What happened to the artificial-intelligence investment boom? - The Economist (Full Access)   

Many economists believe that generative artificial intelligence (AI) is about to transform the global economy. A paper published last year by Ege Erdil and Tamay Besiroglu of Epoch, a research firm, argues that “explosive growth”, with gdp zooming upwards, is “plausible with ai capable of broadly substituting for human labour”. Erik Brynjolfsson of Stanford University has said that he expects ai “to power a productivity boom in the coming years”.

For such an economic transformation to take place, companies need to spend big on new software, communications, factories and equipment, enabling AI to slot into their production processes. An investment boom was necessary to allow previous technological breakthroughs, such as the tractor or the personal computer, to spread across the economy. From 1992 to 1999 American nonresidential investment jumped by 3% of gdp, for instance, driven in large part by extra spending on computer technologies. Yet so far there is little sign of an ai splurge. Across the world, capital expenditure by businesses (or “capex”) is remarkably weak.

After sluggish growth in the years before the covid-19 pandemic, capex increased as lockdowns lifted (see chart). In early 2022 it was rising at an annualised rate of about 8% a year. A mood of techno-optimism had gripped some businesses, while others sought to firm up supply chains. Capex then slowed later the same year, owing to the effects of geopolitical uncertainty and higher interest rates. On the eve of the release of OpenAI’s GPT-4 in March 2023, global capex spending was growing at an annualised rate of about 3%.

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America braces for Taiwan’s election—and vice versa - The Economist (Full Access)   

The year 2022 brought the war in Ukraine; 2023 the one in Gaza. Will 2024 add a crisis over Taiwan? The self-governing island will hold elections on January 13th, as will America on November 5th. Both polls will raise the geopolitical heat at a time of military tension across the Taiwan Strait and deepening rivalry between America and China.

Many in Washington worry that a clash over Taiwan looms, despite efforts by the American and Chinese presidents, Joe Biden and Xi Jinping, to stabilise relations at a summit in November. China claims the island as its own, and America says Mr Xi has ordered the People’s Liberation Army to develop the means to invade Taiwan by 2027. American commanders, worried about the shifting military balance, talk of a “window of vulnerability” in the second half of the decade. Yet conflict could erupt sooner, if the delicate balance between Taiwan, China and America is upset.

America, Taiwan’s main protector, will not favour any candidate in the island’s election. But American officials have long fretted that a victory for Lai Ching-te, deputy to President Tsai Ing-wen and fellow member of the independence-minded Democratic Progressive Party (dpp), could lead to escalation. He is leading polls by five percentage points, according to The Economist’s tracker.

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Joe Biden’s chances do not look good. The Democrats have no plan B - The Economist (Full Access)   

SITTING PRESIDENTS do not tend to abandon bids for re-election. The most recent to do so was Lyndon Johnson, in 1968. And that is a year that his party, the Democrats, would rather forget. Johnson was unpopular. The country and the party were divided by the Vietnam war and the civil-rights movement. After a surprisingly strong challenge in the first primary, he stood aside, only to unleash chaos. One of the leading candidates to replace him, Robert Kennedy, was assassinated. The nomination was eventually awarded by party grandees to a man who had not won a single primary, Hubert Humphrey. In the end the Republican candidate, Richard Nixon, who had been widely considered unelectable at the beginning of the year, won convincingly. He went on to do more damage to the presidency than anyone bar the Republicans’ likely candidate this year, Donald Trump.

Mr Trump, too, should be unelectable, owing to the 91 felonies with which he has been charged in different parts of America. Yet Joe Biden, the incumbent president, is so unpopular he may well lose to Mr Trump. There have been occasional calls for Mr Biden to step aside, like Johnson. But there is no sign that he is willing to do so and no guarantee that the Democrats would end up with a stronger candidate if he did. For that reason, although many Democratic operatives have grave misgivings about his candidacy, most are keeping quiet. As one puts it, if you’re all stuck on a boat of questionable seaworthiness, it is natural to wish for a finer vessel, but unproductive to poke holes in the hull or stoke a mutiny.

It is Mr Biden’s feeble polling that is seeding the angst. The Economist’s poll tracker for the Republican primary puts Mr Trump more than 50 percentage points ahead of his nearest rival, making him the prohibitive favourite. A polling average for the general election compiled by RealClearPolitics shows Mr Trump ahead of Mr Biden by a margin of 2.3 percentage points. This is well above his showing in the past two presidential contests, in which he consistently lagged in the polls. At this point in 2016 Mr Trump’s support was seven points lower: he trailed Hillary Clinton by a margin of five points. At this point in 2020 he trailed Mr Biden by five points.

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Ukrainian stand-up comedy has undergone a renaissance during war - The Economist (Full Access)   

Looking back, it was reckless. Russian tanks still menaced neighbouring towns. Locals were missing, dead or being tortured. And if Russian troops did manage to enter Sumy, just 30km from the eastern border, they would surely have no trouble identifying the ringleader. But for Felix Redka (pictured), a local comedian, organising a stand-up show on the 24th day of the Russian occupation of Sumy was more than just an act of defiance. It was fun. “When else would I have the opportunity to do stand-up in a nuclear bunker?” he says.

Mr Redka’s gig in March 2022, watched by 150 nervous locals in real time and millions of online viewers since, marked a watershed. Anton Zhytlove, a comedian and businessman in Kyiv, says the gig gave an “emotional charge” to others still sheltering underground. “We didn’t know if we could joke or not,” he says. “Felix showed us a way to resist.” In the weeks that followed, Ukrainian stand-up comedy boomed. Mr Zhytlove will open his third new venue in Kyiv later this month, one of at least six in the capital alone. Belief, more than cashflow, is what is powering the Ukrainian expansion, he says. “It is also the best way to ensure you get a gig.”

Stand-up comedy was a thing in Ukraine long before the full-scale invasion. A circuit of sorts had developed by the late 2010s. But back then the business was dominated by touring Russian comics, mostly backed by Kremlin-financed TV companies. The market for local comics was more limited. “I had an average audience of about four,” recalls Mr Redka. But the invasion inverted the market. Ukrainian audiences began to demand Ukrainian comedians. Now the best of them perform to audiences of 1,500 or more.

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