Category: Web/Tech
Fast Grants it ain’t
In an interview with German business newspaper Handelsblatt, Calviño has emphasized a newfound willingness to embrace risk within the EIB’s financing strategies. The bank aims to process startup financing applications within six months, significantly improving from the current 18-month timespan. Calviño describes this accelerated timeline as a ‘gamechanger,’ pointing out that the high-paced nature of tech innovation requires nimble response times to keep up with market dynamics.
Here is the full document, I believe the European Investment Bank is (by far) the largest VC in Europe proper.
The most important decision of the Trump administration?
It is finally getting some publicity. Of course I am referring to the AI training deals with Saudi Arabia and UAE. Here is an overview NYT article, and here is one sentence:
One Trump administration official, who declined to be named because he was not authorized to speak publicly, said that with the G42 deal, American policymakers were making a choice that could mean the most powerful A.I. training facility in 2029 would be in the United Arab Emirates, rather than the United States.
And:
But Trump officials worried that if the United States continued to limit the Emirates’ access to American technology, the Persian Gulf nation would try Chinese alternatives.
Of course Saudi and the UAE have plenty of energy, including oil, solar, and the ability to put up nuclear quickly. We can all agree that it might be better to put these data centers on US territory, but of course the NIMBYs will not let us build at the required speeds. Not doing these deals could mean ceding superintelligence capabilities to China first. Or letting other parties move in and take advantage of the abilities of the Gulf states to build out energy supplies quickly.
In any case, imagine that soon the world’s smartest and wisest philosopher will soon again be in Arabic lands.
We seem to be moving to a world where there will be four major AI powers — adding Saudi and UAE — rather than just two, namely the US and China. But if energy is what is scarce here, perhaps we were headed for additional AI powers anyway, and best for the US to be in on the deal?
Who really will have de facto final rights of control in these deals? Plug pulling abilities? What will the actual balance of power and influence look like? Exactly what role will the US private sector play? Will Saudi and the UAE then have to procure nuclear weapons to guard the highly valuable data centers? Will Saudi and the UAE simply become the most powerful and influential nations in the Middle East and perhaps somewhat beyond?
I don’t have the answers to those questions. If I were president I suppose I would be doing these deals, but it is very difficult to analyze all of the relevant factors. The variance of outcomes is large, and I have very little confidence in anyone’s judgments here, my own included.
Few people are shrieking about this, either positively or negatively, but it could be the series of decisions that settles our final opinion of the second Trump presidency.
Addendum: Dylan Patel, et.al. have more detail, and a defense of the deal.
Early evidence on human + Ai in accounting
Here is part of the abstract:
Using a multi-method approach, we first identify heterogeneous adoption patterns, perceived benefits, and key concerns through panel survey data from 277 accountants. We then formalize these survey-based insights using a stylized theoretical model to generate corroborating predictions. Finally, partnering with a technology firm that provides AI-based accounting software, we analyze unique field data from 79 small-and mid-sized firms, covering hundreds of thousands of transactions. We document significant productivity gains among AI adopters, including a 55% increase in weekly client support and a reallocation of approximately 8.5% of accountant time from routine data entry toward high-value tasks such as business communication and quality assurance. AI usage further corresponds to improved financial reporting quality, evidenced by a 12% increase in general ledger granularity and a 7.5-day reduction in monthly close time.
By Jung Ho Choi and Chloe Xie, via the excellent Kevin Lewis.
How will AI change what it means to be human?
That is the topic of my latest piece at The Free Press, co-authored with Avital Balwit. Here is a segment written by Avital:
I was Claude pre-Claude. I once prided myself on how quickly I could write well. Memos, strategy documents, talking points—you name it. I could churn out 2,000 words an hour.
That skill is now obsolete. I can still write better than the models, but their speed far outmatches mine. And I know their quality will soon catch up—and then surpass—my own.
Every time I use Claude to do a task at work, I feel conflicted. I am both impressed by our product and humbled by how easily it does what used to make me feel uniquely valuable.
It’s not just an issue at work. Claude has injected itself into my home life, too. My partner is brilliant—it’s a huge reason we are together. But now, sometimes when I have a tough question, I’ll think, Should I ask my partner, or the model? And sometimes I choose the model. It’s eerie and uncomfortable to see this tool move into a domain that used to be filled by someone I love.
And a related bit written by me:
I have a tenured job at a state university, and I am not personally worried about my future—not at age 63. But I do ask myself every day how I will stay relevant, and how I will avoid being someone who is riding off the slow decay of a system that cannot last.
It amazes me how many people do not much ponder these questions. “Oh, it hallucinates!” is the fool’s trap of 2025, I am sorry to say.
The piece is about 4,000 words and has many interesting points throughout. Note that Avital is the Chief of Staff to the CEO at Anthropic, but her views do not reflect those of her company.
New AI and economics podcast
From Andrey Fradkin:
Seth Benzell and I have been working on a podcast about the economics of AI called Justified Posteriors, which may be of interest to you and your readers. We have episodes on topics such as the “The Simple Macroeconomics of AI” and the Anthropic Economic Index. The format is that we state our priors, read a paper, discuss it on the pod, and then update our priors.
Who wants impartial news?
The subtitle of the piece is Investigating Determinants of Preferences for Impartiality in 40 Countries, and the authors are Camila Mont’Alverne, Amy Ross A. Arguedas, Sumitra Badrinathan, Benjamin Toff, Richard Fletcher, and Rasmus Kleis Nielsen. Here is part of the abstract:
This article draws on survey data across 40 markets to investigate the factors shaping audience preferences for impartial news. Although most express a preference for impartial news, there are several overlapping groups of people who, probably for different reasons, are more likely to prefer news that shares their point of view: (a) the ideological and politically engaged; (b) young people, especially those who rely mainly on social media for news; (c) women; and (d) less socioeconomically advantaged groups. We find systematic patterns across countries in preferences for alternatives to impartial news with greater support in places where people use more different sources of news and that are ranked lower in terms of quality of their democracies.
Via Glenn Mercer.
Eric Topol invites me to his podcast
You will find it here, along with a transcript. Interesting throughout, here is one excerpt from me:
The AI is your smartest reader. It’s your most sympathetic reader. It will remember what you tell it. So I think humans should sit down and ask, what does the AI need to know? And also, what is it that I know that’s not on the historical record anywhere? That’s not just repetition if I put it down, say on the internet. So there’s no point in writing repetitions anymore because the AI already knows those things. So the value of what you’d call broadly, memoir, biography, anecdote, you could say secrets. It’s now much higher. And the value of repeating basic truths, which by the way, I love as an economist, to be clear, like free trade, tariffs are usually bad, those are basic truths. But just repeating that people will be going to the AI and saying it again won’t make the AI any better. So everything you write or podcast, you should have this point in mind.
And:
I’ve become fussier about my reading. So I’ll pick up a book and start and then start asking o3 or other models questions about the book. So it’s like I get a customized version of the book I want, but I’m also reading somewhat more fiction. Now, AI might in time become very good at fiction, but we’re not there now. So fiction is more special. It’s becoming more human, and I should read more of it, and I’m doing that.
Recommended.
Where did the Solow residual go?
As many people know, in 1987 Robert Solow quipped that “we see computers everywhere today but in the productivity statistics.” What few know is that the Nobel Laureate himself never was willing to use a personal computer. Even though he was still young in the 1980s and 1990s, he never used email. All of his correspondence was on paper, and he used a secretary to type his letters.
Here is more from Arnold Kling, mostly about AI: “The biggest barrier to using chatbots productively is lack of imagination. The only way to become adept at using them is to keep pushing your own envelope by trying to get help from them in novel contexts.”
How will AI affect cities and travel?
COWEN: In the 5 percent [economic growth] scenario — put aside San Francisco, which is special — but do cities become more or less important? Clearly, this city might become more important. Say, Chicago, Atlanta, what happens?
CLARK: I think that dense agglomerations of humans have significant amounts of value. I would expect that a lot of the effects of AI are going to be, for a while, massively increasing the superstar effect in different industries. I don’t know if it’s all cities, but I think any city which has something like a specialism — like high-frequency trading in Chicago or certain types of finance in New York — will continue to see some dividend from sets of professionals that gather together in dense quantities to swap ideas.
COWEN: Could it just be easier to stay at home, and more fun? I find I’m an outlier, but my use of AI — I either want to go somewhere very distant and use the AI there to learn about, say, the birds of a region, or I want to stay at home. It’s a barbell effect. The idea of driving 35 minutes to Washington, DC — that seems less appealing than it used to be.
That is from my Conversation with Jack Clark of Anthropic.
Jony Ive and Patrick Collison
My excellent Conversation with Jack Clark
This was great fun and I learned a lot, here is the audio, video, and transcript. Here is part of the episode summary:
Jack and Tyler explore which parts of the economy AGI will affect last, where AI will encounter the strongest legal obstacles, the prospect of AI teddy bears, what AI means for the economics of journalism, how competitive the LLM sector will become, why he’s relatively bearish on AI-fueled economic growth, how AI will change American cities, what we’ll do with abundant compute, how the law should handle autonomous AI agents, whether we’re entering the age of manager nerds, AI consciousness, when we’ll be able to speak directly to dolphins, AI and national sovereignty, how the UK and Singapore might position themselves as AI hubs, what Clark hopes to learn next, and much more.
An excerpt:
COWEN: Say 10 years out, what’s your best estimate of the economic growth rate in the United States?
CLARK: The economic growth rate now is on the order of 1 percent to 2 percent.
COWEN: There’s a chance at the moment, we’re entering a recession, but at average, 2.2 percent, so let’s say it’s 2.2.
CLARK: I think my bear case on all of this is 3 percent, and my bull case is something like 5 percent. I think that you probably hear higher numbers from lots of other people.
COWEN: 20 and 30, I hear all the time. To me, it’s absurd.
CLARK: The reason that my numbers are more conservative is, I think that we will enter into a world where there will be an incredibly fast-moving, high-growth part of the economy, but it is a relatively small part of the economy. It may be growing its share over time, but it’s growing from a small base. Then there are large parts of the economy, like healthcare or other things, which are naturally slow-moving, and may be slow in adoption of this.
I think that the things that would make me wrong are if AI systems could meaningfully unlock productive capacity in the physical world at a really surprisingly high compounding growth rate, automating and building factories and things like this.
Even then, I’m skeptical because every time the AI community has tried to cross the chasm from the digital world to the real world, they’ve run into 10,000 problems that they thought were paper cuts but, in sum, add up to you losing all the blood in your body. I think we’ve seen this with self-driving cars, where very, very promising growth rate, and then an incredibly grinding slow pace at getting it to scale.
I just read a paper two days ago about trying to train human-like hands on industrial robots. Using reinforcement learning doesn’t work. The best they had was a 60 percent success rate. If I have my baby, and I give her a robot butler that has a 60 percent accuracy rate at holding things, including the baby, I’m not buying the butler. Or my wife is incredibly unhappy that I bought it and makes me send it back.
As a community, we tend to underestimate that. I may be proved to be an unrealistic pessimist here. I think that’s what many of my colleagues would say, but I think we overestimate the ease with which we get into a physical world.
COWEN: As I said in print, my best estimate is, we get half a percentage point of growth a year. Five percent would be my upper bound. What’s your scenario where there’s no growth improvement? If it’s not yours, say there’s a smart person somewhere in Anthropic — you don’t agree with them, but what would they say?
Interesting throughout, definitely recommended.
Who’s next?
The United Arab Emirates will introduce artificial intelligence to the public school curriculum this year, as the Gulf country vies to become a regional powerhouse for AI development.
The subject will be rolled out in the 2025-2026 academic year for kindergarten pupils through to 12th grade, state-run news agency WAM reported on Sunday. The course includes ethical awareness as well as foundational concepts and real-world applications, it said.
The UAE joins a growing group of countries integrating AI into school education. Beijing announced a similar move to roll out AI courses to primary and secondary students in China last month.
The Gulf state has invested extensively in data centers used to train AI models and has set up an AI investment fund that people familiar with the project said could swell to more than $100 billion in a few years.
Here is more from Sara Gharaibeh at Bloomberg. Via Anecdotal.
Facts about robots
The robot is also just a fraction of the expense of integrating automation into a factory. A robot that stacks goods on to pallets can cost up to $150,000 to install when sensors, safety fencing, conveyors and other infrastructure are taken into account, according to Jorg Hendrikx, chief executives of robotics marketplace Qviro. Such costs put robotics out of the reach of many US manufacturers.
Just 20 per cent of factories with between 50 and 150 employees have a robot, half the rate of those with more than 1,000 staff, according to the US Census Bureau.
Driverless trucks on their way?
Aurora Innovation, Inc. (NASDAQ: AUR) has successfully launched its commercial self-driving trucking service in Texas. Following the closure of its safety case, Aurora began regular driverless customer deliveries between Dallas and Houston this week. To date, the Aurora Driver has completed over 1,200 miles without a driver. The milestone makes Aurora the first company to operate a commercial self-driving service with heavy-duty trucks on public roads. Aurora plans to expand its driverless service to El Paso, Texas and Phoenix, Arizona by the end of 2025.
Here is the story, via Joe Brenton.
China estimate of the day
Jensen: “First thing to understand: 50% of the world’s AI researchers are Chinese.”
Here is the link.