Investor Paul Kedrosky counters Jevons paradox arguments regarding declining AI token prices on Big Technology Podcast.
Opinion
Kedrosky: AI infrastructure models based on labor TAM are ridiculous and speculative
“It's wrong to say, for better or worse, we're going to be putting in a trillion, therefore I need a hundred trillion out of this. That's not the way investors are looking at this, and it's, and it will lead you down the wrong path if you take that approach, be…”
Prediction Not checkable as stated
Kedrosky: Minimal model differentiation will crush AI investment returns
“The convergence means that the model differences while there are so minimal as I can't tell the difference in the kind of Pepsi Coke phenomenon, which again, to cut to the investment chase suggests that the competition then becomes much more about marketing ex…”
Insight
Kedrosky: Justifying AI spending with historical bubble theory drives dangerous overbuilding
“We've created this reflexivity. We're now, we justify overspending on the basis of prior overspending having worked out. Well, in prior episodes where that happened, people were not justifying the overspending by saying, say, in rural electrification, you know…”
Assertion Not checkable as stated
Kedrosky: AI investors pitch AGI to LPs but evaluate it as real estate internally
“Investors that I've talked to are very cynical, so they're perfectly happy to use that in front of their own LPs, but they don't believe that in house. They look at this very cynically and with very cold calculating eyes and compare it to other similar real es…”
Insight
Kedrosky: Recent AI gains stem from orchestration harnesses, not model breakthroughs
“So much of the improvement we've seen in the last 18 months has really been about the imposition of harnesses, effective nannies, sitting on top of bratty kids, and not about the actual structural improvements in the models themselves, and that's a sort of a h…”
Prediction Not checkable as stated
Kedrosky: OpenAI and Anthropic Will Earn Utility-Like Returns
“Like a power dam. I don't know who, I don't know where they are or who they are, but I guess they exist and they'll earn utility-like rates of return.”