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Ask HN: Are we at the start or the peak of a boom cycle in tech?

• zer00eyz 2y ago
  A lot of people got laid off. Companies are all looking to get to profitable or break even in the next 12 months. There isnt a lot of cash flowing around for business to borrow for survival or growth. Then there is the AI hype. You see someone like rabbit selling a lot and getting more money... and that's turning into another Jucero. And that makes OpenAI look a LOT like Theranos... all hype and no substance. I have a pretty solid argument that this is likely the case. Lets go back to GPT 3... Sam in front of congress, where all talking about the singularity. The deal with M$. That MS deal had ONE interesting bargain in it. They could have everything till OpenAI got to AGI. Thats a pretty drastic bet to make. And here we are, after board fiasco, where any one who might have said the word safety 12 months ago has quit. It's the google engineer who thought their efforts were AGI, it's the MS paper saying hints of AGI. I think everyone at open AI got high on their own supply. I think they had an idea that if they just fed it enough info, if they gave it EVERYTHING that some how real AGI, or sentience or sapience would emerge. Candidly from where they sat it probably looked pretty close, and it's hard not to have rose colored glasses. More so with Sam as the hype man on TV. The problem is that it completely ignores the history of every AI effort that has gone on since the 50's ... where they think they are close and then reality swiftly kicks the project in the balls. It's not like this very thing hasn't happened every time before. Us getting close to AGI is like fusion being 10 years or 25 years away, always... you wont ever get there if you keep covering half the distance to the goal. Meanwhile google, FB, M$ cut staff and bought hardware on this bet. The thing is no one has ANYTHING good to show for it. And for as much promise as it has, I haven't seen a "reduces hallucinations" paper, or one that has an inkling of how to make the systems more honest. My bet, that there are a bunch of engineers out there working on cool shit. They are bootstrapping because they dont need VC's any more. There isnt a massive investment upfront in "infrastructure" and most of them are skilled enough to tie scale to revenue and do it so there is margin. I suspect that you won't get another google or FB out of this one... you're going to get 1000 companies that do 5-10 million a year with sub 10 total staff.
  • AbstractH24 2y ago
    The difference between Theranos and OpenAI is the later has created a product which, while imperfect, does something. While conversational AI is nowhere near as good as people are made to think, there are two places where it has really shown itself to be good: 1. Writing the first draft of things. Be it code or a email. 2. Turning unstructured data into structured data By and large, those use cases aren’t very sexy, but the have the potential to accelerate the speed at which many things are done. And with less manpower. Talking this through with you, I’m starting to think that two things are going to happen: 1. A significant number of people who are or will be laid off in an effort to reach profitability are going to either found new companies or take senior roles on newly founded ones. 2. A mild recession will occur for some reason (be it layoffs, consumer debt, political unrest, a long tail event, etc). That’ll finally lead the fed to lower interest rates, which in turn starts the process of a true VC driven boom cycle. Reinforces my suspicion that we are very early on in a super-cycle.
    • talldayo 2y ago
      Well, I admire your optimism. Here's a short story about Datadog: Datadog sold what startups wanted. You want an observability platform, they would sell it to you piece-by-piece. This was great to the higher-ups; in an era when data science and dashboards were all the craze, every startup you went to had a monthly Datadog bill in the thousands. They were hooked. Then the economy went to shit, and you know what everyone realized? Datadog was useless. They were taking our money hand-over-fist to give us features that didn't matter and detracted from developer funding. When the higher-ups decided to stop trend-chasing, they made the call to drop Datadog and usually replace it with something else (some lumbering Prometheus stack). The moral of the story isn't that you can see a need and fill a need; the moral is that people will abandon half-measure solutions. OpenAI isn't filling a need, they aren't directly addressing a problem people have been demanding a solution for. They're selling a trend that you can join-in on for a per-call fee from their API. Much like Datadog, one day startups will start removing ChatGPT to replace it with local LLMs, and then probably remove LLMs altogether later down the line. Mark my words, the most successful businesses that come out of the next 10 years will barely even mention AI as a footnote in their product description.
• GianFabien 2y ago
  The AI I've tried can't unclog the toilet, get the lawn mower running or get me a beer. But it can pass the Bar exam. Great .....
  • fragmede 2y ago
    Unclog the toilet: https://chatgpt.com/share/07a1345a-8701-40e9-bb36-c087e28dd190 https://chatgpt.com/share/07a1345a-8701-40e9-bb36-c087e28dd1... Get the lawn mower running: https://chatgpt.com/share/1ec04770-dbe3-4904-96bd-e89cd65893f5 https://chatgpt.com/share/1ec04770-dbe3-4904-96bd-e89cd65893... Can't help with the beer though, try DoorDash.
    • tim333 2y ago
      Beer https://youtu.be/_jIlzhhesnY?t=553 https://youtu.be/_jIlzhhesnY?t=553
• nicbou 2y ago
  I work in immigration in Germany. I'm seeing a drop in traffic compared to previous years. People in the immigration industry are noticing a dip in business. My guide about losing your job in Germany is now in the top 10 by visits. Immigrants are the canary in the coal mine. When more people are unemployed, the local talent is already fighting for available jobs, so companies don't hire as much from abroad. This is based on relatively flimsy evidence, but it's how I currently see things.
  • muzani 2y ago
    Another canary is finance. Finance is like blood, it distributes resources from one place to another. You don't want it too fast or too slow. When finance starts to lay off lots of people people, it's because people are spending less. When people are spending less, it causes recessions. A very strong metric to watch is interest rates. Most recessions hit when interest rates are 0%. Rates are lowered to encourage growth, but when they're at 0%, the lever is stuck.
  • AbstractH24 2y ago
    Right, but haven’t we been saying some version of this for 3 years now? When the yield curve inverted. Starting to think there won’t be any big broad recession similar to 2007, but more of a rolling one bouncing from sector to sector. Which is kind of how it should be. In some ways I think tech is reaching the end of its recession. Where it goes next will be interesting.
    • nicbou 2y ago
      I don't know about people's predictions, but there is a visible shift in the job market.
      • AbstractH24 2y ago
        Not sure if you are suggesting a shift for better or worse and over what time frame. Despite my personal unemployment it seems things are better than they were in early 2022
• muzani 2y ago
  "VC winter" isn't what it seems. The money is going into something else. VCs reduced late stage funding, which was killing unicorns, but they increased early stage funding. For a while, angels stopped investing in early stage to put it into crypto/NFT. Covid had people pulling their money out of travel tech and putting it into gold. Lately there was speculation that bitcoin halving would increase prices again, and so the prices went up long before the halving. People say there's more AI investment, but AI has always been heavily overinvested since 2015. Even back then, fresh PhDs could expect million dollar annual TC. People who believed AI would eat the world have been buying Google, Meta, Tesla stocks for years because those were the closest. Those stocks aren't rising much. Only recently did retail investors realize that maybe NVIDIA would be profiting from the AI boom as well. You have to take into account all the delays. Meta didn't drop in stock because they were planning for the Metaverse, it dropped because they admitted that Facebook was no longer their core business. Everyone knew FB was dead for a while, the name change was a catalyst. The metaverse isn't terrible business though - Roblox is bigger than many banks.
  • qeternity 2y ago
    > The metaverse isn't terrible business though - Roblox is bigger than many banks. There is really nothing to validate this statement. Roblox is a $20B company. Facebook is 60x bigger. Shareholders did not believe that the metaverse was a large enough opportunity for Facebook to go "all in" on.
    • muzani 2y ago
      I'm not sure why this is downvoted. I do agree with some points there. Metaverse is probably not big enough for Meta. Roblox is IMO the #1 in metaverse, though they're mostly targeting kids. Minecraft was worth billions too and it's a very, very small subset of the market. But is the metaverse worth over a trillion dollars? If it's not, then what's to say social media is?
  • alexander2002 2y ago
    Robolox is actually enjoyable for kids i have seen my cousin play it ! I think affordability and familiarity goes a long way
• Spooky23 2y ago
  The most obvious sign is that many of the big money techbro guys are leaning into politics and the resulting graft and spoils instead of building things. Crypto really poisoned the well, IMHO, bringing outright scams front and center. The dotcom bullshit from 30 years ago were mostly decent ideas executed too early. Speculation on electronic baseball cards depicting cartoon monkeys was always madness.
• randomgiy3142 2y ago
  Here’s what happened. I’m not in the VC world but work closely advising big companies, there’s a lot of cross over between a Honeywell and a VC. I’m a traditional hardcore engineer so I’ve seen it from systems level (kernel, fs) to web, AI, etc. so I’ve seen it all but luckily more as a consultant/architect who could you know code. Cloud computing became big but was expensive. It had obvious benefits but for ignorance or timing people went from in house server racks to same thing on clouds. This id important upgrades are expensive for mission critical software. A lot of initiatives aka budgets paid developers to implement things that weren’t related to do that. SaaS came along. Now you didn’t have upgrades but you still needed to adjust the software. That’s mainly config based and junior or offshore labor can do that. AI appeared and people thought this awesome. They didn’t realize people were smashing into got until something built. Also the mindsets of companies didn’t change. They only hired SWEs to maintain Oracle, not improve business. They saw what ChatGPT could do by asking it questions and thought oh I didn’t know computers could do that. When generating code has been done forever it’s not that’s hard it’s knowing what needs to be solved. So you have older execs thinking AI will need a bunch of cheap labor creating software not realizing we’ve already made software creation almost stupid easy with HLL. A lot of good ideas don’t come from SV stereotypes but there’s a lot to be said who open source or otherwise contribute now not having SWSlE jobs. Anyway every company stole the NLP/LLM/Rag model out of in chat bots got better results no need for ui budget (looking at you salesforce). Some tasks like call centers were pretty much also made for LLM. Other AI advances like sorting packages and treading the line between algorithm and AI do well. More importantly big companies are making tons of money and there’s not been appreciable advances in technology. LLMs will be local and integrated it won’t be called AI. Workflows will improve etc. right now it comes from big tech with cash on hand it looks like big iron from the 80s. The internet didn’t see anyone control it and was relatively cheap to get into. Create a 3d image scanner that can process millions of say walnuts on an assembly line as good or bad isn’t sexy and niche… and expensive. So we are in a lull companies are bringing dev in house and aren’t being experimental. Unless you have one of 7 big tech firms behind you won’t get looked at. So right now it is get to the state in b2b to just get bought. Also b2c is controlled underneath by AWS or a big cloud provider. Good thing companies are realizing they don’t need Google levels of high reliability. I see a real progression back to on prem with slimmed down K8S variants with Chromebook like devices. Google spent a lot making those “just work” as anyone installing even Ubuntu can tell you. But we are basically at the point someone will create a business like Steak deck with hardware compliance. Servers where apps can be deployed like VDIs and a resurgence away back to guy in his garage software development. It’ll still need VC funding but with secure infra you can have on prem SaaS catering to the mid market.
• djyaz1200 2y ago
  We're in the Alta Vista / Ask Jeeves stage of the next boom cycle. Everyone sees an opportunity, and lots of smart people are chasing it. Who will win is unknown.
  • AbstractH24 2y ago
    Great analogy Based on your references, I assume you were around for that cycle -- in hindsight, what did/should you have done during that stage of the boom cycle to prepare yourself to thrive during the inevitable bust? There are obvious answers like "live within your means, save money, and invest conservatively." But curious about deeper ones. Particularly when it comes to career trajectory.
    • djyaz1200 2y ago
      I think the key is to figure out who is going to win and work for them, invest in them, or at least stay out of their way. I know easier said than done. LLM capability scales with money, so deep pockets will win, that simplifies things a great deal. Microsoft looks like a better place to work these days strategically. They were an early Facebook investor and, as evidenced by the Sam Altman incident, essentially own OpenAI. They have now shown a pattern of being early to see disruption and get their money and influence in. They are diversified and don't make big money on search, which seems like the obvious area of disruption for AI. I think the rise of LLM helps them more than any other company, but we'll see?