17 ms·

I don't see how this "AI rush" isn't going to skew markets, skew the financials of big tech and create a bubble in the space.

gitfan86 3y ago
There is a bubble in the valuations of LLMs similar to the valuation of NFTs. Anyone can create a modified version of Llama2.
- ctrw 3y ago
  Yes and each of those costs between half a million in pure compute to a few hundred million for fine tuning/training.
- thethimble 3y ago
  The last All in Podcast had an interesting take on this: Most of the R&D and Capex going into LLMs/GenAI is speculative. The investments haven’t translated into real revenue yet. The expectation is that there will be a large pot of revenue at the end of the road, but we haven’t seen the killer apps to substantiate this. This makes for a perfect bubble if the promise doesn’t pan out. Relatedly Nvidia’s revenue - as impressive as the recent growth has been - is fully exposed to this risk. Of course it’s possible (likely?) that there will be major wins from this tech, but the fact that there isn’t definitive proof (in the form of revenue) yet represents real risk.
  - andai 3y ago
    Well, the major win will be when AI makes human labor uneconomical. Not sure what that's going to do to the stock prices though...
  - pantulis 3y ago
    > The expectation is that there will be a large pot of revenue at the end of the road, but we haven’t seen the killer apps to substantiate this Imho, unlike crypto and NFT, AI is not a solution in search of a problem. While there is a lot of hand waving, it is not very adventurous to predict that there will be significant productivity gains by adding AI on top of current business processes. Thus the killer apps will be... the same apps we are using today with a touch of AI magic dust.
    - mnky9800n 3y ago
      Also, outside of making chatbots and waifus there's a lot of hard tech problems waiting for ai type solutions.
  - JumpCrisscross 3y ago
    > All in Podcast Calacanis and Palihapitiya are the Jim Kramers of tech.
    - thethimble 3y ago
      This kind of response is level 0 or level 1 on PG’s hierarchy of disagreement https://paulgraham.com/disagree.html https://paulgraham.com/disagree.html
  - chasd00 3y ago
    that's the root of my skepticism. I've yet to see huge transformational projects involving AI from the grapevine of my 750k+ employee consulting firm, all I hear about are experiments, webinars, and POCs. What I see in the news regarding the few projects live is not good, AirCanada and some others where the AI went wrong and now the company has to backtrack. There's no doubt the tech community is all excited because genai, indeed, helps write code but I've yet to hear a large company like Coca Cola announce large AI transformation projects the way they announced large cloud transformation projects a few years ago. I get more and more on the AI bandwagon as time goes on but I still have a pretty healthy skepticism on how deep and wide the tech will penetrate day to day business at enterprises and that's where the ROI is.
- codexon 3y ago
  The open source models are VERY far behind gpt4.
tmpz22 3y ago
Theres a lot of not-great software that can have bites taken out of it by LLM advancements and most of the incumbents are going to pay into it because they just can't compete in the AI field. Can LLMs become reliable enough at transforming data that it can replace or augment the current slew of ETL tools? Can it produce visualizations better then current BI tools? Can copilot compete with a junior developer? Im not sure, but at this point Im willing to say 50/50 which is worth the bet.
esics6A 3y ago
This is a bubble and one that will burst very hard. AI is the perfect technology for this. It's opaque and most investors (who barely understand tech in general) have no clue what it really does or how it works. This is the closest we've ever had to multiple large respected tech companies selling "snake oil" a cure all. The capabilities of AI they mention as if they're available today are literally many decades and generations away. Automating information workers, creatives and engineers will take AGI that's simply impossible with our technology. When the AI bubble bursts I wouldn't be surprised if takes down major tech companies with it.
- jstummbillig 3y ago
  Can you be specific about what the bubble is? I am getting 100x value out of my 30 chatgpt bucks. I am doing things that I could not have done pre-gpt4, being more productive by a factor of, idk, 1.25 maybe. It's quite simply the largest/simplest productivity improvement in my life, so far. Given it's only going to get better, unless they are underpricing the service by a enormous margin (as in: defrauding shareholders margin) I have a hard time understanding what shape the bubble could possibly have.
  - Judgmentality 3y ago
    Do any AI companies actually turn a profit? I feel like the only real winner is Nvidia because they are selling shovels to the gold diggers, while all the gold diggers are trying to outspend each other without a business model that has any consideration for unit economics.
    - jstummbillig 3y ago
      I love a prudent take on company money – but given how investing works and how young this entire thing is and the (to me) absolutely real value, I find it hard to be very worried about that part right now. I can literally run a ballpark model on my MB Pro, right now, at marginal additional electrical cost. I will be the first to say that all of this (including GPT4) is still fairly garbage, but I don't know when there was the last time in the history of tech, where less fantasy to get from here to what will be good was required.
PheonixPharts 3y ago
I've stopped believing in rational markets a long time ago. For the people behind this funding madness: > to skew markets, skew the financials of big tech and create a bubble in the space. Are the intended consequences of this. The people behind the money in AI, just like the people behind the money in crypto, don't care if there's a reality to all of this, they just care if they can make a lot of money while the music is playing. I really thought 2022 was going to be the beginning of tech returning to reality, but naively didn't understand that this would entail a lot of people with a lot of money losing money, and that's not going to happen. As with all bubbles, the interesting thing isn't pointing out there's a bubble, we've been living in many bubbles for decades now. The interesting thing is pointing out what will make it pop. So long as globally money keeps pouring into US markets we'll see this continue. On the plus side, at least LLMs are a lot of fun to work and play with!
- rchaud 3y ago
  "Efficient markets" deliver normal returns. The people with the most capital to throw at things are trying to create monopolies that can generate supernormal returns. This is already a highly unstable arrangement, and it's made more dangerous by introducing impurities like artificially suppressed interest rates and SPAC IPOs.
- throwup238 3y ago
  > I've stopped believing in rational markets a long time ago. It makes a lot more sense if you think of markets as just a bunch of coked out hairless monkeys. Then "rational" becomes a lot more meaningful.
- DANmode 3y ago
  > I've stopped believing in rational markets a long time ago. Agreed. Sentiment is everything.
- philoinvestor 3y ago
  With the way NVIDIA is moving and how it's seeding AI startups, you could be right about them actively trying to do this. But there is a reality beyond our ability to predict it..
deleted 3y ago
[deleted]

gitfan86 3y ago

There is a bubble in the valuations of LLMs similar to the valuation of NFTs. Anyone can create a modified version of Llama2.

ctrw 3y ago
Yes and each of those costs between half a million in pure compute to a few hundred million for fine tuning/training.
thethimble 3y ago
The last All in Podcast had an interesting take on this: Most of the R&D and Capex going into LLMs/GenAI is speculative. The investments haven’t translated into real revenue yet. The expectation is that there will be a large pot of revenue at the end of the road, but we haven’t seen the killer apps to substantiate this. This makes for a perfect bubble if the promise doesn’t pan out. Relatedly Nvidia’s revenue - as impressive as the recent growth has been - is fully exposed to this risk. Of course it’s possible (likely?) that there will be major wins from this tech, but the fact that there isn’t definitive proof (in the form of revenue) yet represents real risk.
- andai 3y ago
  Well, the major win will be when AI makes human labor uneconomical. Not sure what that's going to do to the stock prices though...
- pantulis 3y ago
  > The expectation is that there will be a large pot of revenue at the end of the road, but we haven’t seen the killer apps to substantiate this Imho, unlike crypto and NFT, AI is not a solution in search of a problem. While there is a lot of hand waving, it is not very adventurous to predict that there will be significant productivity gains by adding AI on top of current business processes. Thus the killer apps will be... the same apps we are using today with a touch of AI magic dust.
  - mnky9800n 3y ago
    Also, outside of making chatbots and waifus there's a lot of hard tech problems waiting for ai type solutions.
- JumpCrisscross 3y ago
  > All in Podcast Calacanis and Palihapitiya are the Jim Kramers of tech.
  - thethimble 3y ago
    This kind of response is level 0 or level 1 on PG’s hierarchy of disagreement https://paulgraham.com/disagree.html https://paulgraham.com/disagree.html
- chasd00 3y ago
  that's the root of my skepticism. I've yet to see huge transformational projects involving AI from the grapevine of my 750k+ employee consulting firm, all I hear about are experiments, webinars, and POCs. What I see in the news regarding the few projects live is not good, AirCanada and some others where the AI went wrong and now the company has to backtrack. There's no doubt the tech community is all excited because genai, indeed, helps write code but I've yet to hear a large company like Coca Cola announce large AI transformation projects the way they announced large cloud transformation projects a few years ago. I get more and more on the AI bandwagon as time goes on but I still have a pretty healthy skepticism on how deep and wide the tech will penetrate day to day business at enterprises and that's where the ROI is.
codexon 3y ago
The open source models are VERY far behind gpt4.

tmpz22 3y ago

Theres a lot of not-great software that can have bites taken out of it by LLM advancements and most of the incumbents are going to pay into it because they just can't compete in the AI field. Can LLMs become reliable enough at transforming data that it can replace or augment the current slew of ETL tools? Can it produce visualizations better then current BI tools? Can copilot compete with a junior developer? Im not sure, but at this point Im willing to say 50/50 which is worth the bet.

esics6A 3y ago

This is a bubble and one that will burst very hard. AI is the perfect technology for this. It's opaque and most investors (who barely understand tech in general) have no clue what it really does or how it works. This is the closest we've ever had to multiple large respected tech companies selling "snake oil" a cure all. The capabilities of AI they mention as if they're available today are literally many decades and generations away. Automating information workers, creatives and engineers will take AGI that's simply impossible with our technology. When the AI bubble bursts I wouldn't be surprised if takes down major tech companies with it.

jstummbillig 3y ago
Can you be specific about what the bubble is? I am getting 100x value out of my 30 chatgpt bucks. I am doing things that I could not have done pre-gpt4, being more productive by a factor of, idk, 1.25 maybe. It's quite simply the largest/simplest productivity improvement in my life, so far. Given it's only going to get better, unless they are underpricing the service by a enormous margin (as in: defrauding shareholders margin) I have a hard time understanding what shape the bubble could possibly have.
- Judgmentality 3y ago
  Do any AI companies actually turn a profit? I feel like the only real winner is Nvidia because they are selling shovels to the gold diggers, while all the gold diggers are trying to outspend each other without a business model that has any consideration for unit economics.
  - jstummbillig 3y ago
    I love a prudent take on company money – but given how investing works and how young this entire thing is and the (to me) absolutely real value, I find it hard to be very worried about that part right now. I can literally run a ballpark model on my MB Pro, right now, at marginal additional electrical cost. I will be the first to say that all of this (including GPT4) is still fairly garbage, but I don't know when there was the last time in the history of tech, where less fantasy to get from here to what will be good was required.

PheonixPharts 3y ago

I've stopped believing in rational markets a long time ago. For the people behind this funding madness: > to skew markets, skew the financials of big tech and create a bubble in the space. Are the intended consequences of this. The people behind the money in AI, just like the people behind the money in crypto, don't care if there's a reality to all of this, they just care if they can make a lot of money while the music is playing. I really thought 2022 was going to be the beginning of tech returning to reality, but naively didn't understand that this would entail a lot of people with a lot of money losing money, and that's not going to happen. As with all bubbles, the interesting thing isn't pointing out there's a bubble, we've been living in many bubbles for decades now. The interesting thing is pointing out what will make it pop. So long as globally money keeps pouring into US markets we'll see this continue. On the plus side, at least LLMs are a lot of fun to work and play with!

rchaud 3y ago
"Efficient markets" deliver normal returns. The people with the most capital to throw at things are trying to create monopolies that can generate supernormal returns. This is already a highly unstable arrangement, and it's made more dangerous by introducing impurities like artificially suppressed interest rates and SPAC IPOs.
throwup238 3y ago
> I've stopped believing in rational markets a long time ago. It makes a lot more sense if you think of markets as just a bunch of coked out hairless monkeys. Then "rational" becomes a lot more meaningful.
DANmode 3y ago
> I've stopped believing in rational markets a long time ago. Agreed. Sentiment is everything.
philoinvestor 3y ago
With the way NVIDIA is moving and how it's seeding AI startups, you could be right about them actively trying to do this. But there is a reality beyond our ability to predict it..

deleted 3y ago

[deleted]