I think you can see the consequences of uncertainty come forward in the explosion in corporate stock buybacks; that’s a sign of retrenchment, where money that could be deployed or invested is instead pushed out to shareholders. No wonder markets are near all-time highs while ordinary workers feel miserable.
The only area where this investment retrenchment and uncertainty is not in evidence comes from the insane capital expenditures for AI computing power, which is propping up the economy almost by itself. That’s why municipal pushback to data centers will be one of the more fascinating developments of the next few years. And it’s why we should pay a lot of attention to whether AI is a viable business, whether its gains are accelerating or stagnating, and whether too much of this capacity deployment is on spec and fated to cause a crash. (AI is creating other economic problems, but we’ll touch on those later.)
Louisiana residents probably already know that their Public Service Commission is preparing to approve Entergy's plan to build three new gas fired power plants solely for the purpose of supplying Meta's massive new data center in Richland Parish. The plants won't benefit Louisiana ratepayers at all. But it will inevitably result in their paying higher rates.
Okay, well, maybe there are some benefits to developing cutting edge AI technology. For example, today, Microsoft announced its AI program has created a spreadsheet that is actually bad at math.
Microsoft notes that you can combine its new AI function with other Excel functions, including IF, SWITCH, LAMBDA, or WRAPROWS. The company adds that information sent through Excel’s COPILOT function is “never” used for AI training, as “the input remains confidential and is used solely to generate your requested output.”
The COPILOT function comes with a couple of limitations, as it can’t access information outside your spreadsheet, and you can only use it to calculate 100 functions every 10 minutes. Microsoft also warns against using the AI function for numerical calculations or in “high-stakes scenarios” with legal, regulatory, and compliance implications, as COPILOT “can give incorrect responses.”
Nobody knows what the use for any of this is, but it sure is interesting. Anyway, it's where all the money in America is going now so hopefully there aren't any signs of that whole business spectacularly imploding anytime soon. There aren't any signs of that, right?
On Tuesday, Meta announced internally that it is splitting its A.I. division — which is known as Meta Superintelligence Labs — into four groups, two people with knowledge of the situation said. One group will focus on A.I. research; one on a potentially powerful A.I. called “superintelligence”; another on products; and one on infrastructure such as data centers and other A.I. hardware, they said.
The reorganization is likely to be the final one for some time, the people said. The moves are aimed at better organizing Meta so it can get to its goal of superintelligence and develop A.I. products more quickly to compete with others, the people said.
Some A.I. executives are expected to leave, the people said. Meta is also looking at downsizing the A.I. division overall — which could include eliminating roles or moving employees to other parts of the company — because it has grown to thousands of people in recent years, the people said. Discussions remain fluid and no final decisions have been made on the downsizing, they said.
Best of luck with all that.
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