Derek Thompson

Like I could imagine like if, maybe if like Michael Semblist was on this call, he'd say, look, these companies have more free cashflow than any group of companies in the history of modern capitalism.

They can withstand enormous, enormous amounts of infrastructure spending for years and years, and they'll still be highly profitable because they're fundamental business models, whether it's ad sales or whatever collection of businesses you could say Microsoft is in.

They can withstand an enormous hit to their balance sheet.

They are withstanding it right now.

That's number one.

And number two, maybe this technology is closer to

a breakthrough that will yield significant income than you and I think at the moment, right?

Like right now, when I think about like how open AI makes money, you know, they've made money from subscriptions, they make money from their business relationships, but maybe they're on the cusp of something that's like about to become like a $100 billion annual business, in which case, of course, that's going to pay for all of their investment in training and inference.

What's the most likely way that you're wrong?

Tell me how I mischaracterized his argument.

Based on the math that you're describing, when is it reasonable to think that some kind of break could appear in the system?

You can't look at it right now and say, oh, things are starting to break.

It seems like it's basically status quo.

But when you look at the amount of free cash flow that these biggest companies have and their spending levels on infrastructure and the fact that they're going to have to buy essentially each generation of GPUs every two to three years in order to stay up to the frontier, when does the math stop making sense for you?

And not to blend subject matter here, but two years from now, you're going to have the debates, the Democratic primary for president.

And two and a half years from now, you are in the middle of the 2028 election cycle.

So I think the interaction effect between an AI bubble beginning to pop and the 2028 election could certainly put us in line for quite a chaotic news cycle in 2028.

I want to end on a positive note because I think you, like I, do see this technology as akin to the railroads and broadband in that it's almost certainly in a bubble dynamic now, but predicting that something is a bubble is not the same as predicting that it will have no effect in the world.

I think that this is probably going to end up being...

Conclusively and definitively, the most important technology of, let's say, the 2030s, where are you most bullish on or interested in the application of AI at the moment?