1. Investors lose interest and many companies lose access to capital.
2. A lot of the purchases from AI companies are being made with investor capital. As this dries up companies with high debt scramble to service the debt and focus on profits to achieve this goal. This means higher prices and less investment into infrastructure.
3. This has large ripple effects across the broader financial markets, which forces federal intervention. Maybe bailouts for the tech sector. Maybe just some quantitative easing.
4. There will be a second wave of AI companies in the wake that focus on delivering value under constrained capital markets. These will be well positioned 10 years later to catch a major updraft in the next finical cycle.
5. Overall western R&D activity in AI decreases under these conditions, lower hardware costs allow foreign labs to operate at much lower hardware costs. This increases the systematic risk that Artificial Super Intelligence is eventually developed in a rival nation state.
How seriously people treat this risk will play a major role into the fate of the major labs. It's going to be used in the argument for bailout. It could be used to spin a more extreme narrative, pushing for a flavor of nationalization. At least one lab will survive in the defense sector, but it could be a secondary lab that is a M&A target of an established company.
If the risk is serious or not has little impact on how seriously we treat the risk. Just another way that AI is disconnecting us from ground truth.
2. A lot of the purchases from AI companies are being made with investor capital. As this dries up companies with high debt scramble to service the debt and focus on profits to achieve this goal. This means higher prices and less investment into infrastructure.
3. This has large ripple effects across the broader financial markets, which forces federal intervention. Maybe bailouts for the tech sector. Maybe just some quantitative easing.
4. There will be a second wave of AI companies in the wake that focus on delivering value under constrained capital markets. These will be well positioned 10 years later to catch a major updraft in the next finical cycle.
5. Overall western R&D activity in AI decreases under these conditions, lower hardware costs allow foreign labs to operate at much lower hardware costs. This increases the systematic risk that Artificial Super Intelligence is eventually developed in a rival nation state.