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The Trillion-Dollar AI Bet
There are bubbles of excess and bubbles of pure betting; some bubbles are both
LONDON, England — The year is 1845, and coal smoke drifts through the narrow streets, clinging to wool coats and horsehair. It blackens the windows of busy dockyards and distilleries, and settles on the newly laid railway tracks. The OpenRailway Company has just signed a contract with Parliament worth £4 million. Pioneer of a new type of track that requires half the number of human workers per mile — a rate that falls further the longer the line — the OpenRailway Company promises speed, efficiency, and lower costs. There’s only one caveat, which they call “stochasticity,” a harmless irregularity that may result in modest diversions, gentle delays, or the occasional creative reinterpretation of a passenger’s intended destination. Surely a minor inconvenience to pay in exchange for a bright future!
That, of course, didn’t happen. But picturing the existence of a stochastic railway company is a good perspective to reframe what I can only describe as the biggest news this year coming from the AI industry: OpenAI has struck a five-year $300 billion cloud computing agreement with Oracle (starting 2027) and sealed a partnership under which Nvidia will invest up to $100 billion in its AI infrastructure. The whole tech sector is betting on the economic…
