Also $1T in data center investment makes sense when you realize that companies are racing to create virtual white collar workers. Google spends $9B a year on software engineers.
Well they are projected to spend $175 - $185B on capex in this year alone most of it for AI buildout. Lets say only 150B of that is for AI. If they can then somehow replace all their software engineers with AI that they then run for free and depreciate over 10 years then they just replaced 9B a year software expense with 15B a year depreciation expense for the next decade. Yes this is grossly oversimplified but it still illustrates how crazy high of a bet they're making on AI.
I believe the One Big Beautiful Bill Act allows full depreciation in the first year: https://www.bassets.net/blog/obbba-depreciation-2025-2026-gu...
That's not a new market, that's a new feature in an existing market. Lots going on in transportation and I'm not seeing any scenario where self-driving cars vastly increase total output vs just eat up other forms of transportation and change where people live/how long they commute.
> Also $1T in data center investment makes sense when you realize that companies are racing to create virtual white collar workers. Google spends $9B a year on software engineers.
Similarly, many companies are trying to be more efficient - "do what we already do, but better". That's different than growth.
What could Google do with 9B on software agents? Let's say the future of them is amazing and this means they could write 100x more code than they can today.
Has Google recently showed much ability to turn "more/faster code" into "superbly profitable new market"?
Someone's gonna have to crack the demand side issue for anything transformative to happen.
Henry Ford II: "Walter, how are you going to get those robots to pay your union dues?" Walter Reuther: "Henry, how are you going to get them to buy your cars?"
And for so long, I've had people tell me to just get a job. But I tell them that I don't want a job: I want money and I want something to do. Those two things don't have to be together.
I think this is the hard part: philosophically so many of us have learned we need jobs and don't realize a job can be decomposed into money and something to do.
So I think we need to start looking more creatively at 1) how people receive money from others and 2) how people give services to others.
OTOH replacing people with AI would indeed bring about a huge economic downturn. What would be good is augmenting humans so that they can do 10x more. That would enable things that are hard to imagine exactly now, much like computers enabled interesting transformations in the society from 1980s to 2010s.
The current crop of AI is by construction unable to reach the human level of cognition, but it is quite good at doing some symbolic manipulation tasks. We will get used to that, and will integrate that in our workflows. Humans are still going to be needed.
Hundreds of billions are changing hands globally, every week, at the retail level alone.
And that happens literally every week, week after week.
That constitutes a massive market in any sense I can think of.
That needs a way more complex explanation than simple gut feeling.
Which will take decades to become addressable. Self-driving cars work OK in a few cities in one country. Expanding that to be able to cover Mumbai and Omsk and Nairobi will require significantly more work.
> Also $1T in data center investment makes sense when you realize that companies are racing to create virtual white collar workers.
Does it make sense? How much would the resulting virtual white collar worker cost? Because datacenters have running operational costs, and so do the people operating them and working on the software that runs in them.
The money printer will be used, and maybe it all works out - or we see wealth hyperinflation and build out our own aristocracy.
No. It doesn’t. And if you’re defining “drives” as “it drives as well as I do” then you probably shouldn’t be on the road.
> makes sense
Nothing about any of this makes sense. Tell me, when all white collar jobs are replaced by AI, where will the customers come from? Who will have income to afford your products or services? The poor barista whose surveillance videos are training the robot that will soon replace them?
Leaving aside any consideration of human compassion or questioning of the purpose of an economic system (hint: it’s not just an abstract machine), shrinking the pool of potential customers by orders of magnitude has never been a recipe for sustainable success (let alone growth).
