IMF Warns Global Economic Resilience at Risk if AI Falters
- Reference: 0180614476
- News link: https://slashdot.org/story/26/01/19/1423221/imf-warns-global-economic-resilience-at-risk-if-ai-falters
- Source link:
> Risks to global economic expansion were "tilted to the downside," the fund said in an update to its World Economic Outlook, arguing that growth was reliant on a narrow range of drivers, notably the US technology sector and the associated equity boom.
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> Nonetheless, it predicted US growth would strongly outpace the rest of the G7 this year, forecasting an expansion of 2.4 per cent in 2026 and 2 per cent in 2027. Tech investment had surged to its highest share of US economic output since 2001, helping drive growth, the IMF found.
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> "There is a risk of a correction, a market correction, if expectations about AI gains in productivity and profitability are not realised," said Pierre-Olivier Gourinchas, IMF chief economist. "We're not yet at the levels of market frothiness, if you want, that we saw in the dotcom period," he added. "But nevertheless there are reasons to be somewhat concerned."
[1] https://www.ft.com/content/2af4d92a-452c-4d35-ab55-3afce930f98a
BS (Score:3)
The only think that will happen is a few large corps will make a huge loss, some may even go out of business and stock markets may wobble for a few days. The rest of the world will just move on. This wouldn't be the same as the crash of 2008 when various financial instruments the banks had created and mutually invested in that kept the financial system moving failed. Any AI crash will be very limited in scope.
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Losses like these are always pushed down to the consumer somehow.
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You say lots in a few words, and correctly frame recent USA history. Biden did it, Clinton did it, Bush(s) did it .... Trump allows it. USA gov [ nominally that's citizenry ] takes on financial risk while banks and auto companies and data-aggregators live fat. My paleo-(re)publican values are sorely tested by nominally traitorous behavior of American merchantilists. Where is Sulla ( or Perot ) when we really need him ?
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My understanding is that large banks are bankrolling the "AI Boom", the tech bro's are not using their own money to build things out.
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The banks generally cover any loans pretty well these days. They'll probably get the server farms and real estate they're sitting on if any of these companies go under.
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How much will that server farm be worth in 2 years?
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The real estate - a lot, and given the dearth of GPUs and RAM thanks to all these server farms being built the equipment will be worth quite a lot too.
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Why will people buy two-year-old hardware if new hardware is available? There'll be uses for it, but it will have to be priced to compete and there'll be a significant cost in taking that RAM and those GPUs out of the servers and putting them on ebay.
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2 year old top of the range GPUs and RAM will do very nicely thank you for plenty of other tasks. Do you think when they upgrade their servers the old ones just get binned?
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This thread started because someone said banks would be fine because they can repo the server farms when the bubble bursts.
Those server farms will be worth a fraction of what the bank lent the company to buy them.
Even if they can somehow manage to sell them for 75% of what they paid, with these companies talking about borrowing trillions of dollars to build these places, that would mean losses to the banks of many hundreds of billions of dollars. And in the real world they'll be lucky to get 50%.
I'm really
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> The banks generally cover any loans pretty well these days.
Not really. Even before 2008, the game was to securitize loans and get the paper out the door as fast as possible. A few banks got caught (Washington Mutual) with garbage on their books. What the banks had (and still have) is the unhedged product of this securitization, traded by the likes of Lehman Brothers. Smart firms like Goldman Sachs had already covered their downsides, even as they kept selling the garbage.
It's time for people to attend shareholders meetings and ask how much AI, data center, GPU and
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One would hope, but right now datacenters are entirely responsible for US GDP growth. If they collapse, the impact will be massive.
Re: BS (Score:2)
Have you seen the size of it?
There ain't no country that can survive a TARP that big.
Maybe next time... (Score:3)
Maybe next time figure out if something has a use before devoting a good chunk of world assets to it hoping that it has one. How can it do anything other than falter?
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It's all money magic. There's zero tether between a companies tech or it's performance and any stock price, gov programs, WB initiatives, etc. The only reason for any of these projections is to steer public perception of markets, so that there seems to be justified and dudiligent allocation of funds to these projects/initiatives. 'If ai doesn't succeed...' isn't a projection, it's a threat, a signal, a command to throw more money at this or else.
Too big to fail (Score:2)
now were have I heard that before ?
Lose-Lose (Score:2)
"There is a risk of a correction, a market correction, if expectations about AI gains in productivity and profitability are not realised,"
So if the economy isn't destroyed by AI taking everyone's job, it will be destroyed by AI NOT taking everyone's job.
its always been a bubble (Score:2)
I still dont understand why people got so bought-in to this "AI" boom, and the insane levels of over-investment with no horizon of return.
Yes its neat stuff.... some mild improvements in machine translation. Some big improvements in word salad and image salad generation... assuming you dont re-use the outputs as inputs, and have a use for such scraps. some mild improvements in pattern recognizes. And thats out it.
Why didnt people lose their minds for OCR or spell-checkers, which are similar levels of techno
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> I still dont understand why people got so bought-in to this "AI" boom, and the insane levels of over-investment with no horizon of return.
Our rulers have been dreaming of replacing all of us with machines for hundreds of years, and now they believe they have their chance.
Everything else must be sacrificed to bring that dream to fruition.
Blockchain, crypto, NFTs, AI (Score:3)
The 2020s have been a suckers paradise so far.
Re: its always been a bubble (Score:2)
Concentration of capital, socialization of losses and privatization of gains.
The last (as in low taxes and exorbitant returns with no relationship to actual contribution) create the illusion in people they are prescient and always right.
The one in the middle dissociates them from any negative feedback.
The first gives them power.
So, when cuckerberg decides he'll double down on his illusion of "AGI" there's noone who can tell him he's wrong.
Incidentally, it is the same in politics now. Nobody told Biden he s
No, we got by without AI before (Score:2)
We will be fine without AI.
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We will. But the IMF has loaned so much on this garbage, they may have to stop lending for actual viable projects.
Resilience cannot be "at risk" (Score:2)
Resilience is what you do for risk management.
So to summarise... (Score:2)
So the IMF has just basically said "keep giving the techo bros we hold shares in $100billions a year in funding for something that will never turn a profit because if you don't it'll make us poor when the whole house of cards comes crashing down."
How myopic. (Score:2)
I'm not surprised surprised; but it seems interesting how the IMF is treating 'AI' as so banal that the outcome where the dumbasses betting the house on it don't get the payoff they are hoping for is the risky one; rather than the outcome where it does what its enthusiasts claim it can do being the risky one.
Given our perennial inability to keep the risk investors pose properly restricted to them I don't doubt that they'll find ways to make their mistakes everybody's problem; but the alternative, in the
We're already in a recession (Score:1)
A deep one and pretty bad. We were already still on shaky ground when Trump started his trade War and that basically wrecked the global economy. Having him constantly threatening to invade countries including NATO allies doesn't help either.
Billionaires are hoping AI will replace all the workers and consumers that they are currently dependent on. Basically the death of capitalism without socialism. Because of that they're spending hundreds of billions of dollars ramping up to build the AI That's going t
Is this as stupid as it sounds? (Score:2)
Does 'resilience' have some economics-specific meaning that makes this statement less stupid? In normal usage 'resilience' is the ability to resist or recover from a certain amount of interference or adverse events; and for that purpose resilience was threatened at the point where people started making massive bets on the same bucket of very tightly correlated risks. If all those bets happen to pay off people won't necessarily have to think about how brittle the situation was; but that's not the same thing
Davos (Score:2)
I've gotta be honest; whatever the Davos or Club for Growth (or whatever the fuck the cabal of global financiers is called today) insists we do, my instinct is to do the opposite.
The amount of time the media whinges about 1%ers and financial concentration and inequality, then CHEERFULLY reports what these the 0.00001%ers say "we should do" is fucking crazy.
The only people actually "getting something" out of what this band of sociopaths recommends are the highest-priced EU prostitutes working Davos during th
World Bank/IMF (Score:2)
It's interesting that the World Bank on the one hand is promoting the following:
This is why the World Bank Group is focused on doing development right: resilient, fiscally sound, efficient, and built to last: smart development. We are supporting our clients to achieve their smart development goals, which include meeting their own Nationally Determined Contributions (NDCs). This includes projects that are building resilience, or that are managing emissions responsibly.
[1]https://www.worldbank.org/en/t... [worldbank.org] ...whi
[1] https://www.worldbank.org/en/topic/climatechange/overview
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Too many of their investors are in the bubble.
Smart policy would be to slow it and pace it.
Corruption is how we get bubbles, and reality is how we get pops.