In November 2022, OpenAI launched ChatGPT 3 which took the world by storm resulting in a race to build computing infrastructure (Microsoft, Google, Amazon and Meta are spending tens of billions) in turn making Nvidia, almost a monopoly in GPU chips, one of the world’s most valuable companies. Just a month before that was the publication of arguably the best book written on the semiconductor industry, its history and implications on geopolitics – Chip War by Chris Miller. The timing couldn’t have been more perfect helping us understand the significance of semiconductors in all our lives and for humanity’s future. This is an interview of the author Chris Miller by Mario Gabriele talking about various things history, technology and geopolitics. As Gabriele puts it “…if you’re interested in grasping the world of tomorrow in all its complexity, Chip War is a brilliant starting point.”
In this interview, Miller talks about how economics fails us with its utility function that can’t explain the motivations of political leaders nor entrepreneurs. He gives the examples of Russia’s Vladmir Putin in politics:
“My background is in Russian studies, and I’m struck by the extent to which our analysis of Putin has changed over time. Twenty years ago, when he first came to power, he portrayed himself – and with some level of accuracy, I think – as a relatively modern leader of Russia. He was reforming the tax system and doing stuff that political leaders do. When we talked about his motivations at the time, the focus was often very financial. I remember very distinguished economists who I respect greatly saying, “Isn’t it the case that Putin is primarily driven by money?” And indeed, there are lots of examples of Putin being hugely corrupt and his friends stealing all sorts of stuff. He’s got his gaudy palaces on the shores of the Black Sea.
But we’ve learned that it’s not all about money. When he invaded Ukraine in 2022, Putin cited Peter the Great and Catherine the Great as justifications for territorial conquest. It’s an illustration that “modern people” are not always driven by modern impulses. The desire for power and glory and control, the desire to be on top and dominate others – for better or worse – are central to many people’s utility functions. These impulses might seem more base, but I think, to some degree, they’re present within all of us. You ignore them at your peril.”
Neither do utility functions do a good job helping us understand entrepreneurs. He cites Nvidia’s Jensen Huang as an example:
“Great founders may have shareholders who would like them to consider return on equity, but that’s not how they make decisions. Think of Jensen Huang ten years ago – even though Wall Street was warning him against it, he still poured Nvidia’s money into building out CUDA and the ecosystem around it. If your mode of thinking is purely economic – focused on return on equity or maximizing shareholder value – you miss a lot of what actually drives competitive, successful people.”
When asked what will be the big technological developments that will be mainstream in future:
“I think we know the trajectory of technological progress in broad strokes. If you go back fifty years ago, you can find Gordon Moore talking about personal, portable communication devices. It was hard to imagine in detail what that would look like, but he got the basic schtick.
Because of that, I don’t know what part of our future would be inconceivable to us. I think it’s very possible that our children will go to space as the cost of spaceflight declines. I think we’ll have much better brain-computer interfaces – that’s already happening. Genetic engineering will be a sphere of great progress. Ultimately, we know what the big trend lines will be. We just can’t predict them exactly.”
On geopolitics, he reckons we underestimate the risk of a world war in the next decade and potential use of nuclear weapons in the next half a century.
When asked how will future historians view our era, he leaves us with one scary thought and a more promising one:
“It seems to me that there are three key dynamics of this era. One, an intensification of the investment in and deployment of advanced computing. “AI” is the phrase used this year, but it’s a longer-term trend. Two, the intensification of geopolitical competition. And three, the politicization of international economic life, which for the past 20 to 30 years was not really driven by political factors. Today, it certainly is.
As the saying goes, “History doesn’t repeat itself, but it often rhymes.” The scary rhyme with our current period is with the pre-1914 world, before the advent of World War I. In addition to being geopolitically tense, that was also a period of technological advancements. Railroads were economically transformative and good in many ways. But they also brought people closer in ways that weren’t always positive. It was railroads, for example, that enabled the large European empires that formed. If you think of European empires in 1800, they basically ruled coastal areas or small islands. For example, the British ruled the coast of Canada, some Caribbean islands, and the coast of India. By 1900, every European empire had penetrated inland very deeply, enabled by railroads. It’s impossible to imagine African colonization without that technology.
The positive rhyme is with the 1980s and 1990s. You have the application of computing to every sector of the economy in that period, leading to huge productivity advances in the 1990s and 2000s. The optimistic view of all the computing investments we’re making today is that we’ll find a whole new set of applications which will meaningfully speed up economic growth.”
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