News
Where do you start these days?
The FT has AI ‘exuberance’ risks ending in lengthy investment bust, BIS warns. BIS is the Bank for International Settlements. It’s been described as the Fed of global central banks. That's not quite right. What we learned in 2008, we all learned something didn’t we? One thing anyway, the Fed is really the Fed of global central banks. Nonetheless, if I remember correctly, BIS was early waving flags about the then coming derivatives crisis. Can you say AIG?
Article more worrying was in FT yesterday about the Large Language Model (LLM) company Anthropic. LLM has a different ring than AI, no? Anthropic hired an economist from Stanford – two red flags, who “has specialised in the impact of technology on growth.” Danger! Danger! Will Robinson!
The FT picks out this paragraph of the economist’s conjuring the economics of AI,
“What is the price of this amazing change in living standards? Recall that we would face a flow probability of existential risk of 1% per year for 40 years, so the probability we survive this A.I. explosion is exp(−.01 × 40) ≈ 0.67. In other words, with log utility it is optimal to take a 1 in 3 chance of ending human existence in exchange for a 2/3 chance of dramatically raising living standards by a factor of 55.”
The FT pulled this as an example of the “disaster porn” marketing strategy of LLM companies, especially Anthropic and OpenAI. What should be better pointed out is every number in that paragraph written by the Stanford, now Anthropic economist, was pulled out of the economist's ass and completely meaningless. Lord, how many economic numbers are already just shit? Might be called tradition at this point.
AI is just the latest pump of this tech finance era that began in 2009 with bitcoin. It and Elon are the greatest financial icons of this era. SPCX is down 25% off its highs, even dipping below its first day trade. What happens if it goes below underwriter price? Do the banks ask Elon to make the difference. Do they mark to market?
Bitcoin, by far the most meaningless shill of the era, is now 50% off its all-time high of 8 months ago. Over the last six months, each time they’ve tried to pump it back up, it goes back further down. We’ll see.
In a very related topic, Dr. Collier has an excellent piece on how misinformation is its own industry on the net, some of it paid for by the platforms. The Eastern Kentucky theoretical physicist tells the story of the Twitter-Bros pushing “The First Room-Temperature Ambient-Pressure Superconductor." This is prime 21st century journalism:
It’s Cup do or die time. Been a lot of great futbol the last few weeks. France, Argentina, Brazil and the Dutch all look good. The best story is one-third of teams in second round are from Africa, including Congo making it through. I'm for an all-Africa final, but I wouldn’t bet on it, though odds come down if you include the Frenches. After all, Mbappe ain’t no French name – father Cameroon and mother Algerian. How about that for your imperial ironies? The empire always comes home.