11 posts tagged “economics”
2025
One analyst recently speculated (via Ed Conard) that, based on Nvidia's latest datacenter sales figures, AI capex may be ~2% of US GDP in 2025, given a standard multiplier. [...]
Capital expenditures on AI data centers is likely around 20% of the peak spending on railroads, as a percentage of GDP, and it is still rising quickly. [...]
Regardless of what one thinks about the merits of AI or explosive datacenter expansion, the scale and pace of capital deployment into a rapidly depreciating technology is remarkable. These are not railroads—we aren’t building century-long infrastructure. AI datacenters are short-lived, asset-intensive facilities riding declining-cost technology curves, requiring frequent hardware replacement to preserve margins.
— Paul Kedrosky, Honey, AI Capex is Eating the Economy
Baroness Kidron’s speech regarding UK AI legislation (via) Barnstormer of a speech by UK film director and member of the House of Lords Baroness Kidron. This is the Hansard transcript but you can also watch the video on parliamentlive.tv. She presents a strong argument against the UK's proposed copyright and AI reform legislation, which would provide a copyright exemption for AI training with a weak-toothed opt-out mechanism.
The Government are doing this not because the current law does not protect intellectual property rights, nor because they do not understand the devastation it will cause, but because they are hooked on the delusion that the UK's best interests and economic future align with those of Silicon Valley.
She throws in some cleverly selected numbers:
The Prime Minister cited an IMF report that claimed that, if fully realised, the gains from AI could be worth up to an average of £47 billion to the UK each year over a decade. He did not say that the very same report suggested that unemployment would increase by 5.5% over the same period. This is a big number—a lot of jobs and a very significant cost to the taxpayer. Nor does that £47 billion account for the transfer of funds from one sector to another. The creative industries contribute £126 billion per year to the economy. I do not understand the excitement about £47 billion when you are giving up £126 billion.
Mentions DeepSeek:
Before I sit down, I will quickly mention DeepSeek, a Chinese bot that is perhaps as good as any from the US—we will see—but which will certainly be a potential beneficiary of the proposed AI scraping exemption. Who cares that it does not recognise Taiwan or know what happened in Tiananmen Square? It was built for $5 million and wiped $1 trillion off the value of the US AI sector. The uncertainty that the Government claim is not an uncertainty about how copyright works; it is uncertainty about who will be the winners and losers in the race for AI.
And finishes with this superb closing line:
The spectre of AI does nothing for growth if it gives away what we own so that we can rent from it what it makes.
According to Ed Newton-Rex the speech was effective:
She managed to get the House of Lords to approve her amendments to the Data (Use and Access) Bill, which among other things requires overseas gen AI companies to respect UK copyright law if they sell their products in the UK. (As a reminder, it is illegal to train commercial gen AI models on ©️ work without a licence in the UK.)
What's astonishing is that her amendments passed despite @UKLabour reportedly being whipped to vote against them, and the Conservatives largely abstaining. Essentially, Labour voted against the amendments, and everyone else who voted voted to protect copyright holders.
(Is it true that in the UK it's currently "illegal to train commercial gen AI models on ©️ work"? From points 44, 45 and 46 of this Copyright and AI: Consultation document it seems to me that the official answer is "it's complicated".)
I'm trying to understand if this amendment could make existing products such as ChatGPT, Claude and Gemini illegal to sell in the UK. How about usage of open weight models?
2024
If you own the tracks between San Francisco and Los Angeles, you likely have some kind of monopolistic pricing power, because there can only be so many tracks laid between place A and place B. In the case of GPU data centers, there is much less pricing power. GPU computing is increasingly turning into a commodity, metered per hour. Unlike the CPU cloud, which became an oligopoly, new entrants building dedicated AI clouds continue to flood the market. Without a monopoly or oligopoly, high fixed cost + low marginal cost businesses almost always see prices competed down to marginal cost (e.g., airlines).
2023
Before we scramble to deeply integrate LLMs everywhere in the economy, can we pause and think whether it is wise to do so?
This is quite immature technology and we don't understand how it works.
If we're not careful we're setting ourselves up for a lot of correlated failures.
— Jan Leike, Alignment Team lead, OpenAI
Every wave of technological innovation has been unleashed by something costly becoming cheap enough to waste. Software production has been too complex and expensive for too long, which has caused us to underproduce software for decades, resulting in immense, society-wide technical debt. This technical debt is about to contract in a dramatic, economy-wide fashion as the cost and complexity of software production collapses, releasing a wave of innovation.
2018
Consider Bitcoin a grand middle finger. It’s a prank, almost a parody of the global financial system, that turned into a bubble. “You plutocrats of Davos may think you control the global money supply,” the pranksters seem to say. “But humans will make an economy out of anything. Even this!”
2010
This is an outrage. Phil Gyford’s reaction to the reaction to the Digital Economy Bill. Ends on a positive note hoping that the online furor will result in more technology-minded people paying more attention to the UK political process.
2009
We are facing an economic crisis that is within our capacity to solve, and an ecological crisis that we lack the political means to prevent. It's only by failing at the former that we might have a chance at surviving the latter.
US economic data spreadsheets from the Guardian. At the Guardian we’ve just released a bunch of economic data about the US painstakingly collected by Simon Rogers, our top data journalist, as Google Docs spreadsheets. Get your data here.
2007
Global Hackers Create a New Online Crime Economy (via) Fascinating, detailed look at the evolution of the hacker service economy. Of particular interest: a web application that sells access to hacked machines to identity thieves on a timeshare basis.
2004
Are you better off now than you were four years ago? (via) It’s the economy, stupid! Vicious employment graphs, available as postcards.