Revenue based taxes are a an idea to consider as they have many advantages - a big one is that they are harder to evade.
One disadvantage of them is that they give advantage to big players that own the whole supply chain. Imagine you are a small player and need a supplier who needs a supplier who needs a supplier. Suddenly the tax is paid 4 times while your competitor who owns the whole supply chain pays once.
Imo when you start thinking about it the most reasonable position is that corporate income tax should be 0. Instead we should focus on consumption taxes, land taxes and taxing other resources and especially pollution.
VAT and income tax are completely different taxes.
One is a tax on income. The other is a consumption tax - like a sale tax but with additional accounting steps.
>>Everything you named should be included in the price you charge for a cup of coffee. So the money you extract from it, minus the cost you named is your profit.
When you first invest 100k and then sell something for 2$ you don't make a profit for a while. You may be arguing for some other tax but it's ridiculous to argue income tax should be paid until revenue > costs.
>>If you dont make profit on that sale, I have bad news for your business idea.
When doing business you often don't know if you will make profit or not. In the coffee example you don't know how many you are going to sell so it's impossible to "include costs in the cup of coffee" because that depends on how many you are going to sell and that's unknown.
Your whole line of reasoning makes 0 sense.
My whole line of reasoning makes perfect sense given I worked in trades doing exactly what I talk about in a country with one of the most complicated tax systems there is.
Prices are calculated by adding your costs into the base price which is common sense. If you do that you can actually calculate the amount of coffees you need to sell to turn a profit and if the business even makes sense in the first place.
Every unit of coffee you sell should turn a profit. Which in turn should be taxed. Even cigarettes that probably only turn micro cents profit should be taxed by per unit sold. They even are, given their sales are heavily regulated.
No company is giving out "free" products without making a profit just to go even on their initial investment.
Over what timescale do you amortize your investment by pricing it in? Do you earn back your $100k by selling $20 coffee? That wouldn’t be sustainable. So, this is where the loss comes in. You can’t realistically sell at a profit considering your capital investment if you aren’t carrying it over longer periods of time.
He doesn't need AI background to commentate on financials. Your post reads like a personal attack. His record talking about stock market doesn't matter either. There is about 0 information in anyone talking about what stock market is going to do.
So his point is that big % of cloud revenue of Microsoft/Google/Amazon come from companies that:
1)are very unprofitable
2)need to raise staggering amount of capital to survive
3)are financed by their suppliers and that money is circling back to them
Your counter-argument is this:
>> It truly doesn't matter whether closed source Frontier lab models are spewing tokens or large foreign open weight models are doing it, the token factories will be just fine, and that's really all I care about.
This might be true but there are 2 majors questions here. One is exposure to Anthropic/OpenAI. If they go bust/can't IPO at expected price it's a big loss hyperscalars will need to admit. The second question is how much of that cloud revenue comes from training. This part of the demand is going shrink or disappear in the bad scenario.
He doesn't have a finance background either and it's quite a job going through the 7482 words or whatever he's rattled off this week to analyse where he's gone wrong.
His fundamental error I think, illustrated here https://www.youtube.com/watch?v=C0Gcx-6hJJw&t=196s is he thinks AI is just another tech product to hype rather than a comparable revolution to the industrial one.
The weak angle is on AI usability. I think he is wrong there; AI is clearly useful. Now, there is a discussion if it is multi-trillion dollar useful; I think it isn't, but it is useful nonetheless.
Now, there is a strong angle, which is the economic viability of AI, and the gargantuan amount of money being burned in what is a very risky bet. There, his arguments have proven so far rock solid.
The fact that you (as all his critics) chose to attack only the weak angle says something.
It's kind of complicated to argue on the economic viability as the spending does seem a bit excessive but if you assume an industrial revolution kind of situation it can be justified, if you assume it's just another tech product to hype then it isn't and will all fall apart. I think Zitron is wrong on that but can't prove it as I can't see the future.
You can look as past quotes like "that sound you hear is the slow deflation of the bubble I've been warning you about since March" in July 2024 and say he was over pessimistic on the economics but it's hard to prove he still is.
There's a fundamental issue that in standard finance the present value of an investment is the discounted value of the future cash flows which are hard to estimate with a developing tech like AI but Ed I guess thinks they'll be low and optimists high. I'm not sure he'd even be up on the concept of discounted future cash flows.
It's difficult to trust the viability of this when the amount of money that it needs to generate as revenue is in the "several trillions" ballpark just for "break-even".
If you assume that this will be "industrial revolution" situation... maybe? It doesn't help if this happy scenario takes 30 years to materialize. The money needs to be there by sometime in the next few years.
Also, every risky bet has a happy scenario that if successful, all the gamblers become gorillionaires. In the happy scenario, every GME hodler would have wife-changing money by now, with their shares in Gamestop worth infinite dollars.
I don’t trust someone who is dumb enough to think LLMs aren’t useful at all.
Of course, he may just be deceiving himself or his audience about this belief. I don’t think he is actually dumb. But this alternative is equally problematic.
This is a guy that comes purely from the financial angle as has no obvious ideological stance in being either pro or against AI. Also pretty balanced in his delivery.
Some numbers he brings up should make even AI hypers question the sanity of this whole thing.
The thing about "hyping AI way beyond its capabilities" is that the future capabilities will no doubt be greater than the current ones so they may just be talking about the future a bit.
There's a bit of a tipping point in usefulness between AI being a bit worse than humans and a bit better, like for mathematical theorems that's probably happened where being not very good was kind of useless and just recently they are proving lots of things. That will probably gradually happen in other fields creating a lot of economic value.
- AI may speed up on improvements and be a singularity moment, truly a new industrial revolution.
- AI may have only incremental improvements in the next few decades with diminishing returns.
- AI improvements may plateau and fizzle out.
All those are possible scenarios, and if you dig you may find evidence and historical precedence for all of those. I don't think making wild bets that can tank the whole economy based on a FOMO-fueled prediction that everything will work out in a best-case scenario is healthy.
I see your point but there's been a Moore's law like trend in compute/dollar that's progressed steadily for about a century and has a very high probability of continuing. How that maps into AI products is a bit uncertain but there's definitely a trend in that direction.
As an example of the predictability, Hand Moravec wrote quite a well argued paper in 1989 predicting human level hardware capabilities would be available in inexpensive machines around the mid 2020s which I think was fairly spot on. He also argued once those capabilities were there, software guys would figure things to use if for.
But why do you think everyone in AI is hyping it beyond its capabilities? That's a specific San Francisco-driven AGI cult and a handful of annoying billionaires. I'm doing what Patrick Boyle said is the biggest use case: running a one person consultancy on $400/month of AI services. It's working far better than I expected. And if the rates go up too much down the road, I'll pivot to running locally.
I suppose if you still consume influencer content, it's pretty bleak slop right now too, but then there are occasional slopcore geniuses that manage something entertaining so I say let the future work itself out. No worries, it will.
As for the sanity of the gold rush phase of anything... Are you kidding me? Really...
The global GDP annually is ~$120T. $2T is not that big a number at that scale. It's interesting that the critics stick to the domestic tech GDP when the global tech GDP is ~$20T to insist AI hitting $2T annually is impossible.
The problem of money mattering more when you are younger is something that often appears in personal finance discussions.
One thing is consumption but another are opportunities to invest in yourself.
There is case for not saving at all when you are young (because there are always good way the money can be spent).
Here is some good discussion that touches on it (and other FIRE related topics):
>>A more modern approach instead “re-solves” each spot to a limited search depth and uses a neural network as an approximation function at the depth cutoff. Both tabular (e.g. Piosolver) and neural (e.g. GTOWizard) commercial solvers are available.
PioSOLVER doesn't use any abstractions or cutoff functions. It just solves the whole game without any simplifications other than allowed bet sizes.
The cost is rather large RAM requirements. The advantages is that it's very precise and produces exact results for every hand (it doesn't bundle them).
Yeah but that doesn't work for any kind of performant code which is the reason people who write those data structures use unsafe.
This is one very annoying thing about Rust community. The language sucks for coding self-referencing data structures with unpredictable free patterns. This is a fact and the reason number of people on this very forum posted long articles about moving away from Rust for those purposes.
Your "actually you can" post is just misleading and will result in more people who will get burnt but the design of the language.
No, you really can. You can use GC crates and the performance will be like Java, or you can use Rc and the performance will be like Swift. The only reason Rust people use unsafe for data structures (and they do not always do) is that for them, Java/Swift-level performance is just not enough.
> No, you really can. You can use GC crates and the performance will be like Java
It won't be anywhere near Java's. Those GCs are mark-and-sweep collectors. Java uses moving collectors. Moving collectors are used to avoid the high overheads of malloc/free in the C runtime (or of any free-list-based mechanism). They're a performance optimisation. Heap allocations in Java behave more like arenas than like heap allocations in languages with non-moving memory management, whether it's C, Rust, Python, or Go. Other runtimes that use moving collectors are Google's V8 and Microsoft's .NET, except that Java's ZGC has no GC pauses.
I'm well aware. I don't know a moving GC crate for Rust, but I do know that building a safe moving GC crate for Rust is possible, using the same principles as existing GC crates. It will not be exactly as performant as Java, because you don't have compiler support for updating pointers, but it will almost be - pointers inside the data structures can be updated via derive, the only pointer that cannot is the pointer to the data structure itself, so you will need to heap-allocate the data structure (the GC root). Given that in Java everything is under indirection anyway, this will have the same efficiency or even better.
> I don't know a moving GC crate for Rust, but I do know that building a safe moving GC crate for Rust is possible, using the same principles as existing GC crates.
But those pointers would not interoperate easily with code that does not expect them. Of course you could effectively "host" a moving GC world inside Rust (or C++, or C), just as you could host the entire JVM in a Rust program (or vice-versa, host a Rust program in a Java program), but the effectiveness and attractiveness of that depends on interoperability with existing libraries.
Java's FFM also lets you bring your own memory management strategies, but the interop with existing types is not transparent (i.e. while you can put a manually-managed object that implements a Map or a List interface in the manually-managed portion, you cannot let that Map or List store arbitrary Java objects).
So there can be interfaces that connect a world of moving pointers and a world of non-moving ones (that's what FFM is), but then the interop between them is pretty much the same as FFM, i.e. the interface between Java and C. That's not really "in the same language".
> Given that in Java everything is under indirection anyway,
I don't know what that means. References in Java are implemented as pointers (some GCs use free bits for some stuff). Maybe you mean that Java doesn't yet have types that are flattened into their container, but it will soon: https://openjdk.org/jeps/401 (this is only the first step). Indeed, that was the last gap that could still allow me to match or beat Java's performance even in some large programs (provided they matched a domain where this was important, and there are certainly some). With that gap closing, the number of large programs where I, an experienced C++ programmer, could even match Java's performance without extraordinary effort is getting very, very, very small.
>>, and that gives an approximate value of how using specific languages maps into monetary loss, and why companies are starting to care nowadays, given computers are always exposed to the world network.
You need also factor development time and ease of finding developers willing to work in a specific language. There are other factors like readability of the code (very verbose languages are likely to be worse) and cost of maintenance - languages forcing a lot of abstractions are likely much worse.
If you just meant apple-targeting developers, then yeah; you're right that those languages are in decline. But if you meant developers in general, I think you'd be surprised how many growth sectors are hiring C programmers. They're often not SaaS tech companies, but they are massive and many are growing. Hardware, industrial control systems, defense/aerospace ... there's a ton there, the spaces in which they hire just don't overlap a ton with the spaces frequented by hacker news. Also, a lot of them aren't US based companies.
I hope that changes over time, since I definitely agree that the downsides of C-family languages massively outweigh the downsides of competitor languages.
Which is why WG14 and WG21 caring about security would be quite relevant, but alas, priorities.
C could have gotten slices already in the 90's, the concept already existed in other languages, and even Dennis Ritchie made a fat pointer proposal into that sense.
The others, let see if anything related to profiles actually gets into C++29.
Citation needed. I don't think there's a correlation there. Over-architected Java spaghetti is verbose and unmaintainable. Under-architected Perl code golf that metastisized is terse and unmaintainable.
> languages forcing a lot of abstractions are likely much worse
Citation needed. C++ has had some very high-level abstractions on top of a low-level runtime for awhile, and plenty of people have decided to use it and hire for it regardless. What counts as an "abstraction" or "forced abstraction" is a very very subjective topic.
Even C can be super abstracted, see early 1980-90's business software written in C, with nice stuff like Yourdon Structured Method, leading to over-architected C spaghetti with macros, a decade before Java came to be.
The problem is the lack of interest since Morris worm came to be, to provide better mechanisms in said languages, until governments and key big tech names decided it was time to change existing practices.
Imo when you start thinking about it the most reasonable position is that corporate income tax should be 0. Instead we should focus on consumption taxes, land taxes and taxing other resources and especially pollution.
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