A.I. data center spending in America has created a boom for overseas manufacturers, not so much for manufacturers here at home.
“Roughly three-quarters of the cost of an A.I. data center is for the computer gear and parts such as computer chips that go inside of it,” reported the Wall Street Journal. “America’s A.I. champions, including the computer chip pioneer Nvidia, manufacture many of their products in Asia – despite efforts by the Biden and Trump administrations to reduce U.S. dependence on essential chips made overseas.”
“The single biggest threat to the world economy, the single biggest point of single failure, is that 97% of the high-end chips are made in Taiwan,” Treasury Secretary Scott Bessent said last month.
Forbes reported that modern, top-of-the-line A.I. servers, like those running NVIDIA GPUs are built from thousands of components manufactured overseas with final assembly concentrated in Mexico, Taiwan, China, and other countries in Greater Asia.
Reshoring alone will not overcome this.
The New York Times reported that Tesla’s factory in Shanghai produces far more cars per worker than its plant in California. This gap “reflects something unsettling about China’s broader edge in manufacturing: It has figured out how to organize production around large-scale deployment of automation, robotics, and artificial intelligence. The United States has not.” And, “other advanced economies in Germany, Japan, South Korea, and elsewhere are responding with similar strategies.”
There’s more.
“America Needs A.I. That Can Do Math - Language skills won’t be enough to stay ahead of China in the economic sectors that matter,” headlined a recent article in the Wall Street Journal. “The U.S. will need to use a whole new class of artificial-intelligence models – built for the world of science and math, not language and images – to stay competitive with China as it puts the pedal to the metal in critical sectors.”
Interestingly, a Mississippi-based company seeks to help solve this issue. Brient Mayfield, CEO and founder of Optimal Answers based in Gulfport, notes that A.I. models often hallucinate, providing wrong answers at a 30% error rate. “To be clear,” he said, “A.I. is amazing and is gaining adoption for performing work where 100% accuracy is not required. Such uses include natural language processing, image management, and search (with data distillation).” In contrast, he continued, “accuracy and reliability are required for workflow automation and most decision support needs.”
Optimal Answers has now adapted its Optimal Decision Optimization product to incorporate A.I. “By combining optimization and AI, the strengths of both technologies can be leveraged in the decision support computations while minimizing the weaknesses,” Mayfield said.
As America integrates A.I. into autonomous weapons systems, accuracy must be optimized.
“Wealth gained hastily will dwindle” – Proverbs 13:11
Crawford is an author and syndicated columnist from North Jackson.
14 comments:
Where did it start?
I will share the cliff notes history with all of you.
HP, Apple, AT&T, Xerox, IBM, Tandem, ZENITH, Motorola, and all of the big American tech companies manufactured almost everything in the USA.
The big change happened when a man named Jack Tramiel wanted to make cheap ass computers and sell millions of them. His company, Commodore Computers did that. How did they do it? They outsourced to Taiwan and Hong Kong. Nobody could compete. The Commodore 64 was unreliable but it was cheap and as soon as it built a software base it dominated the market. Atari tried and failed. Apple didn’t try to compete and kept manufacturing the Apple II and Macintosh in California until the early 90s.
Jack Tramiel led the race to the bottom. He bankrupted Atari and then bought Atari. Then Commodore and Atari both went bankrupt.
The mark he left is that you can make billions in technology with cheap and unreliable hardware. Everyone eventually copied his model.
The companies in Taiwan that made the chips and manufactured the guts and assembled everything became TSMC and Foxconn. They now dominate. Everything Mac and PC you buy today has chips made by TSMC and assembled in a Foxconn factory. Even Mac is made by Foxconn now.
From Wikipedia:
Jack Tramiel (/ˈdʒæk trəˈmɛl/, trə-MEL; born Idek Trzmiel, Polish pronunciation: [ˈidɛk ˈtʂmjɛl]; December 13, 1928 – April 8, 2012) was a Polish-American businessman and Holocaust survivor, best known for founding Commodore International.[3] The PET, VIC-20, and Commodore 64 are some home computers produced while he was running the company. Tramiel later formed Atari Corporation after he purchased the remnants of the original Atari, Inc. from its parent company. He was one of six people spotlighted when the computer was denoted “Machine of the Year” by Time magazine in 1982.
9:05 here.
One other item to add is that the advanced EUV lithography process used to make these new and most advanced chips, is not American technology. EUV lithography was innovated ASML Holding in the Netherlands. The most advanced nodes that were ever publicly known to be created in the USA, were Global Foundaries (Formerly AMD) 14nm lithographic process which is superior in durability to the new 3nm EUV process, but much less performant.
ironically, China has developed their own EUV process domestically since they have been denied the technology.
in the USA and Taiwan, Intel and TSMC both import the ASML advanced lothography equipment for their silicon foundries.
I remember when Bill Crawford predicted that when the calendar hit Y2K it would crash the world's economy and cause computer systems around the globe to melt in defiance.
If nothing else, the man is a charter member of the Al Gore club of Chicken's Little Falling Skies.
9:45, aka 9:05 are telling us this is our last chance to rush to our bunkers, caves and safe rooms.
Actually no. Just saying it isn’t *our technology* it is Dutch technology. And only Taiwan can produce the yields necessary profitably. Those fans in Arizona will be staffed by Taiwan citizens. The Americans might be allowed to sweep the floors in the offices and clean the toilets in the bathrooms. But they won’t be anywhere near the actual foundries.
Wow bruh you seem to be suffering from Al Gore Derangement Syndrome. The man hasn’t been relevant since he was “me too’d” a decade ago. Yet, for some reason you have raging hate boner for him as if you’ve been out of touch with reality since the 2000 election!
You do have to wonder if America wasn’t sold out to Asia decades ago if we wouldn’t have the manufacturing ability to make chips here? What if our young hadn’t been brain damaged by vaccines and massive social engineering designed to weaken us.
I don’t think Billy has a friggin clue what he’s talking about or what AI really is.
@ 7:12 - He's kind of like 3:31...Just wanted to post something.
This article sounds like AI wrote it. So called journalists and reporters can’t be replaced fast enough for me. They did it to themselves because they just couldn’t help but be biased and print outright lies.
“One Ring to rule them all, One Ring to find them, One Ring to bring them all and in the darkness bind them.”
Do you see the irony of your post?
no librard i dont so why dont you spell it out for me
Considering Gore made 9 figures while being a founding father of the green socialism and being wrong about just about everything, yes, I am irritated that the US government has urinated 100s of billions chasing Al Gore's fantasies.
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