[PrairieFire]

agree the capital could be put to better use, however I believe the alternative is this capital wouldn't have otherwise been put to work in ways that allow it to leak to the populace at large. for some of the big investors in AI infrastructure, this is cash that was previously and likely would have otherwise been put toward stock buybacks. for many of the big investors pumping cash in, these are funds deploying the wealth of the mega rich, that again, otherwise would have been deployed in other ways that wouldn't leach down to the many that are yielding it via this AI infrastructure boom (datacenter materials, land acquisition, energy infrastructure, building trades, etc, etc)

[amanaplanacanal]

It could have, though. Higher taxes on the rich, spend it on social programs.

[ayaros]

Why is this so horrible. Put more resources in the hands of the average person. They will get pumped right back into the economy. If people have money to spend, they can buy more things, including goods and services from gigantic tax-dodging mega-corporations.

Gigantic mega-corporations do enjoy increased growth and higher sales, don't they? Or am I mistaken?

[phkahler]

Let's pay down the debt before increasing social programs. You know, save the country first. If a penny saved is a penny earned then everyone -rich or poor- is looking for a handout.

[Atheros]

> likely would have otherwise been put toward stock buybacks

Stock buybacks from who? When stock gets bought the money doesn't disappear into thin air; the same cash is now in someone else's hands. Those people would then want to invest it in something and then we're back to square one.

You assert that if not for AI, wealth wouldn't have been spent on materials, land, trades, ect. But I don't think you have any reason to think this. Money is just an abstraction. People would have necessarily done something with their land, labor, and skills. It isn't like there isn't unmet demand for things like houses or train tunnels or new-fangled types of aircraft or countless other things. Instead it's being spent on GPUs.

[PrairieFire]

Totally agree that the money doesn’t vanish. My point isn’t “buybacks literally destroy capital,” it’s about how that capital tends to get redeployed and by whom.

Buybacks concentrate cash in the hands of existing shareholders, which are already disproportionately wealthy and already heavily allocated to financial assets. A big chunk of that cash just gets recycled into more financial claims (index funds, private equity, secondary shares, etc), not into large, lumpy, real world capex that employs a bunch of electricians, heavy equipment operators, lineworkers, land surveyors, etc. AI infra does that. Even if the ultimate economic owner is the same class of people, the path the money takes is different: it has to go through chip fabs, power projects, network buildouts, construction crews, land acquisition, permitting, and so on. That’s the “leakage” I was pointing at.

To be more precise: I’m not claiming “no one would ever build anything else”, I’m saying given the current incentive structure, the realistic counterfactual for a lot of this megacap tech cash is more financialization (buybacks, M&A, sitting on balance sheets) rather than “let’s go fund housing, transit tunnels, or new aircraft.”