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Continued hype is necessary for the industry, because so much money flowing in essentially allows the big players, like OpenAI, to operate free of economic worry and considerations

The money involved is staggering—Anthropic announced they would compete with OpenAI and raised 2 billion dollars to train their next-gen model, a European counterpart just raised 500 million, etc. Venture capitalists are eager to throw as much money as humanely possible into AI, as it looks so revolutionary, so manifesto-worthy, so lucrative.

While I have no idea what the downloads are going to be for the GPT Store next year, my suspicion is it does not live up to the hyped Apple-esque expectation.

given their test scores, I’m willing to say GPT-4 or Gemini is smarter along many dimensions than a lot of actual humans, at least in the breadth of their abstract knowledge—all while noting even leading models still have around a 3% hallucination rate, which stacks up in a complex task.

A more interesting “bear case” for AI is that, if you look at the list of industries that leading AIs like GPT-4 are capable of disrupting—and therefore making money off of—the list is lackluster from a return-on-investment perspective, because the industries themselves are not very lucrative.

What are AIs of the GPT-4 generation best at? It’s things like:writing essays or short fictionsdigital artchattingprogramming assistance

While I personally wouldn’t go so far as to describe current LLMs as “a solution in search of a problem” like cryptocurrency has famously been described as, I do think the description rings true in an overall economic/business sense so fa

The issue is that taking the job of a human illustrator just. . . doesn’t make you much money. Because human illustrators don’t make much money

While you can easily use Dall-E to make art for a blog, or a comic book, or a fantasy portrait to play an RPG, the market for those things is vanishingly small, almost nonexistent

As of this writing, the compute cost to create an image using a large image model is roughly $.001 and it takes around 1 second. Doing a similar task with a designer or a photographer would cost hundreds of dollars (minimum) and many hours or days (accounting for work time, as well as schedules). Even if, for simplicity’s sake, we underestimate the cost to be $100 and the time to be 1 hour, generative AI is 100,000 times cheaper and 3,600 times faster than the human alternative.

Like, wow, an AI that can write a Reddit comment! Well, there are millions of Reddit comments, which is precisely why we now have AIs good at writing them. Wow, an AI that can generate music! Well, there are millions of songs, which is precisely why we now have AIs good at creating them.

Search is the most obvious large market for AI companies, but Bing has had effectively GPT-4-level AI on offer now for almost a year, and there’s been no huge steal from Google’s market share.

What about programming? It’s actually a great expression of the issue, because AI isn’t replacing programming—it’s replacing Stack Overflow, a programming advice website (after all, you can’t just hire GPT-4 to code something for you, you have to hire a programmer who uses GPT-4

Even if OpenAI drove Stack Overflow out of business entirely and cornered the market on “helping with programming” they would gain, what? Stack Overflow is worth about 1.8 billion, according to its last sale in 2022. OpenAI already dwarfs it in valuation by an order of magnitude.

The more one thinks about this, one notices a tension in the very pitch itself: don’t worry, AI isn’t going to take all our jobs, just make us better at them, but at the same time, the upside of AI as an industry is the total combined worth of the industries its replacing, er, disrupting, and this justifies the massive investments and endless economic optimism.

It makes me worried about the worst of all possible worlds: generative AI manages to pollute the internet with cheap synthetic data, manages to make being a human artist / creator harder, manages to provide the basis of agential AIs that still pose some sort of existential risk if they get intelligent enough—all without ushering in some massive GDP boost that takes us into utopia

If the AI industry ever goes through an economic bust sometime in the next decade I think it’ll be because there are fewer ways than first thought to squeeze substantial profits out of tasks that are relatively commonplace already

We can just look around for equivalencies. The payment for humans working as “mechanical turks” on Amazon are shockingly low. If a human pretending to be an AI (which is essentially what a mechanical turk worker is doing) only makes a buck an hour, how much will an AI make doing the same thing?

, is it just a quirk of the current state of technology, or something more general?

What’s written on the internet is a huge “high quality” training set (at least in that it is all legible and collectable and easy to parse) so AIs are very good at writing the kind of things you read on the internet

But data with a high supply usually means its production is easy or commonplace, which, ceteris paribus, means it’s cheap to sell in turn. The result is a highly-intelligent AI merely adding to an already-massive supply of the stuff it’s trained on.

Was there really a great crying need for new ways to cheat on academic essays? Probably not. Will chatting with the History Buff AI app (it was is in the background of Sam Altman’s presentation) be significantly different than chatting with posters on /r/history on Reddit? Probably not

Call it the supply paradox of AI: the easier it is to train an AI to do something, the less economically valuable that thing is. After all, the huge supply of the thing is how the AI got so good in the first place.

AI might end up incredibly smart, but mostly at things that aren’t economically valuable.

To me, that letter wasn’t just an invitation to a fancy summer program—it was an invitation into an educational world that I thought would change my life.

it wasn’t the differences between us that posed the biggest challenge to our unity; it was the constant reminders from above of those differences, all the ways we were hierarchically organized or comparatively privileged or fundamentally limited in our views. We were challenged to transcend those limitations and build the foundations of a community, but for that you need good faith, which was in short supply.

The other problem was that TASP lacked all the mechanisms of a functioning democracy. We had been cherry-picked to represent diversity, but actually the point was for all of us to arrive at the same conclusions—men talked too much, the world was fraught with microaggressions, dodgeball was bad, and eggs were worse. There was no framework for disagreement, no space for ideological detours, no home for structural challenges to the so-called intentional community we lived in.

Nobody wanted to deal with the key annoyance of democracy—learning to tolerate our differences.

It’s only now that I recognize that the truth of this statement—after all, what 17-year-old knows what’s best for them—served to justify the anti-democratic reality of a space contemptuous of every experience except for those of “oppressed groups,” as determined by the factota. It is equally alarming to see that the so-called leaders of my teenage years are now actively remaking a space once devoted to self-exploration and communal understanding in their own intellectual self-image, as a place where questioning and self-determination are being eliminated in favor of received truth.

In 2022, the Telluride Association announced that they were discontinuing TASP and expanding TASS, the equivalent program for sophomores, into a program with two focus areas—“Critical Black Studies” and “Anti-Oppressive Studies.”

Students would no longer live all together, like we did, according to Nunn’s vision. Instead, the “Critical Black Studies” community would live and study separately, creating an entirely Black space. Afternoons and evenings were no longer reserved for things like Nerf wars or eating entire jars of sprinkles, which were the activities that allowed our diverse group to come together, and which I remember much more vividly than all my seminar readings combined. Instead, the students would participate in anti-racism workshops created by the factota. It was this new program that became the “anti-racist Hell” that Vincent Lloyd lamented in his article.

It was easy for me to sympathize with Lloyd, who spent his summer battling with one factota, Keisha, who found him “triggering” and his readings “insufficiently radical,” was frustrated by his insistence on unspooling complex racial ideas in the slow seminar format rather than holding straightforward lectures, and frequently intervened when his discussions caused TASPers “harm.”

By the end of his tenure, he was summoned into an empty classroom by the students, who read their allegations about his behavior—and demands that he change his teaching—from sheets of paper. Every word coming out of their mouths was clearly pulled from conversations with Keisha. A white girl referred to her factota in her remarks: “Keisha speaks for me. She says everything I think better than I ever could.”

I remember being an eager-to-please high schooler on the first day of TASP, sitting in a circle with big aspirations but very little knowledge of the world, wanting so badly to be accepted in an elite space I assumed would give me all the answers, if I could only absorb the guiding principle: You don’t know what’s best for you.

My mom dropped me off at the local Panera, where the interviewer was already sitting in a booth reading a novel when I arrived. He was an older professor who still conducted interviews because he’d had such a transformative experience at TASP. He explained that he came to the seminar as a committed far-left radical, but he struck up an unlikely friendship with a staunch conservative and William F. Buckley devotee, with whom he disagreed about, and argued fervently over, everything. Proudly, he told me that the two men remained friends to this day.

The final rule was relayed by Carlos. With a stern look on his face, he explained that while these rules might seem daunting, all the factota had done this before, and there was one mantra in particular that guided them through their time. The girl next to me opened a notebook and poised her pen eagerly over the page. “During your six weeks here, you should always remember … you don’t know what’s best for you.” He intoned this mantra with such gravitas that the room briefly fell into silence.

TASPers were tasked with governing ourselves through nightly house meetings, bylaw votes, and a complex web of committees regulating everything from kitchen duty to leisure. Our community would be “semi-monastic,” meaning that we were “strongly, strongly encouraged” to limit our contact with the outside world in favor of “turning inward” and “engaging in communal reflection.” To ensure that we learned as much as possible from our peers, there was a ban on “exclusive relationships” of all platonic shades, which would be enforced through assigned seating, periodic roommate switches, minimum group-outing sizes, and good-old-fashioned cockblocking.

Discerning observers will note that doing what “necessity indicates” is a mandate dependent entirely on the values and whims of its executioners. In the case of TASP, necessity apparently indicated living in accordance with not only the Nunnian ideals but also the standards of our factota, most of whom couldn’t yet legally drink but had absolute moral authority over who could take up space, who could express their politics, and who deserved to be there at all. TASP was their world; we were just figuring out how to live in it.

The factota had various tactics to combat these relationships, from sober one-on-one interventions to interrupting group hangs to, notably, a roommate-switch halfway through the program because people were getting too close. This switch was aimed in no small part at Mark, who had been paired with a fellow sporty private-school guy in a cavernous room on the second floor. They bonded instantly, and their room would house all kinds of semi-exclusive hangs, from playlist-making to the occasional horny game of “Never Have I Ever.”

Accordingly, the factota disapproved of our friendship. Kaitlyn felt strongest about limiting his presence in my life and often pulled me aside to warn me against Mark, deeming his influence to be restrictive. She’d accost me to relay a supposedly insufferable remark he’d made during seminar or shoot me pointed stares whenever someone mentioned male entitlement during a house meeting, ignoring my protests that I found it difficult to distance myself from a naturally occurring friendship, and in fact enjoyed chatting with someone so different from myself. Wasn’t that supposed to be the point of TASP, anyway?

Instead, she made it a personal project to interrupt our conversations, wedge herself in between us at dinner, and skew our committee assignments so we couldn’t so much as wash dishes at the same time.

As a white guy studying classics at a high school with a five-figure price tag, Mark regularly landed in the crosshairs of our Sunday night conversations, receiving frequent reminders to “check his privilege” when he cited too much rarefied literature in class conversations and to “cede his time” to minorities or women during house discussions.

By contrast, some big tech employers including Atlassian and Airbnb now allow remote work year-round.

Everyone at Tesla is required to spend a minimum of forty hours in the office per week. Moreover, the office must be where your actual colleagues are located, not some remote pseudo-office.If you don’t show up, we will assume you have resigned.The more senior you are, the more visible must be your presence. That is why I lived in the factory so much- so that those on the line could see me working alongside them. If I had not done that, Tesla would long ago have gone bankrupt.

Tesla, which had more than 99,000 employees at the end of last year, has moved its headquarters to Austin, Texas, from Palo Alto, Calif., though it still has a significant manufacturing and operational presence in California. SpaceX employs about 12,000 people, Mr. Musk said in a recent interview.

Annie Dean, the head of distributed work for Atlassian, an Australian software company, called Mr. Musk’s view “outdated.”

“This mind-set is regressive and discounts the last two years of collaborative, digital-first work,” said Ms. Dean, who was a former head of remote work at Meta, the owner of Facebook, in an email.

It is unclear if Mr. Musk will adhere to his own rules of spending 40 hours a week in Tesla’s and SpaceX’s offices. He is rarely in the office and often travels, said two people who have worked with him and who spoke on the condition of anonymity. They expressed concerns about how the return-to-office policies would affect recruiting and retention at the companies.

Project Orange Tree, an organization started by Pendleton's friends after a youth panel discussion about her death, began the movement to wear orange to raise awareness and honor her.

The idea comes from hunters who wear the color to alert fellow hunters to their presence.

Almost immediately I saw that its main problem wasn’t the children. This was a book about how women in corporate America could—and should—strive to get the most money and the most power. But where should they seek such power? In the crackling hellfire of C-suite America.

During her 14 years at the company, she’s done so much damage to our society that we may never recover. The simple truth is that you cannot simultaneously dedicate yourself to making untold fortunes for a giant corporation and to championing a social good.

Amy’s a bitch, but an honest bitch,” one man said about her. If I ever write one of these books, I’ll call it A Few Honest Bitches, and explain that if we can get the right kind of women inside these places, we might be able to burn them down.

Why were the progressive worlds of publishing and journalism embracing this junk as some kind of giant step toward equality? It will surely go down in history as one of white feminism’s greatest achievements.

Sandberg invoked the name Goldman Sachs multiple times—in a good way. Mind you, this book was published five years after that despicable outfit played a major role in almost bankrupting the country.

There we were: suckers, lambs to the slaughter. It didn’t even occur to us that all of that information wasn’t “safe.” We didn’t want it to be safe! We wanted our long-lost friends from Brownie Troop 347 to be able to find us! When we realized what we’d done, it was already too late.

“We made mistakes and I own them,” Sandberg eventually said about the Cambridge Analytica scandal. “They are on me.” The impression was of radical transparency, a Harry Truman of the C-suite: The buck stops here.

But according to The New York Times, the buck was about to embark on an Oh, the Places You’ll Go! journey to the bottom of the Earth.

Huge corporations are never, ever on the side of the people. You can’t take your eyes off of them for a second, because any time you look away, they’ll do terrible things

Today’s young people have been forced to learn that old lesson, because they are the inheritors of 40 years of corporate greed, private equity’s smash and grab, bank deregulation, and the collusion of the very rich and the U.S. government to squeeze every penny it can from the middle class and move it into the counting houses of billionaires. They know the game isn’t rigged against them; they know the game was lost long before they were born.

Corporations are now faced with labor shortages, and there are rumblings from the owner class about the demise of the great American work ethic. But corporations are the ones who killed it

Young people today know that work is not your life; it’s how you pay for your life. It’s an exchange of money for labor, and they are not interested in devoting a jot of extra energy to jobs that pay minimum wage and offer no health insurance or savings plan, for employers who show no loyalty to their workers.

I’ve heard a number of young people lately say they won’t have children because of the climate crisis. That’s a tremendous sacrifice and a principled position

A Pew Research Center survey from November found that 44 percent of adults without kids say that they probably won’t have any, up from 37 percent in 2018, the last time Pew asked the question

here’s the thing. Ask any older person when the happiest time in their life was, and they will always, always say it was when their children were young.

There is no greater joy in this life than having a baby. Here is a person who has been uniquely designed to love you. And here is Goldman Sachs.

“If you don’t have a free program, the vast majority of your customers are blank to you,”

Mr. Daunt said the new paid-membership program would replace a previous one, which offered discounts for purchases made inside Barnes & Noble’s physical stores—as well as free shipping for most online orders—and cost $25 a year. That plan didn’t extend discounts to online shoppers, a strategy that Mr. Daunt said conflicts with the retailer’s strategy of making books available wherever customers want to buy them. 

it’s worth acknowledging that adhering to these necessary rules cuts against some core aspects of human nature. I’m of the opinion that people should not bring their “whole self” to work — no one owes an employer that — but it’s also impossible to bring none of your personal self to work.

There are good reasons that both formal and informal boundaries are a necessity in the workplace and academia

Russian President Vladimir Putin is demanding that the West rewrite the post-Cold War security arrangements for Europe and demonstrated that Russia has the military capability to impose its will despite Western objections and economic sanctions.

“We all thought we were looking at a Europe whole, free and at peace indefinitely,” said Michele Flournoy, who served as the Pentagon’s top policy official during the Obama administration. “We knew that Russia would conduct gray zone operations and that Putin would use his KGB playbook to create instability on his periphery. But a wholesale invasion of a sovereign country to reorient its government is a different moment.”

“And we’re seeing that while Beijing doesn’t really like Putin’s tactics, they’re willing to band together as authoritarian states against the Western democracies,” Ms. Flournoy added. “We are going to see more and more of that in the future.”

China’s Communist Party leadership also saw pro-democracy protest movements in former Soviet republics as U.S.-engineered plots that could ultimately be used against Beijing.

For much of the past decade, the U.S. security establishment began taking note of what the Pentagon in 2015 called the “re-emergence of great power competition” and shifted from its emphasis of counterterrorism operations in the Middle East and Southwest Asia.

Defense Secretary Lloyd Austin has repeatedly cast China as the “pacing challenge” while Russia was seen as the lesser longer-term danger.

Even with annual defense budgets that soared over $700 billion, coping with an urgent Russian-generated crisis while preparing for a Chinese threat whose peak is still years away presents an enormous challenge for the Pentagon.

”The United States is particularly at risk of being overwhelmed should its military be forced to fight on two or more fronts simultaneously,” said a Congressionally mandated study of the Pentagon’s strategy that was issued in 2018

The era of nuclear reductions may come to an end as the U.S. military establishment argues for a large enough nuclear arsenal to deter both Russia’s formidable nuclear weaponry and China’s rapidly growing nuclear forces, which aren’t limited by any arms-control agreement.

“The United States is going to have to get used again to operating in multiple theaters simultaneously—not just militarily, but in terms of psychology and foreign-policy making,”

Already, debates are emerging among U.S. defense experts on whether the Pentagon should give equal weight to the twin challenges from Beijing and Moscow or focus more on the Pacific.

Should the West impose crippling sanctions on Russian banks and major companies, Moscow is likely to become more reliant on Beijing, which has issued a digital currency and is building a payments system separate from the West’s.

“It is already ending the amnesia about the importance of energy security,” said Daniel Yergin, vice chairman of research firm IHS Markit. “It means a new emphasis on diversification of energy sources for Europe and a new look at U.S. domestic and international energy policies.”

Advocates of using energy as a geopolitical tool say Washington should promote investment in U.S. oil and natural gas and approve new LNG export terminals and pipelines in the United States.

The 1997 NATO-Russia Founding Act precludes the alliance from permanently stationing additional substantial combat forces on the territory of its new Eastern and Central European members, but could now be repealed.

A recent poll by the European Council on Foreign Relations noted most Europeans see the Ukraine crisis as a broader threat to Europe. Some current and former officials, however, worry that the alliance’s solidarity could fray in the years ahead as it debates the need for greater military spending and wrestles whether its military ties with Georgia might stir new confrontations with Moscow.

the Alphen Group by former officials and other experts urges that European members of the alliance and Canada provide for 50% of NATO’s minimum military requirements by 2030 so the U.S. can focus more on deterring China.

“Everybody’s unified right now and outraged about what the Russians are doing,” said Alexander Vershbow, a former U.S. ambassador to NATO who also served as the alliance’s deputy secretary-general from 2012 to 2016. “But when we get down to making longer-term commitments to strengthen NATO’s defense posture and potentially revisit nuclear issues, it could become very divisive.”

The whistleblower added that no one in the government knew the true figure of the dead because “we have lost contact with major divisions”.

FSB officers had been ordered to assess the effects of western sanctions, they said, but were told that it was a hypothetical box-ticking exercise. “You have to write the analysis in a way that makes Russia the victor . . . otherwise you get questioned for not doing good work,” they wrote. “Suddenly it happens and everything comes down to your completely groundless analysis.

“[We are] acting intuitively, on emotion . . . our stakes will have to be raised ever higher with the hope that suddenly something might come through for us.

“By and large, though, Russia has no way out. There are no options for a possible victory, only defeat.”

The letter said that Ramzan Kadyrov, the Chechen leader and an ally of Putin, was on the verge of outright conflict with the Russians after his “hit squad”, sent to kill President Zelensky, was destroyed by Ukrainian forces.

Even if Zelensky were killed, the report said, Russia would have no hope of occupying Ukraine. “Even with minimum resistance from the Ukrainians we’d need over 500,000 people, not including supply and logistics workers.”

The analyst said that the SVR, Russia’s foreign intelligence service, was trying to “dig up dirt” to claim that Ukraine had built nuclear weapons, a pretext for a pre-emptive strike.

The 2,000-word document was published by Vladimir Osechkin, a Russian human rights activist who runs the anti-corruption website Gulagu.net.

Christo Grozev, an expert on the Russian security services, said he had shown the letter to two FSB officers, both of whom had had “no doubt it was written by a colleague”.

The war, the writer said, had been given a “provisional deadline” of June because by then the Russian economy will have collapsed. “I have hardly slept at all recently, working all hours, in a brain-fog,” they wrote. “Maybe it’s from overwork, but I feel like I am in a surreal world. Pandora’s Box has been opened.”

The author said they could not rule out international conflict and that they were expecting “some f***ing adviser to convince the leadership” to send an ultimatum to the West threatening war if sanctions were not lifted.

“What if the West refuses?” they wrote. “In that instance I won’t exclude that we will be pulled into a real international conflict, just like Hitler in 1939.” Elsewhere in the letter they said: “Our position is like Germany in 1943-44 — but that’s our starting position.”

Donor-advised funds are categorized by law as public charities, rather than private foundations, so they have no payout requirements and few disclosure requirements.

And wealthy residents of Silicon Valley are donating large sums to such funds

critics say that in part because of its structure as a warehouse of donor-advised funds, the Silicon Valley Community Foundation has not had a positive impact on the community it is meant to serve. Some people I talked to say the foundation has had little interest in spending money, because its chief executive, Emmett Carson, who was placed on paid administrative leave after the Chronicle’s report, wanted it to be known that he had created one of the biggest foundations in the country. Carson was “aggressive” about trying to raise money, but “unaggressive about suggesting what clients would do with it,”

“Most of us in the local area have seen our support from the foundation go down and not up,” he said.

The amount of money going from the Silicon Valley Community Foundation to the nine-county Bay Area actually dropped in 2017 by 46 percent, even as the amount of money under management grew by 64 percent, to $13.5 billion

“They got so drunk on the idea of growth that they lost track of anything smacking of mission,” he said. It did not help perceptions that the foundation opened offices in New York and San Francisco at the same time local organizations were seeing donations drop.

The foundation now gives her organization some grants, but they don’t come from the donor-advised funds, she told me. “I haven’t really cracked the code of how to access those donor-advised funds,” she said. Her organization had been getting between $50,000 and $100,000 a year from United Way that it no longer gets, she said,

Rob Reich, the co-director of the Stanford Center on Philanthropy and Civil Society, set up a donor-advised fund at the Silicon Valley Community Foundation as an experiment. He spent $5,000—the minimum amount accepted—and waited. He received almost no communication from the foundation, he told me. No emails or calls about potential nonprofits to give to, no information about whether the staff was out looking for good opportunities in the community, no data about how his money was being managed.

One year later, despite a booming stock market, his account was worth less than the $5,000 he had put in, and had not been used in any way in the community. His balance was lower because the foundation charges hefty fees to donors who keep their money there. “I was flabbergasted,” he told me. “I didn’t understand what I, as a donor, was getting for my fees.”

Though donors receive a big tax break for donating to donor-advised funds, the funds have no payout requirements, unlike private foundations, which are required to disperse 5 percent of their assets each year. With donor-advised funds, “there’s no urgency and no forced payout,”

he had met wealthy individuals who said they were setting up donor-advised funds so that their children could disperse the funds and learn about philanthropy—they had no intent to spend the money in their own lifetimes.

Fund managers also receive fees for the amount of money they have under management, which means they have little incentive to encourage people to spend the money in their accounts,

Transparency is also an issue. While foundations have to provide detailed information about where they give their money, donor-advised funds distributions are listed as gifts made from the entire charitable fund—like the Silicon Valley Community Foundation—rather than from individuals.

Donor-advised funds can also be set up anonymously, which makes it hard for nonprofits to engage with potential givers. They also don’t have websites or mission statements like private foundations do, which can make it hard for nonprofits to know what causes donors support.

Public charities—defined as organizations that receive a significant amount of their revenue from small donations—were saddled with less oversight, in part because Congress figured that their large number of donors would make sure they were spending their money well, Madoff said. But an attorney named Norman Sugarman, who represented the Jewish Community Federation of Cleveland, convinced the IRS to categorize a certain type of asset—charitable dollars placed in individually named accounts managed by a public charity—as donations to public, not private, foundations.

Donor-advised funds have been growing nationally as the amount of money made by the top 1 percent has grown: Contributions to donor-advised funds grew 15.1 percent in fiscal year 2016, according to The Chronicle of Philanthropy, while overall charitable contributions grew only 1.4 percent that year

Six of the top 10 philanthropies in the country last year, in terms of the amount of nongovernmental money raised, were donor-advised funds,

In addition, those funds with high payout rates could just be giving to another donor-advised fund, rather than to a public charity, Madoff says. One-quarter of donor-advised fund sponsors distribute less than 1 percent of their assets in a year,

Groups that administer donor-advised funds defend their payout rate, saying distributions from donor-advised funds are around 14 percent of assets a year. But that number can be misleading, because one donor-advised fund could give out all its money, while many more could give out none, skewing the data.

Donor-advised funds are especially popular in places like Silicon Valley because they provide tax advantages for donating appreciated stock, which many start-up founders have but don’t necessarily want to pay huge taxes on

Donors get a tax break for the value of the appreciated stock at the time they donate it, which can also spare them hefty capital-gains taxes. “Anybody with a business interest can give their business interest before it goes public and save huge amounts of taxes,”

Often, people give to donor-advised funds right before a public event like an initial public offering, so they can avoid the capital-gains taxes they’d otherwise have to pay, and instead receive a tax deduction. Mark Zuckerberg and Priscilla Chan gave $500 million in stock to the foundation in 2012, when Facebook held its initial public offering, and also donated $1 billion in stock in 2013

Wealthy donors can also donate real estate and deduct the value of real estate at the time of the donation—if they’d given to a private foundation, they’d only be able to deduct the donor’s basis value (typically the purchase price) of the real estate at the time they acquired it. The difference can be a huge amount of money in the hot market of California.

In Greece, an unlikely economic star since the pandemic, as many as 44% of all jobs are connected to tourism. 

Can Europe’s emerging “museum economy” support sustained wealth creation and the expansive welfare systems Europeans have become accustomed to since the end of World War II? And what happens if the dollar falls and the tourists leave?

Rent and other living expenses are rising in hot spots, making it harder for many locals to make ends meet. A heightened focus on tourism, which turns a quick profit but remains a low-productivity activity, tethers these economies to a highly cyclical industry

It also risks keeping workers and capital from more profitable areas, like tech and high-end manufacturing. 

some economists, residents and politicians are concerned about the boom’s long-term implications.

“It is literally, for Americans right now, the place to go,”

The strong dollar—and a powerful post-Covid recovery—has empowered millions of Americans who would have vacationed in the U.S. before the pandemic. They are now finding they can afford a lavish European holiday.

One reason is the brutal sovereign debt crisis that hit the continent’s south especially hard just over a decade ago. Unable to stimulate demand with public spending or to energize exports by devaluing their currency—the euro, which is shared by 20 states—those countries could only boost their competitiveness by lowering wages.

“Your dollar goes a lot further,” Cross said over coffee in the lobby of her five-star hotel. “You don’t feel you’re scrounging as much.”

Tourism now generates one-fifth of economic output in Lisbon and supports one in four jobs. That boom has reverberated far beyond the capital.

Portugal’s gross domestic product grew nearly 8% between 2019 and 2024, compared with less than 1% for Germany,

The government recorded a rare 1.2% of GDP budget surplus last year, and its debt-to-GDP ratio is expected to fall to 95% this year, the lowest since 2009

Portugal’s population is growing again after years of decline, thanks in part to an influx of migrant workers and to various tax incentives and investor visas that have attracted high-income workers. 

Moedas, Lisbon’s mayor, says there’s room for further growth. For a city that doubles in size to around one million every day, including commuters, only around 35,000 are tourists, he said. “We are very far from a situation of so-called overtourism.”

The trend is part of a global readjustment following the Covid-19 lockdowns. Spending on travel and hospitality worldwide grew roughly seven times faster than the global economy over the past two years, according to Oxford Economics. That pattern is expected to continue for the next decade, though to a lesser degree.

Europe, especially southern Europe, has benefited more than many other regions. Though it is home to just 5% of the world’s population, the European Union received around one-third of all international tourist dollars—more than half a trillion dollars—last year. This is up roughly threefold over two decades, and compares with about $150 billion for the U.S., where tourism has been slower to rebound.

In Portugal, a country of 10 million that juts out into the North Atlantic from Spain, Americans recently surpassed Spaniards as the biggest group of foreign tourists. 

This and a real estate collapse that left hundreds of thousands of workers suddenly available made the region’s tourist industry ultracompetitive, much cheaper than Caribbean beach destinations and on a par with Latin American destinations like Mexico. 

Once an owner of TAP, Neeleman increased the number of direct flights to the U.S. eightfold between 2015 and 2020, adding major hubs such as JFK and Boston Logan, betting that would open up an untapped market. As bookings soared, other U.S. airlines followed. 

“It was actually comical, because I went from knowing no one who had been to Portugal to everyone telling me they were going to Portugal,”

For Gonçalo Hall, a 36-year-old tech worker, the influx of foreign cash that has transformed Lisbon has been overwhelmingly beneficial for the city. When he lived in the capital 15 years ago, he wouldn’t walk in the historic downtown after 8 p.m. It was “full of homeless people, not safe. Lots of empty and abandoned buildings,” he said. 

“The quality of life in Lisbon doesn’t match the prices. Even expats are leaving,” said Hall, who moved to the Atlantic island of Madeira during the pandemic and continues to work remotely.  

The average Portuguese employee earns around €1,000 a month after tax, or around $1,100 a month, and only 2% earn more than €2,000. A one-bedroom apartment in Lisbon can easily cost more than €500,000 to buy, or over €1,200 a month to rent. Rents in nearby cities are also climbing as people leave the capital, squeezed out as lucrative short-term rentals transform the housing market. 

Jessica Ribeiro, a 35-year-old sociologist, pays around €490 a month for an apartment that she shares with her ex-husband in a town close to Lisbon. Neither can afford to leave. Both make a little more than the minimum wage of €820 a month, and soaring rents mean it is impossible to find an apartment in the neighborhood for less than €700, Ribeiro said. 

“The harm that tourism has brought is infinitely bigger than the benefits,” Ribeiro said. “It sends people away from their place of work, making their lives much harder.” 

A frequent complaint from residents and housing advocates is that some of the boom’s biggest winners are American companies, from Airbnb to Uber, which often pay little tax in the places where they do most of their business.

Lisbon is cracking down on Airbnbs and increasing taxes on tourists, doubling the nightly city tax from €2 to €4, which should raise €80 million a year. Airbnb has paid Lisbon and Porto, Portugal’s two biggest cities, more than €63 million after entering into voluntary tax collection agreements with local officials. Moedas said he is considering “a bit more regulation” of the city’s many Ubers, whose drivers he said don’t always respect traffic rules. 

Around nine in 10 Airbnb hosts in Portugal rent their family home and almost half say the extra income helps them afford to stay in their homes, according to a spokesperson for the company. “Guests using our platform account for just 10% of total nights booked in Portugal, and we follow the rules and only allow listings that are registered with local authorities,”

Higher rents are forcing many businesses and cultural and social spaces catering to locals to close, according to Silva. “This is not an economy that is serving the needs of the majority of people,” she said.

Signs of discontent are bubbling up across the region. Tens of thousands of local residents marched in Spain’s Balearic and Canary islands in recent months to protest mass tourism and overcrowding. On Mallorca, activists have put up fake signs at some popular beaches warning in English of the risk of falling rocks or dangerous jellyfish to deter tourists, according to social-media posts.

Serving foreigners is difficult to scale up and is more exposed to economic headwinds. Like the discovery of oil, southern Europe’s new focus on tourism can crowd out higher-value activities by hogging capital and workers, a phenomenon some economists have dubbed the “beach disease.”

“Portugal isn’t an industrialized country. It’s just the playground of the EU,” said Priscila Valadão, a 43-year-old administrative assistant in Lisbon. She makes €905 a month and rents a room from a friend for €250 a month. “The type of jobs being offered…are restricted to a type of activity that really doesn’t enrich the country,”

For Europe’s policymakers, having people open hotels or restaurants is easier than incentivizing them to build up advanced manufacturing, which is capital intensive and takes a long time to pay off, said Marcos Carias, an economist with French insurer Coface. 

“Tourism is the easy way out,” Carias said. “What is the incentive to look for ingenuity and go through the pain of creating new economic value if tourism works as a short-term solution?”

Proponents say tourism attracts capital to poor regions, and can serve as a base to build a more diversified economy. Lisbon’s Moedas said he is trying to leverage the influx of foreign visitors to build up sectors such as culture and technology, including by developing conferences and cultural events. 

“Some extreme left parties basically say we need to reduce tourism,” Moedas said, but that is the wrong approach. “What we have to do is to increase other sectors like innovation, technology…. We should still invest in tourism, but we should go up the ladder.”

While Dias, the hotel owner, is diversifying into nightlife, he refuses to envisage a future where the sector would have to rely heavily on visitors from elsewhere.

More than one-third of highly qualified Portuguese students leave the country after graduating,

Even higher-paid technology workers have started decamping to cheaper places. 

Tiago Araújo, chief executive of tourism tech startup HiJiffy, has held on to his employees but says many of them have been moving out of Lisbon. The trend, which started during Covid, is now being primarily driven by the housing crisis.

In Athens, Mayor Haris Doukas says he is working on extending the tourist season, increasing the average length of stay and promoting specific types of tourism, such as organizing conferences and business meetings, to attract visitors with higher purchasing power. He’s also called for new taxes to help the city accommodate the millions of additional tourists thronging to the ancient capital.

If Americans stop coming to Lisbon, he said, “I don’t think we can charge this kind of [price] because we will have to go to Europeans, and the Europeans, they don’t have money.”