There will be nobody left to spend money, just increasing corporate and ultra high wealth spend. The rest will be left with food and water.
We are destroying currently valuable jobs to allocate resources to electricity and silicon, concentrating wealth into 10 companies pockets.
I don't know what comes after, but when you combine this with the Iran war it's going to be closer to economic depression.
You start looking like South Africa, Brazil, India or other large economies with high concentration of wealth at the top.
I don't see any doom or gloom, but what I do see is that tech companies massively ballooned headcount, and are now scrambling to return to sustainable levels, using anything as an excuse in order to avoid saying "we exercised poor judgment in 2020-2023". It must be AI! It's blockchain! It's tariffs! It's global warming! The list of excuses goes on and on, but just look at what the headcount was for these companies in 2020, and think about whether it makes sense for them to add that many new people.
Management screwed up.
I guess you can take this as a harbinger of Total Collapse, but I don't think that's warranted. Oracle added 30,000 people since 2020 and they are now realizing that this was foolish, given that Oracle's primary source of revenue growth is hiking license fees for legacy products. They don't need 30,000 new people. They don't even need the 130,000 people they had in 2020.
Why? That's wasteful. The money for that should go to the shareholders, and the moocher problem will solve itself in a couple of weeks.
Now, the nature of AI is to change the balance of the labour trade. We have a notion of the “economic value of the average person” which is presently very high in the western world.
What happens when the median figure drops through 0 thanks to AI?
Do the remaining wealth owners share their wealth? How often does this occur in existing systems we can compare against?
The cost of primary resources to products also goes toward 0, perhaps this offsets the decreasing economic power of the average person. But what forces protect them if their bargaining power is lost?
I follow your extrapolation in the first part, but this is where you lost me.
Why is the Iran war guaranteed to have long-term net negative consequences? It seems far too early to predict the outcome with any kind of certainty.
Combine that with the fact that the war is being led by a senile idiot who is unable to articulate a strategic purpose for the war in the first place and being prosecuted by someone who thinks that war crimes are aspirational, and you begin to understand that there is actually little prospect of this being resolved anytime soon.
Iran can close the straight of hormuz as retaliation, and there really isn't anything that can be done about it except for invasion. Other countries have similar capabilities or can acquire them readily. If Cuba wanted to close the gulf in retaliation for a US attack - they could, Denmark could lock the north sea to US shipping and naval traffic etc. etc.
Before this step, we had non-existent money loaned to build datacenters powered by non-existent power infrastructure to support future load that will never exist, with guaranteed revenue from companies that do not, and will never be able to pay.
Previously, this was propped up with circular revenue and investment. Now it's going to be propped up by dismantling the US tech industry.
This does not end well.
But they are still a tech company. So it is likely that this will also affect tech workers.
How may companies are just some custom data collectors
You can continue , we are at double pivot now. Code is a commodity. Not oracle db , but oracle business department for sure . You can build the same on the fly and curated.
At the same time to support old system you need 10x less people .
It just takes a single surprise to shock the market into chaos. My timeline is before 2030.
That's the story for Wall Street. Oracle went on a huge run in the market, that it did not deserve, and they're going to attempt to hold on to as much of that gain as they can. Wall Street will applaud slashing jobs if you can give them a good reason for it (and sometimes with no reason at all).
Amazon, Meta, Apple, Nvidia, Microsoft, Google are producing $700+ billion per year in op income. They have nothing else to spend it on. They will continue to fund a gigantic AI build out.
It does end well eventually, just as the dotcom era build-out ended well over the following decades. It ends with continued US dominance. Yes, the dotcom era saw a crash. The build out continued.
Browsers? The US won.
Ecommerce? The US and China won.
Search? The US won. China didn't win the search war, Baidu was supposed to be a serious global challenger to Google, that was widely hailed across tech circles as a known fact - it was inevitable. Nope. Google won. And Europe never did field a competitor at all.
China didn't win the smartphone war. Apple and Google won globally. Apple has produced trillions of dollars in profit on the back of that fact.
Cloud? China didn't even come close globally. The US won without any challenge at all. Europe never showed up. But but but Hetzner.
China didn't win the GPU war. Nvidia has the market, at least for this decade. That will produce over one trillion dollars in profit in just the next five or six years.
China didn't win the AI war. It was OpenAI's ChatGPT that shocked the world and set everything in motion. Now the US has the top three models in GPT, Gemini and Claude. Europe? Not even in the running (although they'd like to believe they are).
This all ends with the US remaining on top, with China as its only real peer.
Europe? There is no Europe in the equation, just as there wasn't for cloud or mobile apps or smartphones or personal computing.
At a national security level, the department of defense has already war-gamed mass unemployment. The defense sector would already have projected when the unemployment would happen and at what rate, I’m saying this to imply they had AI and judged its trajectory rather quickly awhile ago.
Data centers WILL happen, mass unemployment WILL happen, simply because, smarter people made it, assessed it, cannot deny it, and a large scale paradigm shift is occurring.
The data centers WILL get built (because the country needs it, don’t worry about why), AND you WILL get fired. Please await further instructions, thank you.
Try to stay in the same spot, oh, Covid helped with that remote work thing huh? See, this won’t be as painful as everyone thinks, it’s a nice smooth transition.
Edit:
I just want to add, the DoD is not going to let tech companies control the infrastructure of data centers either, too much of a security risk. So yeah, you better believe secret govt money is going to finance all of it, just like highways.
You’re welcome, now you don’t have to speculate.
Edit: and how will these data centers be protected from people rioting against them because they can't afford bread?
However, I’ve already seen a CTO of a F100 company explicitly state that whether AI is driving efficiency or not, the capital investment, and more importantly, the promises of efficiency to investors will mean some people will be let go.
Efficiency is output/input. The input is easy to measure. It’s cost and in this particular case salaries.
Output is a lot harder to measure, which means it can be fudged easily.
So you cut the easily measurable inputs and inflate the easily manipulable output.
One could imagine the reverse would also be possible, where you maintain inputs but inflate the output, but there is an asymmetry where investors will reward you for cutting costs even if there are no efficiency advantages that makes cutting inputs more sellable than inflating outputs.
First and foremost, this is about Oracle. For the short period I worked there, my impression about culture and tech was: mediocre. Not excellent, not poor but just a around average.
Which raises the question: why is it such a successful company commercially? I believe it's being ruthless to customers, employees and suppliers combined with cooking the financials.
Which bring me to your remark about output being difficult to measure. Imho Oracle had been exceptionally good at manipulating and obfuscating their output. And this was true long before AI came to the scene.
That seems like an insane gamble to me. Lay off all the workers now and hope that AI can deliver on its promise to replace them some time in the indeterminate future.
It will be another dependency for all companies to bear. Hopefully significant gains for humanity, tbd
Sometimes I feel like the only person left who remembers the pre-dotcom vibe. OpenClaw etc. should have set off alarms that we are back in the land of the Quick and the Dead.
This is why they landed one of the mega cybersecurity companies (the one who's name starts with C) as well as a globally distributed ridesharing businesses with sweetheart terms.
Oracle Cloud already represents 50% of Oracle's total revenue, and the AI story helps them justify that capex needed to fund their pivot into becoming a hyperscaler.
All of the current GPU investments are gonna hit zero, and probably a lot faster than the companies buying them realise. Definitely a lot faster than the investors realise.
I'd settle for some free 80GB A100 cards! ($7,000 2nd hand on ebay right now)
Compute in DCs already have an accounting lifespan of 3 years. The current trend of investments is a mix of expansion and well as upgrades on existing capacity.
This is why hyperscalers like Amazon, Microsoft, and GCP invested in inference ASICs a couple years ago, so they could migrate a larger mixture of their compute to these and offer services at better margins.
I was thinking any breakthrough in hardware (e.g. spintronics etc.), even if just partially effective, means all of this hardware would need to be replaced.
Infinite exponential growth is something we ALL "believe" in when we put a dollar into savings and expect to get a dollar and 5c out the next year.
The problem to me seems more that we tie all sorts of OTHER structural societal constructs to this one. To the degree that if we want to feed ourselves, clothe ourselves, and ensure shelter and security for ourselves and our loved ones - those basic _biological_ needs shared by most moderately sophisticated mammals - we are forced to plug into this system and ensure it delivers on its promise.
I've incorporated that infinite growth expectation into my kid's education plans, into our family retirement plans.
This is not a they issue, this is a we issue. The systemic structure is some parts organic but many parts choice and belief driven by general people on the street.
Oracle is using AI as a way to justify their pivot into becoming a Tier 1 Hyperscaler - Oracle Cloud now represents 50% of Oracle's overall revenue.
Becoming a hyperscaler is expensive (compute is pricey and a massive fixed cost), and by building an AI Infra story, Oracle can make a valid case as to why I should give Oracle money to expand their DC capacity.
Additionally, OCI has been landing marquee logos like a major cybersecurity company who's name starts with C and a global rideshare platform, and is taking advantage of enterprise customers who are price sensitive or investing in a secondary cloud provider to reduce vendor dependency.
OCI's infrastructure design is just good enough to work well enough most of the time, and you can't get cheaper.
I mean what do you expect them to do, I'm sure the OracleDB exodus has been long ongoing and they probably saw the writing on the wall years ago
Also Oracle is owned by Larry Ellison and hes in a competition with the other tech bros.
No. AI will BE your business software
Regulatory capture to manufacture a monopolistic position is what many are planning. As gambling with other peoples money still has few fiscal consequences (see 2008), but will hurt Americans when the bubble implodes.
Note more cheap energy for home users typically means higher standards of living, and the Westinghouse electric economic cycle from the 1950s is now broken. Data centers are consuming the community infrastructure equity, and it will cost voters sooner or later.
Individuals can't stop trends, but one may profit from the predictable nature of both the unscrupulous and hapless. "Bulls make money, bears make money, pigs get slaughtered" as they say on wall-street. =3
"Memoirs of extraordinary popular delusions and the madness of crowds" (Charles Mackay, 1852)
https://www.gutenberg.org/files/24518/24518-h/24518-h.htm
"A Day in the Life of an Ensh*ttificator "
I don't even know what that company does. I'm sure it's valuable for a reason, just never understood what they do.
Edit: Google says they sell Database software. OK.
A database, plus American SAP, plus a sort of also-ran AWS-type thing, plus the sad remains of Sun, is about it.
Absolutely terrible products to work with both from a user and developer standpoint, but once they are up and running they are built like tanks.
I think you are about to see what post-AGI economics really looks like and it is not good at all.
So-called "AGI" has been hijacked and it isn't what you think it is.
https://www.reuters.com/business/oracle-plans-thousands-job-...
Ellison has borrowed money against $80 billion of his shares:
https://www.reuters.com/business/oracle-plans-thousands-job-...
Banks are getting nervous. The reaction of a psychopath would be to fire people so Ellison can pursue his AI fever dreams. Due to abnormal wealth concentration and total lack of common sense there is nothing to stop anyone should they go senile or insane.
The risk for the entire economy and the job market is immense.
Sell your ORCL while you can, folks
