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I'm getting very strong 1998 .COM vibes from AI. Replace Internet with AI in the following quote from the New York Times, November 11, 1996[0]: "For many peop

I'm getting very strong 1998 .COM vibes from AI. Replace Internet with AI in the following quote from the New York Times, November 11, 1996[0]: "For many people, AI could replace the functions of a broker, whose stock in trade is information, advice and execution of transactions, all of which may be cheap and easy to find on line. AI also is prompting some business executives to wonder whether they really need a high-priced Wall Street investment bank to find backers for their companies when they may now be able to reach so many potential investors directly over the Net. And ultimately, AI's ability to bring buyers and sellers together directly may change the very nature of American financial markets." It's a cautionary tale. Obviously, the Internet did live up to the hype. Just after it wiped out millions of retail investors... [0]https://www.nytimes.com/1996/11/11/business/slow-transition-for-investing-stock-market-meets-internet.html https://www.nytimes.com/1996/11/11/business/slow-transition-...

enos_feedler 3y ago
I did the same s/ai/internet thing yesterday when I asked Bard to give me analyst ratings for cisco stock before the dot-com crash: "The highest analyst price target for Cisco stock before the dot-com crash was $125 per share. This target was set by Merrill Lynch analyst Henry Blodget in April 2000, just as the dot-com bubble was beginning to burst. Blodget's target was based on his belief that Cisco was well-positioned to benefit from the continued growth of the Internet." I was looking to compare with analyst targets set for NVDA yesterday. Analysts now are saying the exact thing about Nvidia being able to capture the continued growth of AI: "JPMorgan set its price target to $500 Wednesday, double its previous estimate and among the highest out of the big banks. Analyst Harlan Sur said this is the “first massive wave of demand in generative AI,” with more gains to follow. He reiterated his overweight rating on the stock." The ironic bit of course is that my own research here is powered by Bard which probably used an NVDA gpu to train it. But even those dot-com analyst calls were probably emailed around on equipment sold by Cisco. If I were holding that stock right now, regardless of how right these analysts end up being over the next year or so. I would sell today
- bsilvereagle 3y ago
  > The ironic bit of course is that my own research here is powered by Bard which probably used an NVDA gpu to train it Google uses in-house TPUs for Bard. https://www.hpcwire.com/2023/04/10/google-ai-supercomputer-shows-the-potential-of-optical-interconnects/ https://www.hpcwire.com/2023/04/10/google-ai-supercomputer-s...
kenjackson 3y ago
It is fairly different though in scope. NVidia clearly is making tons of money from AI. Probably after OpenAI they are the company most directly impacted by AI. The .com boom of the late 90s was different. Companies who had very little to do with the internet were adding ".com" to their name. I was a penny stock trader and that was one of the fastest ways companies would increase value -- add ".com" and issue a press release about how they plan to be "internet enabled" or "create a web presence". Today most companies aren't getting a bump by talking about AI. You don't see Spotify changing their name to Spotify.AI. Companies are dabbling in offering AI, e.g., SnapChat, but they aren't shifting their whole focus to AI. Now there is an industry of small companies building on AI, and I think that's healthy. A handful will find something of value. Going back to the early .com days -- I remember companies doing video/movie streaming over the web and voice chats. None of those early companies, AFAIK, still exist. But the market for this technology is bigger than its ever been.
- ztrww 3y ago
  I would be comparing how someone like Intel did during dot.com instead of Pets.com etc. Of course it far from being the same and Intel did struggle in the early 00’s but they still ended up dominating their market which had significant growth in the 20 years after dot.com. Did Intel ever ‘grow’ into their massively overvalued valuation? No.. their stock never even reached it’s September, 2000 peak yet. There is a chance that AMD, Intel, maybe Google etc. catch up with Nvidia in a year or two and data center GPUs become a commodity (clearly the entry bar should be lower than what it was for x86 CPUs back in) and what happens then?
  - haldujai 3y ago
    > There is a chance that AMD, Intel, maybe Google etc. catch up with Nvidia in a year or two and data center GPUs become a commodity (clearly the entry bar should be lower than what it was for x86 CPUs back in) and what happens then? Realistically, there is next to zero chance Intel (especially given the Arc catastrophe and foundry capabilities) or AMD (laundry list of reasons) catchup within 2 years. Safe bet Google's TPUv5 will be competitive with the H100, as the v4 was with the A100, but their offering clearly hasn't impacted market share thus far and there is no indication Google intends to make their chips available outside of GCP. With that said I also agree the current valuation seems too high, but I highly doubt there is a serious near-term competitor. I think it is more likely that current growth projections are too aggressive and demand will subside before they grow into their valuation, especially as the space evolves with open source foundation models and techniques come out (like LoRA/PEFT) that substantially reduce demand for the latest chips.
caeril 3y ago
As someone who has persistently laughed off the "it's different this time" idiocy from "revolutionary" technology, and as someone who has called 10 out of the last 4 bubbles, I would like to say that it really is different this time. We're on the precipice of obviating 80% of white collar work, and 99% of Graeber's Bullshit Jobs.
- pixl97 3y ago
  Massively decreasing pay, while not solving the asset inflation problem... this ain't going to go well at all.
  - rayval 3y ago
    Economic dislocation will lead to rise of angry/insane populists/nationalists (like Trump 2.0) in multiple regions. Already a trend, will get worse. One unfortunate but plausible outcome is catastrophic global conflict. To avoid this, countries need to plan for and mitigate the social effects of economic dislocation, such as UBI. Unfortunately that ain't gonna happen. Brace yourselves.
- Nesco 3y ago
  Could you please detail why do you think Machine Learning will obviate jobs that are already useless?
  - kajaktum 3y ago
    Easy, managers will have to do what they usually told their useless subordinates to do. “Write a report on this thing that no one will ever read anyway”. Then even if the higher ups actually read it, they will ask for another LLM to provide a summary. There’s no shortage of useless jobs out there. Cashiers for one.
  - laratied 3y ago
    We won't. This is the myth of Homo economicus. "humans as agents who are consistently rational and narrowly self-interested, and who pursue their subjectively defined ends optimally." We will figure out new, irrational and suboptiomal ways to make new bullshit jobs. The AI ethics department will be hiring a ton of people.
01100011 3y ago
> …2 years ago we were selling at 10 times revenues when we were at $64. At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were you thinking? Sun Microsystems CEO Scott McNealy in 2002 (source https://smeadcap.com/missives/the-mcnealy-problem/#:~:text=At%2010%20times%20revenues%2C%20to,get%20that%20by%20my%20shareholders https://smeadcap.com/missives/the-mcnealy-problem/#:~:text=A....)
codethief 3y ago
Whether are not AI will follow the same destiny as the dot com bubble, doesn't really matter: In contrast to fancy AI startups, Nvidia is already making money (in fact it is highly profitable). They are basically adhering to the principle "During a goldrush, sell shovels."
kgwgk 3y ago
‘At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were you thinking?’— Scott McNealy, Business Week, 2002 https://www.bloomberg.com/news/articles/2002-03-31/a-talk-with-scott-mcnealy https://www.bloomberg.com/news/articles/2002-03-31/a-talk-wi...
- bluecalm 3y ago
  I mean it's completely wrong though as you still have shares in the company after getting paid. A very good rule of thumb is: if someone's mentions dividends when discussing valuation they are clueless. It doesn't always work (paying high dividends has implications ranging from clueless management to political pressure on the company) but it's a very good rule that the argument is nonsense.
- TechBro8615 3y ago
  This ignores inflation and other factors in the macro environment. But ultimately, any argument that a stock is mispriced is definitionally wrong, because the price of a stock is what someone is willing to pay for it. It's a cliche but it's also an incontrovertible fact, even if people like to ignore it because it invalidates all their arguments.
  - dchftcs 3y ago
    >because the price of a stock is what someone is willing to pay for it. It's only true assuming fully efficient markets, which even academic economists studying markets don't do. The fact someone is willing to pay $100 for one share doesn't mean every share is worth $100. The fair value of a stock should always depend on the expected cash flow you can receive by holding the stock for perpetuity. Nobody can predict the future, so nobody really knows what the fair value is. But, if you had 1 trillion dollars and still wouldn't want to pay 1 trillion to acquire an entire company, because you feel you very likely can't make that 1 trillion back, then it's fair to say the company is not worth 1 trillion to you.
belter 3y ago
https://www.reddit.com/r/wallstreetbets/comments/13qk0vw/nvidia_earnings_do_not_matter/ https://www.reddit.com/r/wallstreetbets/comments/13qk0vw/nvi...
shrimpx 3y ago
I don't think this is just another bubble about to burst. I mean, the bubble bears have been talking about the imminently bursting bubble since 2016. The past couple years are what that burst bubble looks like. Hype-driven companies going out of business, disappearing unicorns, pullback on VC, massive layoffs, bank implosions, tons of tech stocks pulled back by 70-90%, consequences on the likes of Theranos, SBF, etc. The current AI wave is 95% hype (ultimately useless/broken crap invoking LLM APIs or AI art app du jour) but some of the companies are clearly useful (transcription, summarization, categorization, code generation, next-gen search engine, etc.) and will disrupt traditional services and scale large. And AI infra companies (AI hardware, AI software on top of hardware, and generic AI model SaaS) will make tons of money as those app companies scale.
- 11thEarlOfMar 3y ago
  You are correct that the overall economic backdrop is quite different from the late 90s. Nonetheless, the AI news cycle is continuous (like .COM was) and the attribution of NVDA's +25% romp to the prospects of AI grabs the attention of retail investors, who tuned in to see AVGO +20% and the likes of MSFT, TSLA, NFLX and GOOG add 5% in 2 days. The longer that goes on, the more we'll see investors looking for reasons that companies will benefit from AI and want to buy in, then, companies that don't have a strong AI story will need to get on the train and start buying all the AI startups that have materialized over the last couple of years. Then, we start seeting AI IPOs with increasingly sketchy histories. (sorry, .COM PTSD kicking in...) All this could happen in a weak market. In fact, strong returns in AI during a weak overall market will simply call more attention to it.
- fennecfoxy 3y ago
  What ElevenLabs is doing with synthesised voices is absolutely amazing. Not quite fully realistic yet, but they're the best I've ever heard. In addition 2minute papers viewers have seen that AI generated media is coming fast, soon we'll go from Unity/Unreal having an AI "assistant" that can generate models "make a chair for two characters in the same style as this single person chair" to "based on the current information you know about this game world, generate a new zone for the player that includes x, y, z challenges, resources. Create models, textures, animations for all of this" etc. And this is only implications for making games, let along all the other stuff we could get it to do. The video on automatic animations (https://www.youtube.com/watch?v=wAbLsRymXe4 https://www.youtube.com/watch?v=wAbLsRymXe4 and others) is super cool, once refined it's going to be possible to have a system that can: generate a character model, texture it, automatically animate it for that particular character (young, old, how many limbs) and adjust as needed "right foot becomes injured, so limp" generated voices and unique dialogue set within the realm of the overall game world. I think main plots will still be controlled by game makers, but interaction with rando npcs/side-quests could be totally organic.
ldng 3y ago
Nah, not there yet. Just in the "Blockchain" realm for now ;-)

enos_feedler 3y ago

I did the same s/ai/internet thing yesterday when I asked Bard to give me analyst ratings for cisco stock before the dot-com crash: "The highest analyst price target for Cisco stock before the dot-com crash was $125 per share. This target was set by Merrill Lynch analyst Henry Blodget in April 2000, just as the dot-com bubble was beginning to burst. Blodget's target was based on his belief that Cisco was well-positioned to benefit from the continued growth of the Internet." I was looking to compare with analyst targets set for NVDA yesterday. Analysts now are saying the exact thing about Nvidia being able to capture the continued growth of AI: "JPMorgan set its price target to $500 Wednesday, double its previous estimate and among the highest out of the big banks. Analyst Harlan Sur said this is the “first massive wave of demand in generative AI,” with more gains to follow. He reiterated his overweight rating on the stock." The ironic bit of course is that my own research here is powered by Bard which probably used an NVDA gpu to train it. But even those dot-com analyst calls were probably emailed around on equipment sold by Cisco. If I were holding that stock right now, regardless of how right these analysts end up being over the next year or so. I would sell today

bsilvereagle 3y ago
> The ironic bit of course is that my own research here is powered by Bard which probably used an NVDA gpu to train it Google uses in-house TPUs for Bard. https://www.hpcwire.com/2023/04/10/google-ai-supercomputer-shows-the-potential-of-optical-interconnects/ https://www.hpcwire.com/2023/04/10/google-ai-supercomputer-s...

kenjackson 3y ago

It is fairly different though in scope. NVidia clearly is making tons of money from AI. Probably after OpenAI they are the company most directly impacted by AI. The .com boom of the late 90s was different. Companies who had very little to do with the internet were adding ".com" to their name. I was a penny stock trader and that was one of the fastest ways companies would increase value -- add ".com" and issue a press release about how they plan to be "internet enabled" or "create a web presence". Today most companies aren't getting a bump by talking about AI. You don't see Spotify changing their name to Spotify.AI. Companies are dabbling in offering AI, e.g., SnapChat, but they aren't shifting their whole focus to AI. Now there is an industry of small companies building on AI, and I think that's healthy. A handful will find something of value. Going back to the early .com days -- I remember companies doing video/movie streaming over the web and voice chats. None of those early companies, AFAIK, still exist. But the market for this technology is bigger than its ever been.

ztrww 3y ago
I would be comparing how someone like Intel did during dot.com instead of Pets.com etc. Of course it far from being the same and Intel did struggle in the early 00’s but they still ended up dominating their market which had significant growth in the 20 years after dot.com. Did Intel ever ‘grow’ into their massively overvalued valuation? No.. their stock never even reached it’s September, 2000 peak yet. There is a chance that AMD, Intel, maybe Google etc. catch up with Nvidia in a year or two and data center GPUs become a commodity (clearly the entry bar should be lower than what it was for x86 CPUs back in) and what happens then?
- haldujai 3y ago
  > There is a chance that AMD, Intel, maybe Google etc. catch up with Nvidia in a year or two and data center GPUs become a commodity (clearly the entry bar should be lower than what it was for x86 CPUs back in) and what happens then? Realistically, there is next to zero chance Intel (especially given the Arc catastrophe and foundry capabilities) or AMD (laundry list of reasons) catchup within 2 years. Safe bet Google's TPUv5 will be competitive with the H100, as the v4 was with the A100, but their offering clearly hasn't impacted market share thus far and there is no indication Google intends to make their chips available outside of GCP. With that said I also agree the current valuation seems too high, but I highly doubt there is a serious near-term competitor. I think it is more likely that current growth projections are too aggressive and demand will subside before they grow into their valuation, especially as the space evolves with open source foundation models and techniques come out (like LoRA/PEFT) that substantially reduce demand for the latest chips.

caeril 3y ago

As someone who has persistently laughed off the "it's different this time" idiocy from "revolutionary" technology, and as someone who has called 10 out of the last 4 bubbles, I would like to say that it really is different this time. We're on the precipice of obviating 80% of white collar work, and 99% of Graeber's Bullshit Jobs.

pixl97 3y ago
Massively decreasing pay, while not solving the asset inflation problem... this ain't going to go well at all.
- rayval 3y ago
  Economic dislocation will lead to rise of angry/insane populists/nationalists (like Trump 2.0) in multiple regions. Already a trend, will get worse. One unfortunate but plausible outcome is catastrophic global conflict. To avoid this, countries need to plan for and mitigate the social effects of economic dislocation, such as UBI. Unfortunately that ain't gonna happen. Brace yourselves.
Nesco 3y ago
Could you please detail why do you think Machine Learning will obviate jobs that are already useless?
- kajaktum 3y ago
  Easy, managers will have to do what they usually told their useless subordinates to do. “Write a report on this thing that no one will ever read anyway”. Then even if the higher ups actually read it, they will ask for another LLM to provide a summary. There’s no shortage of useless jobs out there. Cashiers for one.
- laratied 3y ago
  We won't. This is the myth of Homo economicus. "humans as agents who are consistently rational and narrowly self-interested, and who pursue their subjectively defined ends optimally." We will figure out new, irrational and suboptiomal ways to make new bullshit jobs. The AI ethics department will be hiring a ton of people.

01100011 3y ago

> …2 years ago we were selling at 10 times revenues when we were at $64. At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were you thinking? Sun Microsystems CEO Scott McNealy in 2002 (source https://smeadcap.com/missives/the-mcnealy-problem/#:~:text=At%2010%20times%20revenues%2C%20to,get%20that%20by%20my%20shareholders https://smeadcap.com/missives/the-mcnealy-problem/#:~:text=A....)

codethief 3y ago

Whether are not AI will follow the same destiny as the dot com bubble, doesn't really matter: In contrast to fancy AI startups, Nvidia is already making money (in fact it is highly profitable). They are basically adhering to the principle "During a goldrush, sell shovels."

kgwgk 3y ago

‘At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were you thinking?’— Scott McNealy, Business Week, 2002 https://www.bloomberg.com/news/articles/2002-03-31/a-talk-with-scott-mcnealy https://www.bloomberg.com/news/articles/2002-03-31/a-talk-wi...

bluecalm 3y ago
I mean it's completely wrong though as you still have shares in the company after getting paid. A very good rule of thumb is: if someone's mentions dividends when discussing valuation they are clueless. It doesn't always work (paying high dividends has implications ranging from clueless management to political pressure on the company) but it's a very good rule that the argument is nonsense.
TechBro8615 3y ago
This ignores inflation and other factors in the macro environment. But ultimately, any argument that a stock is mispriced is definitionally wrong, because the price of a stock is what someone is willing to pay for it. It's a cliche but it's also an incontrovertible fact, even if people like to ignore it because it invalidates all their arguments.
- dchftcs 3y ago
  >because the price of a stock is what someone is willing to pay for it. It's only true assuming fully efficient markets, which even academic economists studying markets don't do. The fact someone is willing to pay $100 for one share doesn't mean every share is worth $100. The fair value of a stock should always depend on the expected cash flow you can receive by holding the stock for perpetuity. Nobody can predict the future, so nobody really knows what the fair value is. But, if you had 1 trillion dollars and still wouldn't want to pay 1 trillion to acquire an entire company, because you feel you very likely can't make that 1 trillion back, then it's fair to say the company is not worth 1 trillion to you.

belter 3y ago

https://www.reddit.com/r/wallstreetbets/comments/13qk0vw/nvidia_earnings_do_not_matter/ https://www.reddit.com/r/wallstreetbets/comments/13qk0vw/nvi...

shrimpx 3y ago

I don't think this is just another bubble about to burst. I mean, the bubble bears have been talking about the imminently bursting bubble since 2016. The past couple years are what that burst bubble looks like. Hype-driven companies going out of business, disappearing unicorns, pullback on VC, massive layoffs, bank implosions, tons of tech stocks pulled back by 70-90%, consequences on the likes of Theranos, SBF, etc. The current AI wave is 95% hype (ultimately useless/broken crap invoking LLM APIs or AI art app du jour) but some of the companies are clearly useful (transcription, summarization, categorization, code generation, next-gen search engine, etc.) and will disrupt traditional services and scale large. And AI infra companies (AI hardware, AI software on top of hardware, and generic AI model SaaS) will make tons of money as those app companies scale.

11thEarlOfMar 3y ago
You are correct that the overall economic backdrop is quite different from the late 90s. Nonetheless, the AI news cycle is continuous (like .COM was) and the attribution of NVDA's +25% romp to the prospects of AI grabs the attention of retail investors, who tuned in to see AVGO +20% and the likes of MSFT, TSLA, NFLX and GOOG add 5% in 2 days. The longer that goes on, the more we'll see investors looking for reasons that companies will benefit from AI and want to buy in, then, companies that don't have a strong AI story will need to get on the train and start buying all the AI startups that have materialized over the last couple of years. Then, we start seeting AI IPOs with increasingly sketchy histories. (sorry, .COM PTSD kicking in...) All this could happen in a weak market. In fact, strong returns in AI during a weak overall market will simply call more attention to it.
fennecfoxy 3y ago
What ElevenLabs is doing with synthesised voices is absolutely amazing. Not quite fully realistic yet, but they're the best I've ever heard. In addition 2minute papers viewers have seen that AI generated media is coming fast, soon we'll go from Unity/Unreal having an AI "assistant" that can generate models "make a chair for two characters in the same style as this single person chair" to "based on the current information you know about this game world, generate a new zone for the player that includes x, y, z challenges, resources. Create models, textures, animations for all of this" etc. And this is only implications for making games, let along all the other stuff we could get it to do. The video on automatic animations (https://www.youtube.com/watch?v=wAbLsRymXe4 https://www.youtube.com/watch?v=wAbLsRymXe4 and others) is super cool, once refined it's going to be possible to have a system that can: generate a character model, texture it, automatically animate it for that particular character (young, old, how many limbs) and adjust as needed "right foot becomes injured, so limp" generated voices and unique dialogue set within the realm of the overall game world. I think main plots will still be controlled by game makers, but interaction with rando npcs/side-quests could be totally organic.

ldng 3y ago

Nah, not there yet. Just in the "Blockchain" realm for now ;-)