was positive without AI, the the AI contribution is overstated.

There is no way to break this out. Also, software could be different than computers and peripherals, with balancing errors.

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Mish

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Maximus Minimus
Maximus Minimus
3 months ago

It is counter-productive to build data centers that consume gobs of energy just to give stupid answers to stupid questions, or create Joe Biden simulation to make him youthful and agile, or Trump speaking sense.
The real AI does molecular reaction simulation, or robots with visual capabilities. That does not need huge remote centers.

Don
Don
3 months ago

Well, since GDP doesn’t distinguish between spending on AI BS breaking more windows and cost effective productive activity actually adding to human consumption and better health, What’s the point? More binary machine code grift and graft to go along with phony vaccines?

Rogerroger
Rogerroger
3 months ago

39 percent of nividas 2 q sales went to two customers.

steve
steve
3 months ago

Excrement in, excrement out.

Jojo
Jojo
3 months ago

But it sure is masking other weakness.” along with “Here’s a teaser: AI contribution to 2025 Q3 GDP rates to be positive but much less than 2025 Q1 and Q2.”

So was the purpose of this write-up and the extracted quotes above? To make a case that lowering interest rates is the correct action by the FED?

Too often your posts drift away at the end instead of ending with a punch, such as this one.

It would be helpful were you to close your posts with some sort of wrap-up, prediction or call to action.

I’m back robbyrob
I’m back robbyrob
3 months ago

The student loan forgiveness tax bomb hidden in Trump’s ‘Big Beautiful Bill’Millions of federal student loan borrowers will see their forgiven debt taxed as income beginning in 2026
https://qz.com/student-loan-forgiveness-tax-bomb

alx west
alx west
4 months ago

funny how ZH always run posts about HOW MUCH ELECTRICITY THOSE CENTERS are using

it is like 19th century ! you know, ships tonnage, km of road rails , etc!

was not it supposed to be some kind of info revolution and LEVEL OF ELECTRICITY consumption to be down due to effectiveness?

alx west
alx west
4 months ago

GARBAGE IN , GARBAGE out! i mean gdp , spending and sh111it!

IT HAS not anything to do with/ average joe.

at some point USSR produced most of tanks in the world,
more than rest of world combined. we( and me) know how it ended

alx west
alx west
4 months ago

give me 10 year chart of new home sold in USA, and same for new cars!!
i got ones, it took me 2 clicks and 10 secs!
=======

in 2025 new car sales run 15.32 mil in june 2025 , same or less than in 2015 2016 17 18 19 years , before 2020!!

and new home sales run 600*700.000 per year, again level of 2016*2019

problem is ppl is bigger at least 10 % compared to those years

AND DEBT GREW $15 TRLN MORE !!!

USA economy is stuck in debt pit!!

alx west
alx west
4 months ago

GARBAGE IN , GARBAGE out! i mean gdp , spending and sh111it!

IT HAS not anything to do with/ average joe.

at some point USSR produced most of tanks in the world, more than rest of world combined. we( and me) know how it ended
=========

give me 10 year chart of new home sold in USA, and same for new cars!!

i got ones, it took me 2 clicks and 10 secs!

=======

in 2025 new car sales run 15.32 mil in june 2025 , same or less than in 2015 2016 17 18 19 years , before 2020!!

and new home sales run 600*700.000 per year, again level of 2016*2019

problem is ppl is bigger at least 10 % compared to those years

AND DEBT GREW $15 TRLN MORE !!!

USA economy is stuck in debt pit!!

Doug78
Doug78
4 months ago

AI investment is still investment so it counts. It is probably a bubble but most technological innovation spreads came about because of bubbles so be it. As with previous bubbles calling a top is going to be really hard. I remember Issac Newton entered into the South Sea bubble and got out when the numbers didn’t make sense and then as the prices kept rising seeing his friends who stayed in making fortunes cracked, got back in at the top and rode it all the way down losing his fortune.

alx west
alx west
4 months ago
Reply to  Doug78

=stment is still investment so it counts

no! it will count IF AND When MONEY are back TO INVESTOR!
until it is just spending.

you would know if run lemon stand!

Doug78
Doug78
3 months ago
Reply to  alx west

I hAve RuN a leMonN sTaNd whEn I Was yOunG sO I KNow ecOnMIcs. iF YOu dOn’T iNvesT yoU WoN’T gEt a reTUrn.

alx west
alx west
3 months ago
Reply to  Doug78

mo11ron! it was a test, tricky question!

YOU CANT LEARN MACRO RUNNING lemon stand!

it is just microeconomics!
——-

the only way to learn MACRO is university, books and then practical macro trading!!

see Soros!

Creamer
Creamer
3 months ago
Reply to  Doug78

Ok you got me pretty good with this one

Michael Engel
Michael Engel
4 months ago

Data centers are encyclopedias. We don’t need too many Golems. Their owners will buy less chips, computers and software bc they don’t know how profitable they will be. They already started collecting data for 2/3 years. They are innovative co who found new customers. They expand knowledge exponentially. They can be useful to kids and professional. They know what they know, how learn and expand knowledge through NVDA chips pathways. The chip co will compete and cannibalize each other. Their bubble is beyond peak. The data center will benefit from their decay. Smart investor will not hesitate to sell, taking large realized gains that the markets gave them.

Last edited 4 months ago by Michael Engel
Pokercat
Pokercat
4 months ago

Very interesting analysis but I wonder what is the anticipated ROI on all this AI investment and do you think that ROI will actually materialize? When Trump is gone will China actually come in and kick our AI butt?

Creamer
Creamer
4 months ago
Reply to  Pokercat

Deepseek is already doing that. They made an AI on the same level as ours with worse computer chips and a fraction of a fraction of the money we’ve thrown at it. We will never get an ROI on the technology because we overpaid for everything like we do with all our military technology.

Michael Engel
Michael Engel
4 months ago
Reply to  Creamer

Deepseek is mostly on cell phones.

Creamer
Creamer
4 months ago

So essentially it is like I was saying yesterday then. Our economy is a mirage because trillions of dollars in AI investment are going nowhere in reality. Deepseek is still a very competitive model and cost China a few billion at most, we’re spending trillions on AI that flopped (GPT-5, which was so mediocre they had to bring back the old one). What we do get is toxic gas spewing mega structures that employ a few dozen people at best and accomplish little.

In the world of reality, our production of anything physical and therefore actually valuable is being smashed apart by tariffs, consumers are panic buying as small parcel exemptions are now gone, 25 countries aren’t even shipping here anymore (tell me how this works for small businesses?), and jobs are non-existent because companies see the writing on the wall.

Watch as the fed cuts rates, then yanks them when inflation skyrockets, and see saws around as the nation smashes itself apart not unlike a washing machine with a brick in it.

Last edited 4 months ago by Creamer
MPO45v2
MPO45v2
4 months ago
Reply to  Creamer

The one thing that isn’t a mirage is inflation spiking. The fed’s preferred measure is up 2.9%

https://www.cnbc.com/2025/08/29/pce-inflation-report-july-2025.html

Inflation edged higher in July, according to the Federal Reserve’s preferred inflation measure, indicating that President Donald Trump’s tariffs are working their way through the U.S. economy.
The personal consumption expenditures price index showed that core inflation, which excludes food and energy costs, ran at a 2.9% seasonally adjusted annual rate, according to a Commerce Department report Friday. That was up 0.1 percentage point from the June level and the highest annual rate since February, though in line with the Dow Jones consensus forecast.

On a monthly basis, the core PCE index increased 0.3%, also in line with expectations. The all-items index showed the annual rate at 2.6% and the monthly gain at 0.2%, also hitting the consensus outlook.

Creamer
Creamer
4 months ago
Reply to  MPO45v2

That’s not, but the market won’t care until they’re eating hoover stew in a post American haze. Powell tells them there’s a problem, they take it as a good sign. It’s scarily 1929 adjacent.

Doug78
Doug78
4 months ago
Reply to  MPO45v2

That is such as small increase that it is ignored by the market especially after the inflation of the Biden years. This increase is minimal as expected by anyone who ran the numbers.

MPO45v2
MPO45v2
3 months ago
Reply to  Doug78

I’m gonna save a link to this comment and make you eat crow in a few months.

Doug78
Doug78
3 months ago
Reply to  MPO45v2

You said the same thing when I said a few months ago that the trade deals will come in mid August. Remember that?

MPO45v2
MPO45v2
4 months ago

The AI bubble will come to a crash when electricity and water run out.  Between water hungry data centers and shale oil extraction, there may not be any clean water left by 2040.  Both Oxford and MIT have said 2040 to 2050 is when modern civilization will come to an end, this is just one piece of the puzzle.

I hope your social security checks cover those sky-rocketing utility bills cuz Trump keeps canceling wind and solar power plants. Lol.

Got exit strategy?

https://www.instituteforenergyresearch.org/the-grid/data-centers-drive-up-electricity-demand-causing-concern-for-grid-operators/

According to Penn State’s Institute of Energy and the Environment, in 2023, artificial intelligence (AI) data centers consumed 4.4% of electricity in the United States, which could triple by 2028. By 2030-2035, data centers “could account for 20% of global electricity use, putting an immense strain on power grids.” There are more than 10,000 data centers globally — huge warehouses containing thousands of computer servers and other infrastructure for storing, managing, and processing data. Over 5,000 data centers are in the United States with new ones being built every day.

George
George
4 months ago
Reply to  MPO45v2

Just like years past oil reserves running out sure thing Forgot news at 11.

MPO45v2
MPO45v2
4 months ago
Reply to  George

Who said anything about oil reserves? oil will never run out, it will reach a point where it’s too expensive to extract and not worth it. The world will never run out of oil, it will run out of cheap oil at some point.

Likewise water won’t run out, 75% of the planet has water, clean easily usable water will be difficult to find and thus become expensive to consume once it needs to be treated and purified.

Try to think beyond cliches.

Stu
Stu
4 months ago
Reply to  MPO45v2

I am not sure what’s being done behind the scenes, but I assure you it’s a whole heck of a lot of research. By 2035, the need for Windmills may have expired. Your guess is as good as mine? Same with Solar Panels, as they may drop to the size of a deck of cards, but the storage of such simply adds it up by the minute, and 100 of them heat and cool your home for free! Your guess is as good as mine.
No different than the EV Pause… New Technology consistently replacing existing technology, and with the remarks that this is only the beginning. Why invest 100% in something that has a 0% of existing in a few years?
Storage is where it’s at, and has been since the very beginning. Once that gets resolved, all these other BS setbacks will be gone!! Size doesn’t matter nearly as much, and need of massive amounts is diminished immensely. Who know, but in 25 years, we could be traveling in “Flying Cars” so the EVs will be unnecessary all together…

Doug78
Doug78
4 months ago
Reply to  MPO45v2

Haven’t you left the US yet? You keep talking about how civilization is about to fall and certainly with your assets you should have been able to build a luxury bunker in the safe haven of your choice.

MPO45v2
MPO45v2
3 months ago
Reply to  Doug78

As someone who’s living the high life as a socialist parasite in two countries, you should be aware of the complexities of visas to move abroad.

Jojo
Jojo
3 months ago
Reply to  Doug78

I wish he’d hurry it up. And hopefully move somewhere that doesn’t have internet!

MPO45v2
MPO45v2
3 months ago
Reply to  Jojo

If I don’t have internet, how can I read about republicans storming out in places like deep red Alabama because they are being laughed at and ridiculed when defending Trump?

https://dnyuz.com/2025/08/29/republican-storms-out-of-back-door-after-being-laughed-at-during-town-hall/

A Republican congressman left a heated town hall via the back door after he was relentlessly laughed at and heckled while trying to defend President Trump.

Rep. Barry Moore was hammered with tough queries—and more than a few heckles—during a raucous town hall in Daphne, Alabama.

The tense showdown was captured in a 40-minute video from the advocacy group Indivisible Baldwin County. It shows Moore squirming under relentless questioning about Medicaid cuts, the closure of rural hospitals, Trump-era tariffs, immigration crackdowns, abortion bans, and even the deployment of the National Guard in Washington, D.C..

Moore’s attempts to respond were drowned out with laughter and interruptions. At one point, the audience openly mocked his evasive answers.

By the end of the night, the Republican lawmaker had had enough, cutting things short and slipping away through an exit rather than facing his increasingly hostile crowd.

FDR
FDR
3 months ago
Reply to  MPO45v2

Don’t worry generative AI will solve the water and energy problems before it’s too late for the top .1%. They are the ones that matter since they think so.

F. Scott Fitzgerald famously wrote in his 1926 short story “The Rich Boy”: “Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft where we are hard, and cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand”. He elaborated that the wealthy often harbor a deep-seated belief that they are inherently better than others because those who are not born rich had to discover life’s compensations and refuges for themselves, a sense of superiority that persists even when they experience hardship or enter the world of the less affluent.

MMchenry
MMchenry
4 months ago

Outside this box: Been concerned about car (& other) insurance being his by tarrif induced costs. Sure friggin enough; my car insurance nearly doubled. On no claims or tickets.

Thanks for nothing but fascism Orange Child-man.

TwinEagles
TwinEagles
4 months ago
Reply to  MMchenry

My business building insurance doubled under Biden.

anan 7
anan 7
4 months ago
Reply to  TwinEagles

+1 to both of you. But, MMchenry and TwinEagles, IMHO your comments demonstrate the consequences of voting for D’s and R’s or anyone with a whiff of pro-war pro-oligarch allegiance, self-dealing, or grotesque personality..

When people “hold their nose” and vote for crook X because crook Y might win, we lose again and again.

(Your comments do not necessarily reflect your voting choices or preferences. I’m reacting to your IMO valid observations.)

Last edited 4 months ago by anan 7
Jojo
Jojo
3 months ago
Reply to  MMchenry

Is your insurance sourced from overseas? If not, then why would tariffs affect those costs?

El Trumpedo
El Trumpedo
3 months ago
Reply to  Jojo

Tariff drives up replacement cost.

Jojo
Jojo
3 months ago
Reply to  El Trumpedo

Too many calories makes you fat also. The tariffs just began. There is no reason to raise costs and blame it on tariffs (YET!).

Nate
Nate
4 months ago

Can you help me understand the reason that the amount of spending on AI is relevant?

IOW Why does this matter?

Pokercat
Pokercat
4 months ago
Reply to  Nate

It matters in that the data centers use huge amounts of water and electricity plus the state/local governments are subsidizing much of this building with tax avoidance. I imagine that like bitcoin mining facilities they also produce a lot of noise making any nearby residential property worthless.

Jojo
Jojo
3 months ago
Reply to  Pokercat

Then I guess we better speed up working on the nextgen fusion reactors, which will provide unlimited energy at relatively low costs.

Pokercat
Pokercat
3 months ago
Reply to  Jojo

A Manhattan type effort with world wide cooperation by all major players with results to be shared by all would not be a bad idea. All human survival depends on one type of energy or another weather it’s the energy expended by a single villager tending his crops or a nuclear power plant running a city, we are all dependent on energy.

The most important question is will humans become extinct, when and why?

Six000MileYear
Six000MileYear
4 months ago

The CAPEX chart for AI looks like a bubble ready to pop. There are some limiting factors that will slow down AI development: Data center construction permitting process, data center construction delays, construction permitting for local power generation, and power generation construction delays.

Jojo
Jojo
3 months ago
Reply to  Six000MileYear

There is an ebb and flow to everything.

Patrick
Patrick
4 months ago

GS talking its book. AI this, AI that. The bots are search engines with a natural language interface. Intelligence? Yeah, no. But Wall Street drives the messianic monetary bus as always. Advanced calculation engines with large data sets can contribute in many ways, sure. To confuse a calculation / search engine with intelligence where mimicry is the ultimate force is a mistake. How much electricity will be required to ruminate over universe worthy data sets? Is there a rational point to this?

Nate
Nate
4 months ago
Reply to  Patrick

For me, before 1995 the same thing could have been said about the Internet. Further, before 2000 the same thing could have been said about search engines. Also before 2003 the same thing could have been said about social media.

For me, we (as the collective human race) do not know what the impact of AI will be – and we cannot know because we are unable to predict such a thing.

I agree that we do not know if AI is worthy of all this investment – however we also do not know if it isn’t.

Here is Gemini’s response to the charge “To confuse a calculation / search engine with intelligence where mimicry is the ultimate force is a mistake”.

“Imagine I have a big box of all the stories and songs and pictures in the whole world. I don’t just copy one story. I learn how to put words together to make a story, or how to put sounds together to make a song. Then, I can make a brand new story or a brand new song that no one has ever heard before. It’s like having all the Lego bricks in the world and then building a castle that’s never been built before.”

(PS I asked it to make it understandable for a 6 year old so you could understand it).

Last edited 4 months ago by Nate
El Trumpedo
El Trumpedo
4 months ago
Reply to  Nate

That method, whether human or ai does it, only produces derivative works. That will only get you so far. The Simplsons, Marvel and Star Wars movies are a prime example. You can only repackage the same old crap so many times before people lose interest and wander off.

True creativity is rare, and is what creates the value that derivatives exploit until the creation is a hollow shell. Without that initial spark, there is nothing.

Jojo
Jojo
3 months ago
Reply to  El Trumpedo

That isn’t true at all! AI is assisting in NEW protein development and medical research. It has discovered solutions that have helped solve problems in the development of fusion reactors. AI is also helping solve math problems that were previously considered unsolvable, etc., etc.

Suggest you and others stick to political postings, which is something that doesn’t require any real technical understanding.

El Trumpedo
El Trumpedo
3 months ago
Reply to  Jojo

Your reading comprehension is substandard.

Creamer
Creamer
4 months ago
Reply to  Nate

See AI is great for people like you Nate. People so dumb they have to ask AI to understand concepts like this, and then parrot the answers as fact with no understanding. It’s the blind leading the blind, essentially. Autocorrect, the same technology as AI under the hood, could technically write any book since it has all the words in the language. Do you see that anywhere Nate? You don’t because it (like you) doesn’t understand high school level ideas like “context” or “intent”. This is also why OpenAI is fighting a losing suit against a family whose son was enthusiastically and manipulatively encouraged to kill himself by AI. Is this because the AI is evil? No! It’s because the AI, being autocorrect, will tell you whatever you want to hear – and people like you will take it as fact.

Jojo
Jojo
3 months ago
Reply to  Creamer

Humans have also convinced people to kill themselves and sometimes other people also.

The fact that AI can/did do this would seem to indicate that it is also human level, no? [lol]

El Trumpedo
El Trumpedo
3 months ago
Reply to  Jojo

No.

Jojo
Jojo
3 months ago
Reply to  Patrick

You do not have a clue as what you are writing about.

When you are able to have a back and forth conversation with an AI discussing any subject from technical issues, health tests, the nature of the universe, philosophy, a book you recently read or obtaining help rewriting a long internet post you’ve written, all things I have done in the past, among many other subjects, you are not dealing with a mimic.

Many tech companies are using GAI to write code (Google has said at least 25% of its code is now AI written), which is leading to a drop in programming opportunities, especially on the low end. This is not mimicry!

El Trumpedo
El Trumpedo
3 months ago
Reply to  Jojo

I talk to it everyday. The best I get from it is partial truths and hallucinations that lead me to a better google search.

Jojo
Jojo
3 months ago
Reply to  El Trumpedo

Probably because you lack the education to format intelligent questions.

El Trumpedo
El Trumpedo
3 months ago
Reply to  Jojo

… or you believe whatever bullshit it spins. It would make a suitable marriage partner for you.

Creamer
Creamer
3 months ago
Reply to  El Trumpedo

It really is a perfect invention in terms of investiblity. How better to part fools with their money than to have a machine to agree them on everything? Back in the day you had to pay yes men salaries for that. Or get elected.

Jojo
Jojo
3 months ago
Reply to  El Trumpedo

I’m game. Do I need a prenup though? What if we divorce? Will it try to steal all my money?

Christoball
Christoball
3 months ago
Reply to  Jojo

I get many false technical specifications using AI. These are all questions that are easily answered with a modest reference library. The answers are presented with authority but don’t even match my faint memory on a subject. Further investigation often proves AI wrong. I would not bet my life or the life of society, and the planet on it. AI can also go to great lengths to not rock the boat when it comes to any critique about the destructive behavior of certain groups.

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