THREAD The AI bubble will continue to inflate, and will reach a scale few can comprehend. This increases the downside risk that will follow in the wake of it popping. It's being fueled by two things. 1/🧵

Who could possibly spend hundreds of billions on data centers? How about... everybody? OpenAI alone has proposed a total of 26 gigawatts of new AI infrastructure *in just the next 4 years*. Total cost: Around a *trillion* dollars. /fin https://t.co/enLa7bPBzu

The scale of proposed AI infrastructure seems incomprehensible. But it's precisely this scale that makes it so attractive to the financial system. New forms of private debt for AI are being touted by e.g. Blackrock, -- Jamie Dimon calls it a "cockroach" https://t.co/oV6ittARGg

The other thing driving the AI bubble is vast amounts of capital (there's still $2.5 trillion cash on the sidelines) leftover from years of quantitative easing / economic expansion. Through equities, debt and VC, it's found its perfect match: insatiable demand for new AI

To young people: I'm sorry you were born too late and missed the 80's. Those were the Golden Age years for America. Trying to explain it is like explaining colors to a man blind from birth. Sorry that we lost that for y'all. We thought it would never end to be honest.

The first is insatiable demand for AI compute. This is the consequence of incomprehensibly compute-hungry new applications -- video generation, yes, but also new systems that spawn multiple "agentic" AIs that can run for minutes -- or even days -- seeking and processing

Investors are pouring billions into AI, but will it pay off? @martin_casado of @a16z speaks with @timkhiggins and @mims on the Bold Names podcast about whether we’re witnessing the next dot-com crash. 🎧 Listen:

OpenAI wants city-sized AI supercomputers. First it needs custom chips, writes Christopher @Mims.

BREAKING: MIT Rejects Trump’s Sweeping ‘Compact’ Offering Colleges Funding Advantages * The school became the first university to reject the terms, saying they would undermine independence * The University of Texas at Austin, on the other hand, has indicated enthusiasm for the

Is there something like an inverse Turing test? People who can't tell a computer is an AI or that content is generated by AI fail it. (Eventually, we all fail it.)

This is the most accurate descriptor of the new American reality that I've seen to date.

Condoleezza Rice on the U.S. vs. China | WSJ's Bold Names https://t.co/Oqkbc7HpXE

This is one of the more interesting revisionist histories of modern US economics I've heard in a long time. The story I thought I knew about China and the decline of US manufacturing is that opening trade with China created a "shock" to blue-collar labor that moved manufacturing

GS: AI capex turns into a credit story. AI-related firms have issued a record $141 billion this year

It's not about GPUs anymore; it's all about POWER. A comment from a $GOOGL employee working on datacenters: Getting GPUs and TPUs is not a bottleneck. "Power, lack of available power, reliable power has become the biggest bottleneck for us." on @AlphaSenseInc

This seems like a pretty big finding: If you train an AI model on enough video, it seems to gain the ability to reason about images in ways it was never trained to do, including solving mazes & puzzles. The bigger the model, the better it does at these out-of-distribution tasks.

What an amazing interviewee Coni Rice (yes, she asked me to call her that) is. Full episode in next post, since X hates direct links.

Think about what it means for Google to build agentic AI into Chrome and simultaneously to create a way for people to buy stuff with those agents without fear they're going to go haywire and empty their bank accounts. Just think about it.

One thing people who aren't foreign nationals considering whether to come to / stay in America don't appreciate: More than ever, talented people have *options*. And to many of them, compared to the U.S. those home countries are looking better than ever.

Check out @wsj’s Tech News Briefing podcast to hear about my new book, iWAR.

Full article: America’s Brain Drain Could Become the World’s Brain Gain Research-funding cuts and immigration changes threaten some of America’s economic advantages https://t.co/M4tPsgDL01