Capital Cycles and AI

Doug O'Laughlin · 13 Jan 2025 · fabricatedknowledge.com ↗

3 korrents from this piece

Doug O'Laughlin did not write this page.

Every claim below was made in this piece, quoted word for word and numbered in the order the piece makes them, so you can read it there rather than take our word for it. The sentence above each quote is our reading of the claim, not their wording. Each quote was checked against a stored copy of the page at build time; where the two differ, the quote is the fact.

Our reading
Every semiconductor shortage is followed by a glut, because capacity arrives in lumps long after the price signal that ordered it.

Their wordsA glut follows every semiconductor shortage.

Interesting
Our reading
The AI build-out is not yet a bubble, because it lacks the self-reinforcing feedback loop that drove the railway and telecom manias.

Their wordsWhat prevents this from being a broad-based bubble is that we are missing a critical feedback loop from the announcement's impact, like network growth or land value.

Interesting
Our reading
If the AI build-out does become a bubble, power and data centres are the assets that will carry it.

Their wordsIn today’s world, I think the increase in self-fulfilling asset prices will be due to power and data centers.

Interesting