And pension funds almost certainly are in the VC funds getting huge windfalls from Anthropic and OpenAI exits.
Also, one can imagine the opposite situation creating the same outcry: "retirees are being frozen out of AI returns".
[3 hidden]5 mins ago
Doesn’t retirement savings fuel every bubble?
[3 hidden]5 mins ago
>Similarly, thanks to recent efforts by the Trump administration, the $15 trillion held in private sector workers’ retirement accounts is now, for the first time in history, available to be invested in private funds.
The argument is that retirement savings are being invested in different ways than before.
[3 hidden]5 mins ago
there is an argument to be made that investors with long investment horizons and predictable flows aka insurance companies and retirement funds are exactly the ones who should be taking risky long term bets instead of looking to next quarter
[3 hidden]5 mins ago
The risk of all risks today is wether OpenAI will survive. I just watched Zitron is convinced they will not [1]. Eisman said OpenAI flop will cause recession [2].
I have lived through 1 recession. I will unfortunately have to live through another recession because yet again regulators have been taking a xanny/tranquilized; and unchecked greed of Wall Street and billionaires
[3 hidden]5 mins ago
Somebody explain:
AI companies and hyperscalers' kamikaze spending on data centers may not be profitable. But they seemingly have no choice because everyone else is doing it.
Would anti-data center measures be like an arms control treaty in this arms race? Maybe if they force companies to spend slower it'll actually be good for everyone's finances.
[3 hidden]5 mins ago
> But they seemingly have no choice because everyone else is doing it.
doesn't sound like valid reason
[3 hidden]5 mins ago
That's how arms races work though. Everyone spends a ton of money to end up no further ahead compared to their rivals and peers.
"The share price will tank if we're not seen as AI-forward" is a legitimate fear for many CEOs. It's the only logical explanation for tokenmaxxing and other behavior that only makes sense from a game theoretical perspective.
[3 hidden]5 mins ago
Tokenmaxxing was the management buying the marketing that AGI was here and if employees would only use AI they would herald their own replacement?
[3 hidden]5 mins ago
If that were true then management could've spent some time coming up with better metrics than "tokens burned". They could just halve deadlines for every project, as an extreme example.
[3 hidden]5 mins ago
big if true
Clearly true though. “Not reveryone” is doing it. Most of the bubbly(?) trillions are.
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Data centers are profitable. Even before ChatGPT came out the hyperscalers were having capacity issues. Non-AI growth is explosive since 2020. Cloud customers complain they can't spin up the resources they want to spin up in the cloud, and again, not just GPU SKU's.
[3 hidden]5 mins ago
I think you're taking off in the wrong direction.
Retirement savings are 401ks in the US and they're managed by _NOT_ the retirees, but random middle managers. Those are the people who are chasing whatever the bubble is producing because their "due diligence" requires them to be bootlickers.
The same can be said of many of the tech moguls who've sworn fealty to trump; if they didn't lick the boot, they could be considered acting against shareholders value.
So, like most things in America: the people are not in control of their actual power. Not in retirement funds, not in healthcare, and not in education. They've all been turned into bizare economic dependent indirect funding programs.
[3 hidden]5 mins ago
I didn't say anything about the management of retirement savings.
The author claims two things:
1. AI company valuations dropped because of fears that Democrats would restrict data center construction.
2. The AI industry is doomed because of unsustainable spending on data centers.
If 1 is true then investors clearly believe that the current level of spending is appropriate and any restrictions on it are harmful to long term returns.
If 2 is true and unsustainable spending continues despite a lack of RoI, then "arms race" is the only explanation for the irrationality. It is driven by the fear that if you don't spend big, you'll be part of the permanent underclass of companies.
This in turn implies a data center construction moratorium is a blessing in disguise. Everyone has an ironclad excuse to reduce financially-irresponsible but mania-driven data center investments.
Bottomline:
"Data center restrictions are bad for the industry"
and
"Data center spending is unsustainable"
are polar opposite viewpoints and imply vastly different outcomes of the current buildout.
I don't know which one is true. And like most things, I suspect the truth is in the middle. But they can't be simultaneously true.
[3 hidden]5 mins ago
Article is about pension funds.
401ks are self-managed, though many stick with the default investments.
[3 hidden]5 mins ago
I despise target retirement age funds for exactly this reason and I have all my 401k funding in major index funds that I do not care about beyond that on a day to day basis.
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The major target retirement date funds are just "funds of funds" that are distributed across stock and bond index funds in an age appropriate allocation. e.g. https://investor.vanguard.com/investment-products/mutual-fun... They're generally not actively managed funds chasing bubbles.
[3 hidden]5 mins ago
If you see this as a problem to be solved, please don't do anything. This is how the normal healthy market works. Leave it alone.
This seems like pure slopulism to me, to be honest. It doesn't back its claim that pensions funds are fueling the supposed bubble, just that pension funds are invested in AI companies. The given solution of completely divesting from index funds (since some AI companies are in the Nasdaq) is also completely unreasonable.
>Are we on the brink of the next financial crisis? Last Thursday, there was a “bloodbath in tech stocks,” as the stock market lost $3.2 trillion in a single day.
Sounds bad, until you take a closer look and see that this was just a 4% decrease.
>In the longer term, with enough political will, we can redirect our retirement savings towards productive investment, such as building out affordable housing and funding the renewable energy transition. For example, NYC Comptroller Mark Levine announced a $4 billion affordable housing initiative in April. Pension fund trustees could follow his lead rather than direct money towards Blackstone, one of the country’s largest landlords and a major fund manager for public pensions.
The slop bells are deafening. I suspect that the author is driven more by political motives than a sincere belief that the AI industry is financially doomed.
[3 hidden]5 mins ago
Yeah, anytime someone doesn't use percentages for stock moves I know they have some agenda they are pushing.
[3 hidden]5 mins ago
Didn't see them complaining when their fund went to the moon tho
[3 hidden]5 mins ago
Who are they?
[3 hidden]5 mins ago
them? their? Do you not participate in a 401k?
[3 hidden]5 mins ago
Is this really the best argument they can make? A 4.5% correction bringing the S&P500 down to only a 11.5% YTD return? And a quote from a guy who's predicted 14 out of the last 2 bubbles? That's it?
HN.zip
Also, one can imagine the opposite situation creating the same outcry: "retirees are being frozen out of AI returns".
The argument is that retirement savings are being invested in different ways than before.
1 https://www.youtube.com/watch?v=YB3XE8mWNF0
2 https://www.youtube.com/watch?v=w1dRDj1QRks
AI companies and hyperscalers' kamikaze spending on data centers may not be profitable. But they seemingly have no choice because everyone else is doing it.
Would anti-data center measures be like an arms control treaty in this arms race? Maybe if they force companies to spend slower it'll actually be good for everyone's finances.
doesn't sound like valid reason
"The share price will tank if we're not seen as AI-forward" is a legitimate fear for many CEOs. It's the only logical explanation for tokenmaxxing and other behavior that only makes sense from a game theoretical perspective.
Clearly true though. “Not reveryone” is doing it. Most of the bubbly(?) trillions are.
Retirement savings are 401ks in the US and they're managed by _NOT_ the retirees, but random middle managers. Those are the people who are chasing whatever the bubble is producing because their "due diligence" requires them to be bootlickers.
The same can be said of many of the tech moguls who've sworn fealty to trump; if they didn't lick the boot, they could be considered acting against shareholders value.
So, like most things in America: the people are not in control of their actual power. Not in retirement funds, not in healthcare, and not in education. They've all been turned into bizare economic dependent indirect funding programs.
The author claims two things:
1. AI company valuations dropped because of fears that Democrats would restrict data center construction.
2. The AI industry is doomed because of unsustainable spending on data centers.
If 1 is true then investors clearly believe that the current level of spending is appropriate and any restrictions on it are harmful to long term returns.
If 2 is true and unsustainable spending continues despite a lack of RoI, then "arms race" is the only explanation for the irrationality. It is driven by the fear that if you don't spend big, you'll be part of the permanent underclass of companies.
This in turn implies a data center construction moratorium is a blessing in disguise. Everyone has an ironclad excuse to reduce financially-irresponsible but mania-driven data center investments.
Bottomline:
"Data center restrictions are bad for the industry"
and
"Data center spending is unsustainable"
are polar opposite viewpoints and imply vastly different outcomes of the current buildout.
I don't know which one is true. And like most things, I suspect the truth is in the middle. But they can't be simultaneously true.
401ks are self-managed, though many stick with the default investments.
>This account doesn’t exist. Try searching for another.
>Are we on the brink of the next financial crisis? Last Thursday, there was a “bloodbath in tech stocks,” as the stock market lost $3.2 trillion in a single day.
Sounds bad, until you take a closer look and see that this was just a 4% decrease.
>In the longer term, with enough political will, we can redirect our retirement savings towards productive investment, such as building out affordable housing and funding the renewable energy transition. For example, NYC Comptroller Mark Levine announced a $4 billion affordable housing initiative in April. Pension fund trustees could follow his lead rather than direct money towards Blackstone, one of the country’s largest landlords and a major fund manager for public pensions.
The slop bells are deafening. I suspect that the author is driven more by political motives than a sincere belief that the AI industry is financially doomed.