Tyler Cowen

Well, if I saw, for instance, real interest rates make a big leap upwards for some reason other than higher budget deficits, I would think, oh, the market's telling us something.

And then I would change my mind.

Real interest rates are up a bit.

It's probably mostly because of higher U.S.

government borrowing.

A modest amount of it is probably from higher CapEx expenditures coming from the AI sector.

And that does reflect higher growth prospects for the future.

It just does not seem extraordinary in terms of, you know, predicted impact.

Well, if there's much higher productivity, whether coming from AI or something else, people want to invest a lot more money in whatever is being productive.

So partly they're borrowing money.

The demand for capital is higher.

The opportunity cost of capital is higher because it could be used for more energy for AI or for the AI itself.

And all that will mean higher real interest rates.

And I expect that to some degree.

It just seems to me within a quite manageable level of change.

Well, the first GPT-4, that was my first moment.

It's like, whoa.

Now, much earlier, I had moments in my history with chess, which is extensive.

I saw the advancement of AI in chess, and I had many moments much earlier, you know, even before Deep Blue.

But, you know, thinking about large language models, GPT-4, O1 Pro, and now O3 have been my biggest moments.