[HN Gopher] Hyperscalers have already outspent most famous US me...
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Hyperscalers have already outspent most famous US megaprojects
Author : nowflux
Score : 92 points
Date : 2026-04-17 16:23 UTC (6 hours ago)
(HTM) web link (twitter.com)
(TXT) w3m dump (twitter.com)
| metalman wrote:
| we, the people, are the ultimate mega project, and it's showing
| timmg wrote:
| This tweet shows it as a percentage of US GDP:
|
| https://x.com/paulg/status/2045120274551423142
|
| Makes it a little less dramatic. But also shows what a big **'n
| deal the railroads were!
| chromacity wrote:
| But doesn't that overstate it in the other direction? Talking
| about investments in proportion to GDP back when any estimate
| of GDP probably wasn't a good measure of total economic output?
|
| We're talking about the period before modern finance, before
| income taxes, back when most labor was agricultural... Did the
| average person shoulder the cost of railroads more than the
| average taxpayer today is shouldering the cost of F-35? (That's
| another line in Paul's post.)
| bombcar wrote:
| That's the problem with going too far using "money" or "GDP"
| - you can roughly compare the WWII 45% of GDP spent with
| today - https://www.davemanuel.com/us-defense-spending-
| history-milit... because even by WWII much was
| "financialized" in such a way that it appears on GDP (though
| things like victory gardens, barter, etc would explicitly NOT
| be included without effort - maybe they do this?).
|
| As you get further and further into the past you have to
| start trying to measure it using human labor equivalents or
| similar. For example, what was the cost of a Great Pyramid?
| How does the cost change if you consider the theory that it
| was somewhat of a "make work" project to keep a mainly
| agricultural society employed during the "down months" and
| prevent starvation via centrally managed granaries?
| helterskelter wrote:
| You don't even need to go that far back to run into issues,
| when I read Pride and Prejudice, I think Mr. Darcy was one
| of the richest people in England at around PS10,000/year,
| but if you to calculate his wealth in today's terms it
| wasn't some outrageous sum (Wikipedia is telling me
| ~PS800,000/year). The thing is that the economy was totally
| different back then -- labor cost practically nothing, but
| goods like furniture for instance were really expensive and
| would be handed down for generations.
|
| With PS800K today, you may not even be able to afford the
| annual maintenance for his mansion and grounds. I knew
| somebody with a biggish yard in a small town and the garden
| was ~$40K/yr to maintain. Definitely not a Darcy estate
| either.
|
| Thinking about it, an income of PS800K is something like
| the interest on PS10m.
| somenameforme wrote:
| The big change is the end of any sort of backing in
| money. The Minneapolis Fed calculated consumer price
| index levels since 1800 here. [1] Of course that comes
| with all the asterisks we're speaking of here for data
| going back that far, but their numbers are probably at
| least quite reasonable. They found that from 1800 to 1950
| the CPI never shifted more than 25 points from the
| starting base of 51, so it always stayed within +/- ~50%
| of that baseline. That's through the Civil War, both
| World Wars, Spanish Flu, and much more.
|
| Then from 1971 (when the USD became completely unbacked)
| to present, it increased by more than 800 points, 1600%
| more than our baseline. And it's only increasing faster
| now. So the state of modern economics makes it completely
| incomparable to the past, because there's no precedent
| for what we're doing. But if you go back to just a bit
| before 1970, the economy would have of course grown much
| larger than it was in the past but still have been
| vaguely comparable to the past centuries.
|
| And I always find it paradoxical. In basic economic terms
| we should all have _much_ more, but when you look at the
| things that people could afford on a basic salary, that
| does not seem to be the case. Somebody in the 50s going
| to college, picking up a used car, and then having enough
| money squirreled away to afford the downpayment on their
| first home -- all on the back of a part time job was a
| thing. It sounds like make-believe but it 's real, and
| certainly a big part of the reason boomers were so out of
| touch with economic realities. Now a days a part time job
| wouldn't even be able to cover tuition, which makes one
| wonder how it could be that labor cost practically
| nothing in the past, as you said. Which I'm not disputing
| - just pointing out the paradox.
|
| https://www.minneapolisfed.org/about-us/monetary-
| policy/infl...
| psychoslave wrote:
| ~PS800,000/year when compared to median value in current
| UK? Outrageous is relative sure, but for most people out
| there it should be no surprise they would feel that as an
| outrageously odd distribution of wealth.
|
| https://en.wikipedia.org/wiki/Income_in_the_United_Kingdo
| m
| bombcar wrote:
| The point is that ~PS800,000/year is high, even possibly
| "very high" but it is not "most wealthy man in Britain"
| high, and certainly nowhere near "hire as many people as
| worked for Darcy".
| cm2012 wrote:
| Its more like making 800k per year today in India, where
| a lot of people make much less so you can have servants
| zozbot234 wrote:
| Newsflash, old antique furniture from around that time is
| _still_ really expensive even today. It was a hand-
| crafted specialty product, not run-of-the-mill IKEA
| stuff. If you compare the prices of single consumer goods
| while adjusting for inflation, they generally check out
| at least wrt. the overall ballpark. The difference is
| that living standards (and real incomes) back then for
| the average person were a lot lower.
| chaos_emergent wrote:
| I posted just that on the Twitter feed but then I realized
| that railroad started at the beginning of an industrial
| revolution where labor was a far larger portion of GDP
| compared to industrial production. So it kind of makes sense
| that the first enabling technology consumed far more GDP than
| current investments do, even on a marginal basis.
| topspin wrote:
| The F-35 case is interesting. Lockheed Martin can, given peak
| rates seen in 2025, produce a new F-35 approximately every 36
| hours, as they fill orders for US allies arming themselves
| with F-35's. US pilot training facilities are brimming with
| foreign pilots. It's the most successful export fighter since
| the F-16 and F-4, and presently the only means US allies have
| to obtain operational stealth combat technology.
|
| What that means for the US is this: if the US had to fight a
| conventional war with a near-peer military today, the US
| actually has the ability to replace stealth fighter losses.
| The program isn't some near-dormant, low-rate production deal
| that would take a year or more to ramp up: it's a operating
| line at full rate production that could conceivably build a
| US Navy squadron every ~15 days, plus a complete training and
| global logistics system, all on the front burner.
|
| If there is any truth to Gen Bradley's "Amateurs talk
| strategy, professionals talk logistics" line, the F-35 is a
| major win for the US.
| palmotea wrote:
| > Lockheed Martin can, given peak rates seen in 2025,
| produce a new F-35 approximately every 36 hours ... it's a
| operating line at full rate production that could
| conceivably build a US Navy squadron every ~15 days, plus a
| complete logistics and training system, all on the front
| burner.
|
| That's amazing. I had no idea the US was still capable of
| things like that.
|
| I wonder if there's a way to get close to that, for things
| that _aren 't_ new and don't have a lot of active orders.
| Like have all the equipment setup but idle at some
| facility, keep an assembly teams ready and trained, then
| cycle through each weapon an activate a couple of these
| dormant manufacturing programs (at random!) every year,
| almost as a drill. So there's the capability to spin up,
| say F-22 production quickly when needed.
|
| Obviously it'd cost money. But it also costs a lot of money
| to have fighter jets when you're not actively fighting a
| way. Seems like manufacturing readiness would something an
| effective military would be smart to pay for.
| topspin wrote:
| "I had no idea the US was still capable of things like
| that."
|
| It's more than just the US though. It's the demand from
| foreign customers that makes it possible. It's the
| careful balance between cost and capability that was
| achieved by the US and allies when it was designed.
|
| Without those things, the program would peter out after
| the US filled its own demand, and allies went looking for
| cheaper solutions. The F-35 isn't exactly cheap, but
| allies can see the capability justifies the cost. Now,
| there are so many of them in operation that, even after
| the bulk of orders are filled in the years to come,
| attrition and upgrades will keep the line operating and
| healthy at some level, which fulfills the goal you have
| in mind.
|
| Meanwhile, the F-35 equipped militaries of the Western
| world are trained to similar standards, operating similar
| and compatible equipment, and sharing the logistics
| burden. In actual conflict, those features are
| invaluable.
|
| There are few peacetime US developed weapons programs
| with such a record. It seems the interval between them is
| 20-30 years.
| rickydroll wrote:
| Now let's talk about the 155mm artillery shells
| topspin wrote:
| Sure. Heavy industry. It's important. Maybe don't send it
| all to Asia because it's dirtier than software and
| finance.
| peyton wrote:
| We do--our automotive assembly lines. F-22 is more of a
| deterrent. If we need more, it's failed.
| j-bos wrote:
| As sibling comments mentioned deceptive comparison as well. How
| about comparing in percentage of Gross Energy Output.
| https://www.sciencedirect.com/science/article/abs/pii/S09218...
| dghlsakjg wrote:
| The railroads and the interstate are arguably the biggest and
| broadest impact, especially in 2nd order effects (everything
| West of the Mississippi would be vastly different economically
| without them).
|
| I am not an ai-booster, but I would not be surprised at AI
| having a similar enabling effect over the long term. My caveat
| being that I am not sure the massive data center race going on
| right now will be what makes it happen.
| operatingthetan wrote:
| >I am not an ai-booster, but I would not be surprised at AI
| having a similar enabling effect over the long term. My
| caveat being that I am not sure the massive data center race
| going on right now will be what makes it happen.
|
| Maybe? It seems as if the tech is starting to taper off
| already and AI companies are panicking and gaslighting us
| about what their newest models can actually do. If that's the
| case the industry is probably in trouble, or the world
| economy.
| throwaway27448 wrote:
| Is there really that much inefficiency in our distribution of
| goods and services such that AI _could_ have this much
| impact?
| fyrn_ wrote:
| I think the bet is more labor replacement, not saying
| that's particularly reasonable either
| delecti wrote:
| I agree that AI will probably have bigger effects that we
| could possibly predict right now. But unlike past
| booms/bubbles, I suspect the infrastructure being built now
| won't be useful after it resolves. The railroads, interstate
| system, and dotcom fiber buildout are all still useful. AI
| will need to get more efficient to be useful as established
| technology, so the huge datacenters will be overbuilt. And
| almost none of the Nvidia chips installed in datacenters this
| year will still be in use in 5 years, if they're even still
| functional.
| whattheheckheck wrote:
| All of the trucks and carts and tools to build the
| railroads dont exist anymore. Just like the gpus wont
| either
| crote wrote:
| > I would not be surprised at AI having a similar enabling
| effect over the long term.
|
| The big difference is that the current AI bubble isn't
| building _durable_ infrastructure.
|
| Building the railroads or the interstate was obscenely
| expensive, but 100+ years down the line we are still
| profiting from the investments made back then. Massive
| startup costs, relatively low costs to maintain and expand.
|
| AI is a different story. I would be _very_ surprised if any
| of the current GPUs are still in use only 20 years from now,
| and newer models aren 't a trivial expansion of an older
| model either. Keeping AI going means continuously making
| massive investments - so it better finds a way to make a
| profit _fast_.
| tripletao wrote:
| This seems to show the railroads peaking around 9% of GDP.
| While that's lower than some of the other unsourced numbers
| I've seen, it's much higher than the numbers I was able to find
| support for myself at
|
| https://news.ycombinator.com/item?id=44805979
|
| The modern concept of GDP didn't exist back then, so all these
| numbers are calculated in retrospect with a lot of wiggle room.
| It feels like there's incentive now to report the highest
| possible number for the railroads, since that's the only thing
| that makes the datacenter investment look precedented by
| comparison.
| manquer wrote:
| GDP adjustments are warranted, but it is more stark than both
| the estimates suggest.
|
| The megaprojects of the previous generations all had decades
| long depreciation schedules. Many 50-100+ year old railways,
| bridges, tunnels or dams and other utilities are still in
| active use with only minimal maintenance
|
| Amortized Y-o-Y the current spends would dwarf everything at
| the reported depreciation schedule of 6(!) years for the GPUs -
| the largest line item.
| therein wrote:
| I really dislike the term hyperscaler. Comes off very insincere.
| They came up with it themselves, didn't they? What's the official
| definition supposed to be now? Companies that are setting up as
| many GPU/TPU server clusters as possible for a demand that's yet
| to exist?
| bombcar wrote:
| It always makes me think of a hyperactive toddler running
| around in circles, which oddly fits most thought leaders who
| use the term.
| lenerdenator wrote:
| That's not fair to the toddlers; their crap tends to be
| safely contained in a diaper as opposed to their heads.
| cidd wrote:
| Nobody really uses the term in the Valley except probably
| C-level people talking to Wall street investors.
| coffeefirst wrote:
| I have concluded the entire public discourse surrounding AI has
| no relationship to real stuff that you can go, test, and point
| at.
|
| There's a loop of everyone is saying stuff because everyone
| else is saying stuff that turns into a sort of reality inspired
| fan fiction.
|
| It's not just that it's wrong or imprecise, that I expect, it's
| that the folklore takes on a life of its own.
| mikrl wrote:
| Superscaler sounds too much like superscalar...
| rcxdude wrote:
| Hyperscale exists as a term pre-LLM-hype. It mainly exists to
| describe the kind of datacenteres that companies like google
| and amazon have been building for at least a decade now: very
| large, very highly integrated and customised hardware, with a
| focus on cloud deployment and management strategies. This is to
| distinguish from just a large datacenter built with commodity
| server parts from a set of vendors (i.e. the kinds of servers
| 99% of people will be able to lay their hands on. Another way
| to put it is that if you're not writing your own BIOS/BMC/etc,
| you're probably not hyperscaling).
| lukeschlather wrote:
| This seems like a total category error. The Railroads are the
| only example that actually seems comparable, in being an
| infrastructure build out that's mostly done by a variety of
| private companies. Examples of things that would be worth
| comparing to the datacenter boom are factory construction and
| utilities (electrification in the first half of the 20th century,
| running water, gas pipes.)
| stefan_ wrote:
| "Infrastructure build out"? Everything put into these
| datacenters is worthless well before 10 years have gone by.
|
| We aren't even getting infrastructure out of it, they are just
| powering it with gas turbines..
| jeffbee wrote:
| This isn't true and you can easily prove it to yourself by
| renting a Sandy Bridge CPU or a TPUv2 from Google today.
| jeffbee wrote:
| The other categorical error is that the American people paid
| the railroads a monumental subsidy to get the job done. We gave
| them almost 10% of the territory.
| lenerdenator wrote:
| Given the size of some of these data centers, the incentives
| packages that local governments often give their developers,
| and the impact on the electric grid that can, in some cases,
| raise costs for other ratepayers, I'd say the comparison
| could be similar.
|
| The one Google's putting in KC North is 500 acres [0] and
| there were $10 billion in taxable revenue bonds put up by the
| Port Authority to help with the cost.
|
| This for a company that could pay for that in cash right now.
|
| [0] https://fox4kc.com/news/google-confirms-its-behind-new-
| data-...
| jeffbee wrote:
| That's the opposite of a subsidy. KC stakes nothing of
| value and gets a defined revenue for the next 25 years.
| lenerdenator wrote:
| Then why would Google mess with the bonds _at all_?
|
| Again, they have the cash to buy that land and develop it
| without any further consideration beyond permits and
| planning.
| therobots927 wrote:
| The problem is that once built, railroads provided economic
| value right off the bat.
|
| I would love to hear about the economic value being generated
| by these LLMs. I think a couple years is enough time for us to
| start putting some actual numbers to the value provided.
| lukeschlather wrote:
| Equating this buildout with LLMs is also a category error.
| Waymo (self-driving cars) depends on the same infrastructure,
| and there are a variety of other robotics programs which are
| actually functioning, you can see them in operation. They all
| require a lot of GPUs to train and run the models which
| operate the robotics.
| therobots927 wrote:
| What % of GPUs are running self driving software or
| robotics?
|
| And what is the ROI on either of those right now?
| lukeschlather wrote:
| The answers to both of those questions are pretty guarded
| trade secrets. Amazon and Google are very profitable
| companies and I would not bet on them investing all this
| money without real use cases where profit is likely.
| Amazon is adding thousands of new robots to their
| factories every year.
| throwaway27448 wrote:
| It's not clear that Waymo _is_ an improvement over existing
| infrastructure so much as ensuring that fewer humans
| benefit from each car ride (which was already pathetically
| low).
| JumpCrisscross wrote:
| > _once built, railroads provided economic value right off
| the bat_
|
| If they were laid on a sensible route, completed on budget
| and time, and savvily operated. Many railroads went bust.
| 0xbadcafebee wrote:
| Fwiw, Railroads were the reason for some of the biggest bank
| collapses in history. Panic of 1873 was literally called "The
| Great Depression" (until a _greater_ depression hit). 20 years
| later was the Panic of 1893. Both were due to over-investment
| and a bubble bursting, and they took out tons of banks and
| businesses.
|
| We're seeing exactly the same thing with AI, as there is
| massive investment creating a bubble without a payoff. We
| _know_ that the value will lower over time due to how software
| and hardware both gets more efficient and cheaper. And so far
| there 's no evidence that all this investment has generated
| more profit for the users of AI. It's just a matter of time
| until people realize and the bubble bursts.
|
| And when the bubble does burst, what's going to happen? Most of
| the investment is from private capital, not banks. We don't
| know where all that private capital is coming from, so we don't
| know what the externalities will be when it bursts. (As just
| one possibility: if it takes out the balance sheets of
| hyperscalers and tech unicorns, and they collapse, who's
| standing on top of them that collapses next? About half the S&P
| 500 - so 30% of US households' wealth - but also every business
| built on top of those mega-corps, and all the people they
| employ) Since it's not banks failing, they probably won't be
| bailed out, so the fallout will be immediate and uncushioned.
| keeda wrote:
| _> We 're seeing exactly the same thing with AI, as there is
| massive investment creating a bubble without a payoff.
|
| ...
|
| And so far there's no evidence that all this investment has
| generated more profit for the users of AI._
|
| If you look around a bit, you will find evidence for both.
| Recent data finds pretty high success in GenAI adoption even
| as "formal ROI measurement" -- i.e. not based on "vibes" --
| becomes common: https://knowledge.wharton.upenn.edu/special-
| report/2025-ai-a... (tl;dr: about 75% report positive RoI.)
|
| The trustworthiness, salience and nuances of this report is
| worth discussing, but unfortunately reports like this gets no
| airtime in the HN and the media echo chamber.
|
| Preliminary evidence, but given this weird, entirely
| unprecedented technology is about 3+ years old and people are
| still figuring it out (something that report calls out) this
| is significant.
| 0xbadcafebee wrote:
| 75% report positive ROI (and the VPs are much more
| "optimistic" than the middle managers who are closer to the
| work) - but how much ROI? 1%? The fact that they don't
| quote a figure at all is pretty telling. And that's the ROI
| of the people buying the AI services, which are often
| heavily subsidized. If it costs a billion dollars to give a
| mid-sized company a 1% ROI, that doesn't sound sustainable.
|
| I would love to see another report that isn't a year old
| with actual ROI figures...
| SlinkyOnStairs wrote:
| > The trustworthiness, salience and nuances of this report
| is worth discussing, but unfortunately reports like this
| gets no airtime in the HN and the media echo chamber.
|
| It honestly just isn't _that_ interesting. (Being most
| notable for people misunderstanding and misrepresenting the
| chart on page 46 of the report as being "ROI" rather than
| "ROI measurement")
|
| In terms of ROI figures, it's really just a survey with the
| question _" Based on internal conversations with colleagues
| and senior leadership, what has been the return on
| investment (ROI) from your organization's Gen AI
| initiatives to date?"_.
|
| This doesn't mean much. It's not even dubiously-measured
| ROI data, it's not ROI data at all, it's just what the
| leadership _thinks_ is true.
|
| And that's a worrying thing to rely on, as it's well
| documented (and measured by the report's next question)
| that there's a significant discrepancy in how high level
| leadership and low-level leadership/ICs rate AI "ROI".
|
| One of the main explanations of that discrepancy being
| Goodhart's law. A large amount of companies are simply
| demanding AI productivity as a "target" now, with
| accusations of "worker sabotage" being thrown around
| readily. That makes good economy-wide data on AI ROI very
| hard to get.
| wisemanwillhear wrote:
| For some reason this reminds me of people at work who walk up
| and say we did x bazillion things in n time, and then pause and
| expect us to express shock at how amazing that is and how much
| more productive they are than other teams. So what. Without a
| proper comparison to something equivalent I can't evaluate
| whether it's exceptional. I could treat each molecule as a
| thing and tell people how incredibly many things I eat on
| average per minute, but if I explain no one would find this to
| be exceptional.
| negura wrote:
| regardless, it's true that AI-related spending is the largest
| mobilization of capital in history
| kerblang wrote:
| Adjusted for inflation?
|
| edit - sorry, it is in fact adjusted, text is kinda hard to see
| anigbrowl wrote:
| It literally says 'Inflation-adjusted costs' on the right side
| of the graph, right under the main title, FFS.
| kerblang wrote:
| There's no need to be snide
| SpicyLemonZest wrote:
| Gentle reminder that the cost of producing well-formatted graphs
| is much, much lower than it used to be. We grew up in a world
| where the mere existence of this graph would prove that someone
| put a great deal of effort into making it, and now it does not. I
| have no specific reason to doubt the information, but if you want
| to have reliable epistemic practices, you can no longer treat
| random graphs you find on social media as presumptively true.
| pier25 wrote:
| https://xcancel.com/finmoorhouse/status/2044933442236776794
| losvedir wrote:
| Does anyone know what's included in "datacenter capex"? In
| particular, does that include spending for associated power
| generation? Because whether or not the AI craze pans out, if
| we've built a whole bunch of power plants (and especially solar,
| wind, hydro, etc) that would be a big win.
| measurablefunc wrote:
| You can't run a data center on solar or wind (even w/ batteries
| included). Everything they're building runs on gas & coal like
| what Musk got running for xAI.
| RealityVoid wrote:
| You can and _must_ if you want competitive costs. Musk
| famously overpaid in order to get speed of deployment.
|
| I was reading geohot's musings about building a data center
| and doing so cost effectively and solar is _the_ way to get
| low energy costs. The problem is off-peak energy, but even
| with that... you might come off ahead.
|
| And that dude is anything but a green fanatic. But he's a
| pragmatist.
| operatingthetan wrote:
| Is this an appropriate spend and risk? I'm starting to feel as if
| we have been collectively glamoured by AI and are not making
| sound decisions on this.
| theonemind wrote:
| It doesn't seem like it to me. I like watching Ed Zitron rant
| about it on YouTube. It's fun.
| mattas wrote:
| Is this _actual_ spend? Like dollars actually changing hands?
|
| Or is this "we said we are going to invest $X"? What about the
| circular agreements?
| cactacea wrote:
| Really shows where our priorities are at as a country. SMH
| throwaway27448 wrote:
| Further evidence that the US, for whatever reason, lacks basic
| ability to rationally use resources.
| guywithahat wrote:
| If you adjust for GDP railroads were much more expensive, and I
| don't think they're viewed as a mistake
| https://x.com/finmoorhouse/status/2044985790212583699?s=20
| ElevenLathe wrote:
| It's not totally clear that the gigantic push to run rail
| lines through undeveloped parts of North America "ahead of
| demand" for reasons of genocide (aka "white settlement"),
| especially the transcontinental routes, was the smartest
| investment, even leaving aside the horrific crime it
| represents. We probably would have gotten greater ROI
| connecting more developed places on a piecemeal basis and
| extending the rail network more slowly in the West (and
| probably even more rapidly in the developed East) instead of
| founding new towns along brand-new rail lines. There is a
| reason the federal government was so involved in the finance
| of these things: left alone, private Eastern capital would
| _not_ have done things the way they were done, which was
| chiefly to "open the frontier" aka accelerate the genocide.
|
| I certainly think it was a mistake.
| negura wrote:
| as of november last year, data centre capex was only 60% of their
| revenues. which provides the bussiness justification to increase
| investment further
| bawana wrote:
| only 20% of health care spending!
| amelius wrote:
| We could have had a space elevator by now.
| jgalt212 wrote:
| Just wait until the DAOs become agentic!
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(page generated 2026-04-17 23:00 UTC)