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George Gilder: Cloud Computing Is Reaching Its Limits

The “cloud” isn’t something ethereal “up there,” Gilder reminds us; it is giant factory floors of computers

Gilder, author of Life after Google: The Fall of Big Data and the Rise of the Blockchain Economy, explained why he thinks so at the Hoover Institution last summer, in an “Uncommon Knowledge” broadcast with Peter Robinson hosting:

A full transcript for “George Gilder: Forget Cloud Computing, Blockchain Is The Future ” is available:

Gilder argues that cloud computing, while it was the hot new technology ten years ago, has reached its limits as the physical limitations of big data storage centers maxes out. Improvements in parsing big data are incremental at this point, and it’s time for the next big technology to take its place. Gilder points to blockchain as the technology of the future, with its ability to prevent corruption and manipulation of transaction data and the infinite uses it could have in third world countries.

Gilder also discusses the history of technology, artificial intelligence, and the revolutionary bitcoin. He argues that artificial intelligence can never replace human intelligence and creativity and that in principle, it is impossible for machines to take over…


Peter Robinson: You spent some time in Life After Google describing The Dalles, if I’m pronouncing that correctly …

George Gilder: Yeah, yeah, yup.

Peter Robinson: … which is the huge Google data center up in Oregon. In Life After Google, you write of the diminishing returns of big data, so let me understand if I, let me make sure I understand at least one part of your argument correctly. The delusions come next. First there are certain physical, almost-physical constraints. We’ve reached the point now at which no matter how big your data center, improvements in parsing data are only going to be incremental. It’s going to be difficult to get enough power. It’s going to be difficult to cool these machines adequately, which is why Google’s big centers up at the Dalles because there’s a huge dam there, which means cheap hydroelectric power and cold water for cooling. So that’s argument number one, they’re bumping into physical limitations. Is that correct?

George Gilder: This is a symbol. The Dalles and all their data centers, parked like aluminum plants beside big bodies of water, or near glaciers, their various other means of cooling, just like an industrial plant of the previous era. I think that this cloud computing, which was a great triumph for its time, and dominated its time, is now reaching the end of the line. A great computer scientist named Gordon Bell ordained a proposition called Bell’s Law, which is that every 10 years, Moore’s Law, which is the doubling of computer power every year, yields a hundred-to-thousand-fold rise in total computer capability and requires a completely new computer architecture. I wrote about the cloud first. I hailed the cloud in an article in Wired in 2006, and said that it would dominate the next Bell’s Law phase. But it’s now 12 years since 2006, and that Bell’s Law regime of cloud computing, huge data centers, all parked by bodies of water, is coming to an end.

Peter Robinson: Okay. I just want to tie, make sure that I understand this. I want to emphasize this because I think I’m right about it. Cloud computing, I don’t know who the genius was, maybe I’m talking to him now, who first conceived of the notion of the cloud because it puts in the mind of the ordinary user the sense that somehow or other, computing has now become ethereal. It’s just up there. It’s not up there. It’s in big, industrial-scale operations at the Dalles in Oregon and other….

George Gilder: 80 different sites around the world, I think Google has now.

Peter Robinson: Okay.

George Gilder: Big, big data centers.

Peter Robinson: So the cloud isn’t the cloud. It’s factories, essentially, of huge computers.

George Gilder: Yeah.

Most clouds do not have that kind of a footprint. Most people do not realize that “the cloud” is giant factory floors.

In the present day, a key disadvantage of cloud computing is that if the internet is down, so are you, because that’s where your data is. Users need to weigh technological advance against control over the product.

More on George Gilder and Life after Google: The Fall of Big Data and the Rise of the Blockchain Economy:

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George Gilder: Cloud Computing Is Reaching Its Limits