Tokyo, Japan – February 3: AI CEO Sam Altman speaks during a meeting with Softbank Group Masayoshi Son CEO at an event entitled “Transforming the Business by AI” in Tokyo, Japan on 03 February 2025.
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“You should expect a bundle of economists to tighten their hands and say” this is so crazy. Is so reckless “or anything else”. These are the words of AI Open CEO Sam Altman, explaining the expected reaction to what he predicts will be worth a trillion costs from Openai to the construction of the Data Center and other efforts to discover a very different future of artificial intelligence.
What is important for the purposes of this piece is that according to Cade Metz and Karen Weise of New York TimesAmazon, Microsoft, Google, Meta and Openai are on the right track to spend $ 325 billion to pursue a different AI tomorrow in 2025. Where should some eyes open about what funds and credit is in relation to what their economists think they are.
To believe economists from the left, right and center, the Federal Reserve is the proverbial green or red light on the issue of economic growth. On the left, Fed Ben Bernanke’s future president commented famously in the 1930s that we “did it”, as in the Fed allegedly maintained the so -called “money supply” under what it should have been, so the recession. To one recent piece for Real brandsRight economist Charles Calomiriris joined an almost monolithic consensus among economists who “the Fed caused the great recession through persistent monetary contraction (1929-1933)”.
The good news, as Altman says, is that economists do not necessarily see the world the way entrepreneurs and investors do. That they do not question the popular view between economists that a supposed Fed failure to enhance the so -called “money supply” and keep the credit flowing to the point where investors despise terrible policy by Herbert Hoover and FDR did not want to flow. This is a comment that the Fed did not, nor could it have caused the 1930s taking into account the happy fact that the only closed economy is the global economy. In other words, if the Fed was the source of tight faith or the inability of money in the traffic, then the globalized market forces would have quickly corrected the error.
The evidence that supports the above claim can be found in a strong increase in investment in data centers and other advances intended for the power of the AI economy. To be clear about the trillions that are operational, the latter was not the creation of the Federal Bank. How could it be? When we follow investments or loans, we do not seek money, we probably seek money for the money they can exchange.
Which means that credit is producedunlike the creation of the Fed, or banks or any other entity. It is noteworthy about increasing the investment associated with AI is that it has occurred within 525 Fed Increases in 525 and continues within what they consider to date a “tight” power supply. They are all intangible, as is the role of the Fed in the 1930s. Loans and investments are not the result of an “easy” or “tight” power supply (economists generally know the sense of price controls), but of people and ideas. If people and ideas are great, investment will increase.
The simple, prosperous truth is that money movements reflect the resources that match the business. This is what is happening now, as hundreds of billions and finally trillions are heading to the visions of people such as Altman. That this surprises economists and those who think of the Fed as the proverbial guard for economic growth is not as surprise as it is an obvious statement.
