4 ms·

$11M in revenue on $153M in cloud spend + salaries... Is the AI bubble going to pop hard soon?

by datadrivenangel 3y ago

_mlbt 3y ago
I think it will just shift away from relying on cloud providers for the underlying infrastructure.
- mr_toad 3y ago
  If the big AI companies go under there could be a lot of cheap second hand H100s on the market.
  - Havoc 3y ago
    We’re very far away from H100 firesales. Pretty sure capacity is booked out for years in advance still so even if it is a bubble and pops they’re unlikely to feature on eBay
romeros 3y ago
AI is not a bubble. Anymore than iphone / the internet was a bubble.
- Grimblewald 3y ago
  and yet there was a dotcom bubble.
- joezydeco 3y ago
  So where's the revenue?
  - consumer451 3y ago
    At companies with a business plan like Midjourney, which has 200M in revenue, 40 employees, and no investors.
    - xarope 3y ago
      MS is pushing hard with copilot for $30/user/month (annual commitment... I see they've learned from Adobe, sigh).
  - aurareturn 3y ago
    OpenAI, Microsoft, Google, and other companies who have existing products and added AI, such as Notion and Adobe.
- brailsafe 3y ago
  > Anymore than iphone / the internet was a bubble. By that do you mean they're technology platforms that outlive their obvious peak hype investment dice rolls?
- kromem 3y ago
  As a broad advancement that's true, but on individual companies there's going to be a ton that don't make it (which is the case for all companies, but for AI there's a significant number of new ones to fail within the next 10 years).
- eek2121 3y ago
  You have no way of knowing that. Remember, the parent poster is referring to the current ridiculous hype + push of current AI. Current AI models were trained on copyrighted material. Lawsuits are taking place. Many different members of the US government have indicated that just because AI is new and fancy, does not mean companies get to violate established law, including copyright. The head of the FTC was the most recent person to state this. OpenAI could very likely be sued out of existence. When that happens, all who invested in them could lose billions. The US government very likely won't intervene because there are multiple lessons to be learned from this. Courts are there to enforce the law, regardless of how "amazing" a technology may appear.
  - eek2121 3y ago
    To add something I forgot to say, yes, AI as a concept is here to stay. The current hype surrounding existing companies will not, however.
- Legend2440 3y ago
  The internet was a bubble too. Remember the dot com era? Just because the tech is legit doesn’t mean it can’t have a bubble.
- RamblingCTO 3y ago
  Do you know what a bubble is?
- Nullabillity 3y ago
  Then where's the use case?
- selfmodruntime 3y ago
  Except that they're not talking technology, they're talking economics. It may be significantly to earn a profit on selling an iPhone than selling continued AI access at a reasonable price.
MomoXenosaga 3y ago
Rookie numbers. How much did Uber lose? Wirecard?
- super256 3y ago
  Wirecard was a fraud, not a bubble.
- John23832 3y ago
  *In a ZIRP environment.
aurareturn 3y ago
>Is the AI bubble going to pop hard soon? No. I think it's going to get way bigger. When it pops, it will still be bigger than February 2024. Right now, the companies making money are Microsoft, OpenAI, AI chip makers. Google might join soon if they get their act together. Apple as well. Basically, only existing large tech companies + OpenAI are making money so far. However, I expect newer AI-only startups, to start making money in the near future. For example, I can see a company like Devin AI get loads of revenue very quick such as when ChatGPT launched. As for open source AI companies like Stability, they're in trouble. Unfortunately, no one has figured out how to make money with open source AI. It used to be that you'd open source your tool, get adoption, then offer a cloud. With open source AI so far, this hasn't come true for whatever reason. Perhaps we're just early.
checker659 3y ago
Yeah. Looks like the gods demand one last AI winter.

$11M in revenue on $153M in cloud spend + salaries... Is the AI bubble going to pop hard soon?

_mlbt 3y ago

I think it will just shift away from relying on cloud providers for the underlying infrastructure.

mr_toad 3y ago
If the big AI companies go under there could be a lot of cheap second hand H100s on the market.
- Havoc 3y ago
  We’re very far away from H100 firesales. Pretty sure capacity is booked out for years in advance still so even if it is a bubble and pops they’re unlikely to feature on eBay

romeros 3y ago

AI is not a bubble. Anymore than iphone / the internet was a bubble.

Grimblewald 3y ago
and yet there was a dotcom bubble.
joezydeco 3y ago
So where's the revenue?
- consumer451 3y ago
  At companies with a business plan like Midjourney, which has 200M in revenue, 40 employees, and no investors.
  - xarope 3y ago
    MS is pushing hard with copilot for $30/user/month (annual commitment... I see they've learned from Adobe, sigh).
- aurareturn 3y ago
  OpenAI, Microsoft, Google, and other companies who have existing products and added AI, such as Notion and Adobe.
brailsafe 3y ago
> Anymore than iphone / the internet was a bubble. By that do you mean they're technology platforms that outlive their obvious peak hype investment dice rolls?
kromem 3y ago
As a broad advancement that's true, but on individual companies there's going to be a ton that don't make it (which is the case for all companies, but for AI there's a significant number of new ones to fail within the next 10 years).
eek2121 3y ago
You have no way of knowing that. Remember, the parent poster is referring to the current ridiculous hype + push of current AI. Current AI models were trained on copyrighted material. Lawsuits are taking place. Many different members of the US government have indicated that just because AI is new and fancy, does not mean companies get to violate established law, including copyright. The head of the FTC was the most recent person to state this. OpenAI could very likely be sued out of existence. When that happens, all who invested in them could lose billions. The US government very likely won't intervene because there are multiple lessons to be learned from this. Courts are there to enforce the law, regardless of how "amazing" a technology may appear.
- eek2121 3y ago
  To add something I forgot to say, yes, AI as a concept is here to stay. The current hype surrounding existing companies will not, however.
Legend2440 3y ago
The internet was a bubble too. Remember the dot com era? Just because the tech is legit doesn’t mean it can’t have a bubble.
RamblingCTO 3y ago
Do you know what a bubble is?
Nullabillity 3y ago
Then where's the use case?
selfmodruntime 3y ago
Except that they're not talking technology, they're talking economics. It may be significantly to earn a profit on selling an iPhone than selling continued AI access at a reasonable price.

MomoXenosaga 3y ago

Rookie numbers. How much did Uber lose? Wirecard?

super256 3y ago
Wirecard was a fraud, not a bubble.
John23832 3y ago
*In a ZIRP environment.

aurareturn 3y ago

>Is the AI bubble going to pop hard soon? No. I think it's going to get way bigger. When it pops, it will still be bigger than February 2024. Right now, the companies making money are Microsoft, OpenAI, AI chip makers. Google might join soon if they get their act together. Apple as well. Basically, only existing large tech companies + OpenAI are making money so far. However, I expect newer AI-only startups, to start making money in the near future. For example, I can see a company like Devin AI get loads of revenue very quick such as when ChatGPT launched. As for open source AI companies like Stability, they're in trouble. Unfortunately, no one has figured out how to make money with open source AI. It used to be that you'd open source your tool, get adoption, then offer a cloud. With open source AI so far, this hasn't come true for whatever reason. Perhaps we're just early.

checker659 3y ago

Yeah. Looks like the gods demand one last AI winter.