I'm pretty sure AI is a real thing. Sure some arguments are bonkers but there's a lot of real stuff happening like Waymos, Claude code, AlphaFold, MuZero and the like. Of those only Claude is really a language model. Skeptics get over hung up on the limits of language models - they are not the only AI.
There was some puzzlement as to what computers were for. See:
>Thomas J. Watson, the chairman of IBM in 1943, who purportedly said, "I think there is a world market for maybe five computers
Also the speed of investment isn't unprecedented - the railway boom was much larger as a percent of gdp.
Well the other models are even less useful so I try and stick with the steelman version of these things. That IBM quote isn't ambiguity about what computers are for, but about who can afford them in their current, highly bespoke state. Finally, the railway boom wasn't $1.5 trillion in a few years. Also, again, we knew what railroads were for.
I'm not saying the tech isn't impressive. I'm impressed! Cursor bugbot has found some pretty gnarly bugs in my code, blessedly. But it's neither reliable nor economically viable, even if you don't think they owe anyone anything for training on their data (I do think they owe us).
>During the 19th-century "Railway Mania," railroad investment in the U.S. reached a peak of 6.0% of GDP, a level significantly higher than current AI infrastructure spending, which is estimated to be around 1.6% of U.S. GDP.
says Google. There was a big crash after, wiping out investors. Time will tell with this one.
I spent some time looking for sources for the various "railroad investment as % of GDP" numbers floating around, and I don't think they're very good. The modern concept of GDP didn't even exist back then, so the denominator is calculated in retrospect from the limited contemporary data. The numerator is more confident, but the papers I found mostly showed closer to 3%. A pretty wide range is at least defensible though, and I guess VCs are comparing against the high end for obvious reasons.
This AI investment is interesting because it's mostly not in durable goods, unlike the railroad's rails and (most importantly) land. The buildings and power infrastructure for the datacenters could retain value for decades, but the servers won't unless something goes badly wrong. I believe this is the largest investment in human history justified primarily by the anticipated value of intellectual property.
There was some puzzlement as to what computers were for. See:
>Thomas J. Watson, the chairman of IBM in 1943, who purportedly said, "I think there is a world market for maybe five computers
Also the speed of investment isn't unprecedented - the railway boom was much larger as a percent of gdp.