Sure, but note that the story "tariffs -> recession -> less AI investment" doesn't particularly depend on GPU tariffs!

Of course, tariffs could have more complex effects than just reducing GPUs purchased by 32%, but this seems like a good first guess.

Shouldn't a 32% increase in prices only make a modest difference to training FLOP? In particular, see the compute forecast. Between Dec 2026 and Dec 2027, compute increases by roughly an OOM and generally it looks like compute increases by a bit less than 1 OOM per year in the scenario. This implies that a 32% reduction only puts you behind by like 1-2 months.

• I probably should have used a running example in this post - this just seems like a mostly unforced error.
• I considered writing a conclusion, but decided not to because I wanted to spend the time on other things and I wasn't sure what I would say that was useful and not just a pure restatement of things from earlier. This post is mostly a high level framework + list of considerations, so it doesn't really have a small number of core points.
• This post is a relatively low effort post as indicated by "Notes on", possibly I should have flagged this more.
• I think comments / in person are easier to understand than my blog posts as I often try to write blog posts that have lots and lots of content which is all grouped together, but without a specific thesis. I typically have either 1 point or a small number of points in comments / in person. Also, it's easier to write in response to something as there is an assumed level of context already etc.

Is this an accurate summary:

• 3.5 substantially improved performance for your use case and 3.6 slightly improved performance.
• The o-series models didn't improve performance on your task. (And presumably 3.7 didn't improve perf.)

So, by "recent model progress feels mostly like bullshit" I think you basically just mean "reasoning models didn't improve performance on my application and Claude 3.5/3.6 sonnet is still best". Is this right?

I don't find this state of affairs that surprising:

• Without specialized scaffolding o1 is quite a bad agent and it seems plausible your use case is mostly blocked on this. Even with specialized scaffolding, it's pretty marginal. (This shows up in the benchmarks AFAICT, e.g., see METR's results.)
• o3-mini is generally a worse agent than o1 (aside from being cheaper). o3 might be a decent amount better than o1, but it isn't released.
• Generally Anthropic models are better for real world coding and agentic tasks relative to other models and this mostly shows up in the benchmarks. (Anthropic models tend to slightly overperform their benchmarks relative to other models I think, but they also perform quite well on coding and agentic SWE benchmarks.)
• I would have guessed you'd see performance gains with 3.7 after coaxing it a bit. (My low confidence understanding is that this model is actually better, but it is also more misaligned and reward hacky in ways that make it less useful.)

METR has found that substantially different scaffolding is most effective for o-series models. I get the sense that they weren't optimized for being effective multi-turn agents. At least, the o1 series wasn't optimized for this, I think o3 may have been.

Sorry if my comment was triggering @nostalgebraist. : (

The list doesn't exclude Baumal effects as these are just the implication of:

• Physical bottlenecks and delays prevent growth. Intelligence only goes so far.
• Regulatory and social bottlenecks prevent growth this fast, INT only goes so far.

Like Baumal effects are just some area of the economy with more limited growth bottlenecking the rest of the economy. So, we might as well just directly name the bottleneck.

Your argument seems to imply you think there might be some other bottleneck like:

• There will be some cognitive labor sector of the economy which AIs can't do.

But, this is just a special case of "will there be superintelligence which exceeds human cognitive performance in all domains".

In other words, it stipulates what Vollrath (in the first quote below) calls "[the] truly unbelievable assumption that [AI] can innovate precisely equally across every product in existence." Of course, if you do assume this "truly unbelievable" thing, then you don't get Baumol effects – but this would be a striking difference from what has happened in every historical automation wave, and also just sort of prima facie bizarre.

Huh? It doesn't require equal innovation across all products, it just requires that the bottlenecking sectors have sufficiently high innovation/growth that the overall economy can grow. Sufficient innovation in all potentially bottlenecking sectors != equal innovation.

Suppose world population was 100,000x higher, but these additional people magically didn't consume anything or need office space. I think this would result in very fast economic growth due to advancing all sectors simultaneously. Imagining population growth increases seems to be to set a lower bound on the implications of highly advanced AI (and robotics).

As far as I can tell, this Baumol effect argument is equally good at predicting that 3% or 10% growth rates are impossible from the perspective of people in agricultural societies with much lower growth rates.

So, I think you have to be quantitative and argue about the exact scale of the bottleneck and why it will prevent some rate of progress. The true physical limits (doubling time on the order of days or less, dyson sphere or even consuming solar mass faster than this) are extremely high, so this can't be the bottleneck - it must be something about the rate of innovation or physical capital accumulation leading up to true limits.

Perhaps your view is: "Sure, we'll quickly have a Dyson sphere and ungodly amounts of compute, but this won't really result in explosive GDP growth as GDP will be limited by sectors that directly interface with humans like education (presumably for fun?) or services where the limits are much lower." But, this isn't a crux for the vast majority of arguments which depend on the potential for explosive growth!