π Faster, Please! Week in Review #52
Goldman Sachs thinks about AI; small nuclear reactors; radical life extension; and much more!
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Melior Mundus
In This Issue
Essay Highlights
β How a Wall Street megabank is thinking about AI
β How small nuclear reactors fit into my pro-progress Up Wing visionβ What would be the impact of an AI boom on interest rates and inflation?
Best of 5QQ
β 5 Quick Questions for ... energy expert Adam Stein on nuclear energy regulation
β 5 Quick Questions for β¦ Rob Atkinson on the CHIPS and Science Act, industrial policy, and AIBest of the pod
Essay Highlights
π¦ How a Wall Street megabank is thinking about AI
We would all love to know if generative artificial intelligence, or GenAI, will turn out to be mere bubbly fizzle, a historic general-purpose technology, or somewhere in between. That question is explored in the new Goldman Sachs research compendium, βGenerative AI: hype, or truly transformative?β I think something real is happening, and itβs going to a wild ride. But the key caveat is that big economic impacts will take time, even if they come sooner than with some previous GPTs. Among the insights in that GS report:
Evidence suggests GenAI is not following the typical tech hype cycle of extreme excitement followed by deep disillusionment.
While the number of monthly active users of ChatGPT has scaled βfaster than anything weβve ever tracked,β people are still using traditional search engines as much as before. βSo, weβre still quite a while away from AI technology having real effects on the consumer application front.β
The broad adoption of generative AI could potentially increase overall labor productivity growth in the US by around 1.5 percentage points annually.
β How small nuclear reactors fit into my pro-progress Up Wing vision
AI/machine learning/generative AI and nuclear fission/fusion represent two kinds of general-purpose technologies β indeed, smarts and energy may be the ultimate GPTs β that are combinatorial technologies with each other, augmenting each other. Progress multipliers, if you will. This symbiotic effect, especially with GPTs, is a key component of my three-dimensional Up Wing Vision (rising above mere Left and Right) of a more abundant and prosperous future for humanity. But just as the combinatorial effects of AI smarts and nuclear energy are embraced by my Up Wing Vision, one could see those effects rejected by those with a degrowth, anti-progress Down Wing Vision. From that perspective, any technology that promotes greater consumption of the finite resources of Spaceship Earth must be opposed. Itβs not hard to imagine the AI doomers joining forces with the anti-nuke environmentalists to form a broad new Down Wing front, all sharing a devotion to the safety-first, βmother may I?β precautionary principle.
π What would be the impact of an AI boom on interest rates and inflation?
Generative AI could boost productivity and economic output through two main channels. First, by making cognitive or knowledge workers more efficient, GenAI would directly increase output. Second, and more significantly, if cognitive workers are more efficient at innovation, they will be able to invent new things and discover new ways of doing things, which will lead to faster productivity growth in the future. What, then, might be the impact on interest rates and inflation? A new report from JPMorgan looks at that issue: βIn sum, the productivity effect of AI should probably increase real interest rates, but the income distribution and demographic effects could provide a partial offset such that the increase in real interest rates is less than one-to-one with respect to trend GDP growth. β¦ Connecting the real and inflationary developments suggests that AI could have an ambiguous influence on nominal interest rates over shorter-run horizons but increase far-forward nominal interest rates.β
Best of 5QQ
π‘ 5 Quick Questions for ... energy expert Adam Stein on nuclear energy regulation
Adam Stein is the director of the Nuclear Energy Innovation program at the Breakthrough Institute.
Why are there no small modular reactors running in the US today? Is it about the technology or the regulation?
Depending on how you define "small modular reactor," there are hundreds running in the US right now: on military sites. They power all of our subs and our aircraft carriers. However, regulations through the NRC for licensing new designs are challenging. The regulations were intended for very large light-water plants like Vogtle and not for very different technologies, which is what most SMRs are. Licensing new SMRs is challenging both for the developer and for the NRC itself internally, because they have to justify why the new applications deserve exemptions from the existing regulations. In short: It's for many reasons, but regulation is definitely one big component of it.
π‘ 5 Quick Questions for β¦ Rob Atkinson on the CHIPS and Science Act, industrial policy, and AI
Robert D. Atkinson is founder and president of the Information Technology and Innovation Foundation.
Call it industrial policy, call it a national competitiveness strategy: How close is what we've seen from the Biden administration to the sort of agenda you've been advocating for a number of years?
First of all, I hate the term βindustrial policyβ because it means so many different things to so many different people. To start with, what I think we need is a strategy for the US that supports having advanced industry competitiveness globally. We can't afford to not have aerospace or biotechnology or AI. We just have to have good capabilities in the US for certain industries. A strategy can include a lot of market-friendly thingsβlet's not have stupid regulations, let's have a good tax code that supports investmentβbut also includes other things that perhaps some free-market conservatives would have a little more problem with.
How much has Biden done? Not to say Biden didn't do anything, but most of what was done was really in Congress. Letβs be honest. The CHIPS and Science Act was a congressional initiative. The Biden administration actually didn't do all that much to push it. They did some, but at the end of the day when push came to shove, this was really a congressional initiative, largely pushed by Senator Schumer and Senator Young and others. The CHIPS Act was Cornyn and Warner and others. How much of the Democrats done? They've done a lot. Although they had some Republican support.
I think the other thing that's important to recognize is that the Biden administration has two missions, if you will. One of them is the same mission we were just talking about: helping advanced industries have value-added independence. The other is a much more of an equity agenda and a green agenda. The Inflation Reduction Act was really about that with clean energy. It was less about competitiveness, although certainly it will do that. But it was much more about advancing a green tech agenda.
And then even when you look at some of the provisions in the in the CHIPS and Science Act, they were trying to fuse in an equity agenda into that. So semiconductor factories have to have daycare centers. There's no stock buybacks. And I think that was a huge mistake for a lot of reasons. But one is politically, if we ever want to do this kind of thing again, I think a lot of Republicans are going to be, βFool me once, shame on you. Fool me twice, shame on me.β They're going to be like, βHey, you didn't say this was going to be a social agenda last time, and now it is. Why are we going for this again?β Yes, the Biden demonstration has done some things, but it was principally Congress.
Best of the pod
Lionel Shriver is a columnist for Britain's Spectator magazine. Her books include We Need to Talk About Kevin and Should We Stay or Should We Go. Her recent cover essay for National Review is βThe Modern Quest for Immortality.β
In that National Review essay, you write that youβre more interested in expanding the human healthspan than the human lifespan. Extending our healthy years but not necessarily delaying death seems like a very different project.
Yes. And I try to make the distinction between different projects. A lot of the Silicon Valley people are looking at longevity from the perspective of, βLet's cure death. Let's basically try to live forever.β But a much more modest group of people, and more practical, are looking at not necessarily living any longer, but living well longer. And I'm very sympathetic with that project. I'm like anyone: I don't fancy falling apart, and I would rather keep my wits about me and still be able to totter out on the tennis court and then preferably drop dead on the baseline one day. And that would be that. That's a laudable goal. And if we can get closer to that, we'd save ourselves a fortune.
When we talk about the Silicon Valley quest to cure death, does this really all come down to a fear of death by people who maybe donβt hold traditional religious views of the afterlife? Or do they want to live longer so they can, I donβt know, start more companies? Whatβs the motivation here?
I drew that distinction in the essay. There are two different things that might motivate you to extend life as long as possible. And one of them is clearly fear of death. We don't know what happens. I have my suspicions β you're not there anymore. And it's possible that the actual experience of death is not that bad, although the lead-up can be pretty grim. But the other thing that might motivate you is appetite, is desire, is wanting more. And that is something I am sympathetic with. I admire people who generate enthusiasm for living, for everything that it offers, for relationships, for love, even for another good glass of red wine. That is a positive motivation for this kind of research, which is going on all over the place. There's a lot of money being thrown at it. And I admire that. I think one of the questions you have to ask yourself in this whole life extension thing is, how much appetite would I have for continuing to be here? How many years does it prospectively give me joy to get up in the morning? And what would I be looking forward to? Is there any point at which you've just had enough red wine? (A prospect I find almost unfathomable.)