And pension funds almost certainly are in the VC funds getting huge windfalls from Anthropic and OpenAI exits.
Also, one can imagine the opposite situation creating the same outcry: "retirees are being frozen out of AI returns".
seizethecheese
Somebody explain:
AI companies and hyperscalers' kamikaze spending on data centers may not be profitable. But they seemingly have no choice because everyone else is doing it.
Would anti-data center measures be like an arms control treaty in this arms race? Maybe if they force companies to spend slower it'll actually be good for everyone's finances.
triceratops
the worrying thing is how some AI exposed companies got fast tracked into the indexes or how because of AI some indexes r now overexposed to AI
dzonga
People always say, "maximizing shareholder value" like it's obviously a bad thing, when actually every retiree and prospective retiree is a shareholder.
bagacrap
If you see this as a problem to be solved, please don't do anything. This is how the normal healthy market works. Leave it alone.
exabrial
The risk of all risks today is wether OpenAI will survive. I just watched Zitron is convinced they will not [1]. Eisman said OpenAI flop will cause recession [2].
The key question is (a) whether the risks are really identified and understood; and (b) whether opacity is fueling risk transfer to public markets.
Retirement funds or not, big tech companies have diversified to the point that investors cannot assess their risks (except for Apple).
There's ordinary non-market factors (esp. electric subsidies and their secondary markets), mark-to-market income on cross-equity investments, debt load and contracts off the books, etc.
The cross-investment is usually somewhat stabilizing, since it e.g., aligns nvidia with its customers' success; that's how keiretsu works.
However, Microsoft, Google, and Amazon are at risk of losing a large proportion of their cloud profit-centers, and the threat to Google's ad franchise is already biting deep. Each company's equity would drain if they had no compelling path to take part of the AI proceeds. So they are compelled by both market and capital competition.
As in politics, we used to be able to assume people in power were operating as expected to gain profits or maintain political power in the relatively near term. However, as the advantages of disinformation and dark money (for politics) and the prospects of economy-scale disruption (for AI) both give significant advantages to aggressive and strategic behaviors in the relatively near term, it basically creates moral hazards that are unavoidable, and leader cohorts respond by ousting anyone with doubts. So for voters or investors, the "representative" proxy of leadership character is less useful, and everyone has to fall back to watching the weather and assuming the worst about leadership.
Apple has long decided: (a) equity buy-backs, not peripheral ventures; (b) AI as consumer, local and otherwise, with privacy focus (whatever that can be). However, Apple's also in a tough position: outside of AI, nothing really drives new purchases because even old hardware is plenty for most customers, and memory prices are biting into margins. So Apple is an understandable bet, but not necessarily a great one.
Where's the money to go, in a world where everyone depends not on the red wheel barrow for food but on 8% annually to beat inflation?
w10-1
The owners of existing data centers might make more money if new data centers are blocked, because there is currently plenty of demand and they will have less competition. Or maybe not. There are a zillion other considerations like this. Do you really think you can figure it out?
For retirement savings, index funds are hard to beat, and it's hard to say whether tech stocks should be over- or under-weighted compared to the index. Tech stocks went down recently, but maybe it's a good time to buy? People who invested in 2008 did well.
comments (10)
teddyh
Also, one can imagine the opposite situation creating the same outcry: "retirees are being frozen out of AI returns".
seizethecheese
AI companies and hyperscalers' kamikaze spending on data centers may not be profitable. But they seemingly have no choice because everyone else is doing it.
Would anti-data center measures be like an arms control treaty in this arms race? Maybe if they force companies to spend slower it'll actually be good for everyone's finances.
triceratops
dzonga
bagacrap
exabrial
1 https://www.youtube.com/watch?v=YB3XE8mWNF0
2 https://www.youtube.com/watch?v=w1dRDj1QRks
novaRom
Retirement funds or not, big tech companies have diversified to the point that investors cannot assess their risks (except for Apple).
There's ordinary non-market factors (esp. electric subsidies and their secondary markets), mark-to-market income on cross-equity investments, debt load and contracts off the books, etc.
The cross-investment is usually somewhat stabilizing, since it e.g., aligns nvidia with its customers' success; that's how keiretsu works.
However, Microsoft, Google, and Amazon are at risk of losing a large proportion of their cloud profit-centers, and the threat to Google's ad franchise is already biting deep. Each company's equity would drain if they had no compelling path to take part of the AI proceeds. So they are compelled by both market and capital competition.
As in politics, we used to be able to assume people in power were operating as expected to gain profits or maintain political power in the relatively near term. However, as the advantages of disinformation and dark money (for politics) and the prospects of economy-scale disruption (for AI) both give significant advantages to aggressive and strategic behaviors in the relatively near term, it basically creates moral hazards that are unavoidable, and leader cohorts respond by ousting anyone with doubts. So for voters or investors, the "representative" proxy of leadership character is less useful, and everyone has to fall back to watching the weather and assuming the worst about leadership.
Apple has long decided: (a) equity buy-backs, not peripheral ventures; (b) AI as consumer, local and otherwise, with privacy focus (whatever that can be). However, Apple's also in a tough position: outside of AI, nothing really drives new purchases because even old hardware is plenty for most customers, and memory prices are biting into margins. So Apple is an understandable bet, but not necessarily a great one.
Where's the money to go, in a world where everyone depends not on the red wheel barrow for food but on 8% annually to beat inflation?
w10-1
For retirement savings, index funds are hard to beat, and it's hard to say whether tech stocks should be over- or under-weighted compared to the index. Tech stocks went down recently, but maybe it's a good time to buy? People who invested in 2008 did well.
skybrian
>This account doesn’t exist. Try searching for another.
hnburnsy