The prospectus of a company seeking to woo shareholders to invest their cash is normally filled with predictions of tremendous financial rewards and bright futures.
asserted
prospectus → seek → rewards
But reading the prospectus released this week by Anthropic, an AI company that is seeking to raise $US100 billion ($142 billion), something odd sticks out.
asserted
something → read → billion
The firm behind Claude warns potential investors they may never see their money again – because the world will have come to an end.
uncertain
world → warn → end
“Sufficiently advanced AI systems could … pose catastrophic or existential risks to humanity, particularly if such systems were misused, replicated, weaponised, or allowed to operate with a high degree of autonomy,” it noted.
uncertain
it → pose → autonomy
This is a company seeking to build advanced AI systems that proponents hope will transform how we work, save us from terrible diseases, resolve our deep environmental problems and improve the quality of our lives.
asserted
we → seek → lives
It just happens to come with a great big asterisk that boils down to this: in saving the world, we may accidentally destroy it.
uncertain
we → happen → it
The world is in the midst of an AI building boom that dwarfs anything it has seen over the past two centuries.
asserted
it → dwarf → centuries
This year alone, an estimated $1 trillion will be spent on data centres and the computer servers to fill them.
asserted
trillion → estimate → them
Australia is riding that boom.
asserted
Australia → rid → boom
Analysts from PwC estimate spending in this country on data centres could reach $157 billion by the turn of the decade and $342 billion by 2036.
uncertain
spending → estimate → 2036
If the boom actually accelerates, spending here could reach $428 billion or more than 10 per cent of GDP.
uncertain
spending → accelerate → GDP
It would easily eclipse the mining construction boom of the early 2010s.
asserted
It → eclipse → 2010s
The surge in AI-related construction has caught both the Reserve Bank and the federal Treasury by surprise.
asserted
surge → relate → surprise
In last year’s budget, Treasury had forecast non-mining investment to grow by just 1 per cent through 2025-26.
asserted
investment → forecast → 2025
It actually grew by 14 per cent thanks to the AI boom.
asserted
It → grow → boom
The scale of spending by AI-related companies is difficult to grasp, leaving many analysts to compare it with previous booms.
asserted
scale → spend → booms
Over the past two centuries, the largest construction booms in the United States have been the canals of 1836 and 1841, the railroads built between 1870 and 1890, the rollout of electricity between 1905 and 1925, the federal highway system established between 1956 and 1973 and the dotcom rush of the late 1990s and early noughties.
asserted
booms → build → 1990s
None of them come close to the AI building surge.
asserted
None → come → surge
Columbia University economist Stijn Van Nieuwerburgh last month estimated spending on AI infrastructure between 2025 and 2032 would amount to 3.63 per cent of US GDP.
asserted
spending → estimate → GDP
The largest company by value in the world is currently Nvidia, which produces graphics processing units, computer chips and other hardware vital to AI.
asserted
which → produce → AI
If Anthropic is successful in raising money from its public listing it will become the 20th business to be worth more than $US1 trillion.
asserted
it → raise → listing
Of the existing 19, 13 are directly plugged into the AI boom.
asserted
13 → exist → boom
AI companies are spending so much money because they believe this new technology will transform the economy and our lives.
asserted
technology → spend → economy
As Anthropic argued in its prospectus, the new technology may revolutionise “every area of human endeavour”, from physics and biology to economics and robotics.
uncertain
technology → argue → economics
Diseases such as Alzheimer’s and cancer may finally be cured, it said, while economic prosperity could accelerate and spread around the world.
uncertain
prosperity → cure → world
“We believe that AI is one of the most consequential technologies in human history,” it said.
asserted
it → believe → history
“If managed well, it could rapidly accelerate scientific innovation, greatly increase economic growth rates, bring cures for major diseases within reach and solve problems that have resisted generations of human effort.”
uncertain
that → manage → effort
Promised by AI, the future promised is, as the 1980s band Timbuk 3 famously noted in their one and only hit, so bright you’ve got to wear shades.
asserted
you → promise → shades
When people first saw Stephenson’s Rocket steam locomotive, some warned it would fail as the human body could not withstand travelling faster than 20 miles an hour.
uncertain
body → see → miles
Spending by IT companies on equipment – that is, computer servers and the like – has soared 220 per cent over the past 12 months.
asserted
that → soar → months
That type of spending is dragging resources away from other parts of the economy, be it workers or electricity.
asserted
it → drag → economy
Australia’s inflation figures this week provided an insight into how that fight for resources is playing out.
asserted
fight → provide → resources
Prices for games and hobbies soared by 15.5 per cent over the year to September, the fastest rate since the bureau started to separately track this sector in 1998.
asserted
bureau → soar → 1998
The surge is due to the world’s computer gaming companies fighting cashed-up AI firms for increasingly expensive computer chips.
asserted
surge → fight → chips
Between 2000 and 2025, the prices of computers have fallen by 91 per cent while their quality has improved.
asserted
quality → fall → cent
But over the past 12 months, prices for this equipment have climbed by 6.3 per cent.
asserted
prices → climb → cent
That’s the impact of AI right now.
asserted
That → ’ → AI
Investors have pushed up the value of AI-related companies in the hope that these firms will make enormous profits.
asserted
firms → push → profits
Reserve Bank assistant governor Brad Jones this week noted that the “exuberance” around tech companies was predicated on something that would be unparalleled in economic history.
“The earnings expectations for the US IT sector into perpetuity, beyond the next three years, up until recently, was running at about 45 per cent per annum forever,” he said.
asserted
he → note → annum
“Far be it for me to opine on whether that’s irrational or not, but clearly there was a lot of good news in the price.
asserted
that → opine → price
…and 44 more, not listed.
The Aporia
