NOTE: People pointed out that it's $800 billion to cover interest, not $8 billion, as I wrote below. My mistake. That adds 2 more zeroes to all figures, which makes it a lot more crazy. Original comment below...

$8 billion / US adult adult population of of 270 million comes out to about $3000 per adult per year. That's only to cover cost of interest, let alone other costs and profits.

That sounds crazy, but let's think about it...

- How much does an average American spend on a car and car-related expenses? If AI becomes as big as "cars", then this number is not as nuts.

- These firms will target the global market, not US only, so number of adults is 20x, and the average required spend per adult per year becomes $150.

- Let's say only about 1/3 of the world's adult population is poised to take advantage of paid tools enabled by AI. The total spend per targetable adult per year becomes closer to $500.

- The $8 billion in interest is on the total investment by all AI firms. All companies will not succeed. Let's say that the one that will succeed will spend 1/4 of that. So that's $2 billion dollar per year, and roughly $125 per adult per year.

- Triple that number to factor in other costs and profits and that company needs to get $500 in sales per targetable adult per year.

People spend more than that on each of these: smoking, booze, cars, TV. If AI can penetrate as deep as the above things did, it's not as crazy of an investment as it looks. It's one hell of a bet though.

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rc1 2 hours ago | parent | next [-]

Nit: its $800 billion in interest, your comment starts with $8 billion

	▲	koliber 2 hours ago \| parent [-]
		right. My goof. That adds two more zeroes across all the math. More crazy, but I think in the realm of "maybe, if we squint hard." But my eyes are hurting from squinting that hard, so I agree that it's just crazy.

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2 hours ago | parent | prev | next [-]

[deleted]

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writebetterc 2 hours ago | parent | prev [-]

You're saying $8 billion to cover interest, another commenter said 80, but the actual article says ""$8 trillion of CapEx means you need roughly $800 billion of profit just to pay for the interest". Eight HUNDRED billion. Where does the eight come from, from 90% of these companies failing to make a return? If a few AI companies survive and thrive (which tbh, sure, why not?) then we're still gonna fall face down into concrete.

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koliber 2 hours ago | parent [-]

right. My goof. That adds two more zeroes across all the math. More crazy, but I think in the realm of "maybe, if we squint hard."

	▲	writebetterc 2 hours ago \| parent [-]
		I think it's the realm of maybe in Silicon Valley. That's 5000 dollars. Look at this statement: > Let's say only about 1/3 of the world's adult population is poised to take advantage of paid tools enabled by AI 2/3 of the world's adult population is between 15 and 65 (roughly: 'working age'), so that's 50% of the working world that is capable of using AI with those numbers. India's GDP per capita is 2750USD, and now the price tag is even higher than 5k. I don't know how to say this well, so I'll just blurt it out: I feel like I'm being quite aggressive, but I don't blame you or expect you to defend your statements or anything, though of course I'll read what you've got to say.