I would challenge that a little bit -- I think it is a good thing, given that they have open-sourced the results of the project.
It seems to me to be far better than a company which simply gives 0.1% of US GDP back to shareholders in the form of dividends or stock buybacks, which is a very common occurrence given the size of companies nowadays. Or worse, a company which spends 0.1% of US GDP manufacturing things that are wholly useless or even actively damaging to consumers, the environment, etc.
> It seems to me to be far better than a company which simply gives 0.1% of US GDP back to shareholders in the form of dividends or stock buybacks, which is a very common occurrence given the size of companies nowadays.
The whole point of investing in companies is for those companies to eventually give the shareholders more resources back than they put in. [0] Those shareholders can then consume those resources, or invest them in something else; like eg startups that pursue new technologies.
Returning capital to shareholders is exactly how investing works and how it has to work. Otherwise it would be charity, which is also fine, but it's something different.
Are you also against companies paying back debt, instead of endlessly rolling over one loan into another loan and paying interest only with money from new loans? (If not, how is that different?)
[0] On average, and in expectation. Investing in risky endeavours means that sometimes they fail, and you get less or no money back.
No, I don't have a problem in general with returning capital to shareholders. I'm not making an anti-capitalist argument here. I'm saying. For humanity, net good.
Facebook could do a stock buyback with all of that H100 money. It's a significant amount of money. As a human, complete non facebook shareholder except in ETFs, I would rather they buy H100's and train huge neural nets and then release them for free. Maybe I've bought the kool-aid but I think I believe that Zuckerberg genuinely wants to move humanity forward with this one (of course, it's also a business move). A lesser chairman of the board would have not spent huge capex on GPUs, and instead simply issued a fat dividend or what have you to shareholders who eventually would buy a newer nicer house in Marin or whatever. And indeed, it's only Zuck's unique position with preferential shares that allows him to do this; at a different company, he'd have been shot down and dividends it would be.
On the whole, which is better? What moves the needle in terms of bringing humanity forward?
And this is kind of true of companies in general. "Returning money to shareholders" is not created equal, even though it's all money in the end. Sports betting companies are also returning basis points of GDP to shareholders. Is that a worthwhile thing to do? Net good? (Please, dear reader, do not make the argument that sports betting is actually a good thing because hey we all make free market choices.)
Well, I don't particularly like sports betting, but it doesn't seem worse than any other form of entertainment. Titanic had a 200 million dollar budget in the 1990s to produce about 444,600 movie frames and a bit of sound. Was that a good use of resources?
Though to come back to the main argument: you seem to be comparing Apples to Oranges here?
So the first thing is: how are those companies making money? That could be via Facebook ads, or via sports betting, etc. The second question is: what are those companies doing with the money. That could be investing in eg training neural nets, or returning it to shareholders.
When you invest money, that's the same as spending resources. That's only worthwhile, when in expectation you get sufficiently more resources out later than you put in now.
In contrast, when you return money to shareholders, no resources have been spend. It's up to the shareholders what they want to do with their 'resource-coupons' (ie their money).
From the point of view of Facebook, dividends vs investment both look like spending money. From the point of view of the economy, the former is a mere transfer of resources, the latter is spending of resources.
(You could argue that it's better in some sense for Mr Zuckerberg to control these resources than for the average investor to have that control. I'm sympathetic to that argument, especially if you carefully state what sense you have in mind.)
> On the whole, which is better? What moves the needle in terms of bringing humanity forward?
Dividends only move money around. They don't move the needle one way or another. It depends on what the shareholders are doing with the money.
Btw, Amazon and Tesla show that 'the markets' can be extraordinarily patient with companies that they believe in. It's just that most managers don't have nearly as much charisma. Anyone can (and does!) say they have great long term plans, but it's hard to tell the charlatans from the true visionaries. So as a safe default, markets often prefer hard-to-fake signs of progress, like dividends.
> Well, I don't particularly like sports betting, but it doesn't seem worse than any other form of entertainment. Titanic had a 200 million dollar budget in the 1990s to produce about 444,600 movie frames and a bit of sound. Was that a good use of resources?
Sports betting is non-productive, money goes into a sink and gets absorbed without production. The production of Titanic had to hire hundreds to thousands of professionals through multiple companies to produce something, those people and businesses get paid and spend it back in the general economy (both to produce their product and the surplus that gets generated goes back into investments for the next project).
Productive activities are always much better for society than non-productive ones like sports betting.
When you get some money, it doesn't really matter whether you spend it or put it under your mattress or even burn it. If you remove it from circulation, your central bank will just print more money to hit their inflation targets.
(Of course, your central bank doesn't check in your garden whether you buried some money. They follow price and spending statistics in aggregate.)
If you dig up your money, the central bank will print less money or even remove money from circulation by selling assets from their balance sheet.
It does make some difference whether you consume or invest. But that's because of a difference in how resources are used.
If you burn your money in a big fire, that's approximately equivalent to a donation to your central bank. If you bury it, and dig it up ten years later, that's approximately equivalent to an interest free loan to your central bank.
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Production isn't useful by itself. Production is what we do to enable consumption. We don't need to worship production nor put it on a pedestal.
Both sports betting and producing the Titanic spends some resources to entertain people. If sports betting spends less resources for each unit of entertainment, that would be great. (In a competitive market, that would drive down the cost of sports betting, eg bookies would compete by offering tighter spreads or more exciting bets or whatever. Alas, I don't know enough about sports betting to tell what people find enticing about it.)
But the resources spend on both running the sports betting systems and on producing Titanic are gone. Those work hours of those thousands of professionals that worked on Titanic don't come back. They are a cost, not a benefit.
> But the resources spend on both running the sports betting systems and on producing Titanic are gone. Those work hours of those thousands of professionals that worked on Titanic don't come back. They are a cost, not a benefit.
Isn't velocity of money a question in this though? The spending on producing Titanic pours the money into pockets (workers and businesses) who will spend it faster into the larger economy (consumption/hiring others to do projects) than what the sports betting company will, the spending from the wages of those workers will, on average, be more diluted into other productive means which will support other businesses and workers. In my view this is a more beneficial way for society than the accumulation of the same capital into a sports betting company, while betting has many more negative impact to society (addiction, for example) than watching Titanic has.
> Isn't velocity of money a question in this though?
No, that's pretty much irrelevant. I was giving an example of someone digging a hole to dump their money in. That money's velocity would be pretty much zero. The central bank will just print more money to make up the shortfall.
It's the same, but less extreme, if velocity falls to eg half of what it was instead of zero: the central bank notices that inflation is below target, and prints more money.
The net result is that the overall nominal (!) spending in the economy is whatever the central bank wants it to be. For that total nominal (!) spending figure, decisions by individual economic actors are pretty much irrelevant; because there's a control system with a negative feedback loop.
But there is probably better ecosystem effects to filming the Titanic compared to increased sports betting. The derivative economies from the Titanic is probably bigger.
>(You could argue that it's better in some sense for Mr Zuckerberg to control these resources than for the average investor to have that control. I'm sympathetic to that argument, especially if you carefully state what sense you have in mind.)
It is better for Zuckerberg to control those resources, indeed that's what I'm saying. He famously has special shares that give him outsized control over how facebook spends its money. And he was famously punished by the street -- that disastrous Meta earnings in 2021 when zuck decided to invest huge capex in GPUs. A normal company would not have made a move like that, they would have issued dividends with the money instead.
What I'm saying is, that's a good thing. Markets aren't perfect (they are actually pretty f!@#@$ dumb, especially about what a GPU was worth in 2021, and about what sports betting is worth today). I'm making a value judgement.
FB shareholders would have spent that 2021 dividend on ice cream or a remodel in Marin, and it's better for all of us that in 2021 they were forced by zuck to go without the ice cream and the remodel. Because we all got a free 400B param neural net. Humanity did.
The shareholders normally just reinvest the dividends. That isn't bad for the economy.
> manufacturing things that are wholly useless
Companies manufacture things that people want to buy. Presumably those people find the things useful. Companies that manufacture things people don't want go out of business.
The point is not that lots of companies run around making things people don't want and go bankrupt.
The point is that's what would happen, and because of that, companies focus on making things people actually do want.
Look at what happened the Facebook stock over the last few years as they rebranded to Meta and started spending wildly. The market whipped them into shape, and rewarded them handsomely.
Very well, Sears Roebuck is an even better example then even if it did not file for bankruptcy because it went from cornerstone of US culture to practically "went out of business."
they've open sourced a babble-bot that allows any individual to sockpuppet infinite identities, I have a hard time seeing how the impact will be positive
It seems to me to be far better than a company which simply gives 0.1% of US GDP back to shareholders in the form of dividends or stock buybacks, which is a very common occurrence given the size of companies nowadays. Or worse, a company which spends 0.1% of US GDP manufacturing things that are wholly useless or even actively damaging to consumers, the environment, etc.