On Moore’s Law continuing: continuing progress on Moore’s Law is certainly challenging, but when you’ve got so much more money pumping into compute, that’s also a lot more incentive and ability to make those gains happen. I wouldn’t expect that progress to continue at the historical rate when demand increases faster than the historical rate. I think you’re better modeling it with something like Wright’s Law and considering learning curves, than just thinking that the next step in progress is more difficult than the last (true, but there’s also more effort being expended in finding those gains).
Furthermore, consider that as AI improves, AI can also become a part of the process of improving chips and their fabrication processes. Money from AI goes in, but so does expertise from AI as well. If those tools are becoming so useful that Anthropic’s profits continue to 10x, surely they will be useful for the chip designers as well, and that suggests that progress on that end should increase alongside the buildout, not continue at historical levels.
Sounds a bit like dinosaurs finding that they have to prioritize their resources between conceiving/raising progeny and doing anything else. Well, they at least didn’t HAVE to prove they produced value otherwise.
Afterthought: Remember what happened to the dinosaurs? … and the ascendancy of the nimble mammals started - and they begat humans - who reduced themselves to a dinosaur via culture. Well, OK, he even recognizes that the dinosaur is running into trouble - but who says the dinosaurs didn’t see that then? It’s just that the species has a boundary of adaptation - notwithstanding that small groups cross that - but they, too have an outer limit (in immunity to culture). Sic transit gloria mundi …
P.S. Maybe refresh your memory on how IBM tried to lock in God and the world into the one and only technology (from the) ad how that ended.
On Moore’s Law continuing: continuing progress on Moore’s Law is certainly challenging, but when you’ve got so much more money pumping into compute, that’s also a lot more incentive and ability to make those gains happen. I wouldn’t expect that progress to continue at the historical rate when demand increases faster than the historical rate. I think you’re better modeling it with something like Wright’s Law and considering learning curves, than just thinking that the next step in progress is more difficult than the last (true, but there’s also more effort being expended in finding those gains).
Furthermore, consider that as AI improves, AI can also become a part of the process of improving chips and their fabrication processes. Money from AI goes in, but so does expertise from AI as well. If those tools are becoming so useful that Anthropic’s profits continue to 10x, surely they will be useful for the chip designers as well, and that suggests that progress on that end should increase alongside the buildout, not continue at historical levels.
"What did I confidently assume that was, in fact, oppositely wrong?" :)
Compute scarcity is a path signal. Cross-asset, what usually matters first is how capex and discount rates reprice around that bottleneck.
Great stuff as usual. Interesting and well reasoned and a compelling argument although time will tell.
psst.
moores law
has the opposite effect
in issues of power consumption
as opposed to memory or processor speed.
Sounds a bit like dinosaurs finding that they have to prioritize their resources between conceiving/raising progeny and doing anything else. Well, they at least didn’t HAVE to prove they produced value otherwise.
Afterthought: Remember what happened to the dinosaurs? … and the ascendancy of the nimble mammals started - and they begat humans - who reduced themselves to a dinosaur via culture. Well, OK, he even recognizes that the dinosaur is running into trouble - but who says the dinosaurs didn’t see that then? It’s just that the species has a boundary of adaptation - notwithstanding that small groups cross that - but they, too have an outer limit (in immunity to culture). Sic transit gloria mundi …
P.S. Maybe refresh your memory on how IBM tried to lock in God and the world into the one and only technology (from the) ad how that ended.