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Goldman Sachs: AI Is overhyped, expensive, and unreliable
- gnabgib 2y agoDiscussions (88 points, 12 days ago, 157 comments) https://news.ycombinator.com/item?id=40837081 https://news.ycombinator.com/item?id=40837081 (89 points, 1 week ago, 47 comments) https://news.ycombinator.com/item?id=40885632 https://news.ycombinator.com/item?id=40885632
- unstatusthequo 2y agoAlso Goldman Sachs: uses quant algorithms for high speed trading at scale. What a joke.
- drewcoo 2y agoThere is no contradiction in that. I'd like to see the quants that are using ChatGPT for HFT. Apples and oranges.
- TeaBrain 2y agoThe existence of sophisticated algorithms does not necessarily imply the existence of machine learning/"AI". Despite Rentech executing all their trades via algorithmic models, Jim Simons once said that they didn't use any machine learning.
- johnthewise 2y agohttps://youtu.be/X72PZ_tQ4cA?si=Mj-w9iXFO4CCTCj0&t=78 https://youtu.be/X72PZ_tQ4cA?si=Mj-w9iXFO4CCTCj0&t=78 I think he says the opposite.
- TeaBrain 2y agoInteresting that he does say that in that somewhat recent interview. I forget where exactly I heard that he said that Rentech didn't use machine learning, but it may have been from an older interview.
- pie420 2y agoGoldman Sachs has no reason to disseminate valuable market insights and analysis for free. All financial thinkpieces by investment firms should be disregarded as economic manipulation and propaganda
- sojournerc 2y agoThey do have an interest in accurate pricing in markets (as does any investor). Sometimes something can be both true and have a portion of self-interest. An organization of that size might know something you don't. Do you have information they don't? Can you show that LLM tools are worthy of the hype (investment in particular), are consistent, and reliable? That's certainly not my experience. It's worth saying the emperor has no clothes, especially if we want to avoid the bubble pop, which admittedly GS has an interest in.
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- singleshot_ 2y agoIncomplete understanding of GS’s business and why someone might want to do business with them.
- ohxh 2y agoOr maybe they do believe this, and entered into trades to express this sentiment. Now, they need the market to correct to what (they believe) is accurate, so they can take profits and free up their capital again.
- bostonsre 2y agoThey don't have an incentive to share their view of reality until after they make investments that would capitalize on their belief in that view of reality. After they take those positions though, it is in their best interest to inform everyone about what they view to be real. It would seem to be risky for them to try to take positions based on some false narrative on some aspect of the market because if someone else finds and publishes the true narrative, and that becomes the prevailing sentiment, they would be harmed.
- ramon156 2y agoNews flash, stock related company says thing to influence market
- 93po 2y agonews flash, 155 year old company (that has never meaningfully innovated anything and is run by a 62 year old man with zero experience outside finance) is resistant and pessimistic about technology
- tedsanders 2y agoGoldman is correct that AI is expensive and unreliable. But it's only overhyped if AI stays that way. The hype isn't coming from where AI is today, but where it will be in 2030 and 2040. What excites the true believers is the slope, not the intercept.
- freejazz 2y agoNo, the hype is coming from where people are saying it will be in 2030 and 2040.
- swatcoder 2y agoThat's not a very interesting opportunity for insitutional investors (hedge funds, banks, pensions, etc). They have the resources and confidence to move fast and cleverly and don't need to make big bets on far off possibilities. They have better things to do with their money in the meantime. The nearly $1T in investment hype since Q42022 was chasing the possibility that revolutionary commercialization of generative AI might arrive any day. That no longer seems likely. As you note, there seem to be at least a few more profound discoveries that need to be made and matured, and so that revolution is still a long way out (from the perspective of these investors), even if it looks meaningfully more possible than it did two years ago.
- Davidzheng 2y agoWhat is far off for you? Is it five years?
- xk_id 2y ago“Over an arbitrarily long timeline, assuming stable geopolitical conditions, technology will continue to improve, at an arbitrary rate”. What a groundbreaking insight, no wonder people are excited.
- brigadier132 2y agoDid you even look at the Wright brothers plane? Why are people excited about it? It's an expensive deathtrap!
- rib3ye 2y agoActual report https://www.goldmansachs.com/intelligence/pages/gs-research/gen-ai-too-much-spend-too-little-benefit/report.pdf https://www.goldmansachs.com/intelligence/pages/gs-research/... Right in the preamble ..despite these concerns and constraints, we still see room for the AI theme to run, either because AI starts to deliver on its promise, or because bubbles take a long time to burst.
- knowaveragejoe 2y agoOverhyped? Sure. Expensive? Definitely. Unreliable? Sometimes. So many HNers love to be contrarian about anything resembling a hype train, and feel validated when a report like this comes out. I think the reality is that people moving forward with integrating AI into various aspects of their business and reaping the rewards aren't here making snarky "I told you so" comments, which seems to be every other comment on this and the other threads about the same article.
- monero-xmr 2y agoHN is overwhelmingly pro-AI and on the LLM hype train. Silicon Valley and YC are largely only investing in that sector right now. Pretending there is some huge contrarian group here is absurd
- knowaveragejoe 2y agoAre they? Virtually every comment on this thread, and the two others from the past week, have a pretty negative sentiment overall if not more or less saying "I told you so"
- rsynnott 2y agoI mean, I think people are getting a little tired of the hype; not sure how many true believers there are at this point.
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- EternalFury 2y agoIt’s healthy for GS to express a contrarian opinion. If GPT 5 doesn’t meet high expectations, another winter could soon arrive.
- duskwuff 2y agoIf the success of a single company -- indeed, a single product -- is really that pivotal, the industry is already on the brink of collapse.
- bigfishrunning 2y agoAnother winter is inevitable, but how soon will it come?
- Davidzheng 2y agoIt's not inevitable
- Jensson 2y agoAI is fundamental research, it is inevitable that funding for AI research will dry up at some point in the future just like all such research. AI winter doesn't mean AI isn't used, it refers to AI research funding shrinking back to the same level as other fundamental research fields.
- GaggiX 2y agoA winter where AI will continue to be used for semantic search, moderation, translation, captioning, TTS, STT, context-aware grammar checker, LLM, audio/image classifier. An AI winter where AI will be used everywhere.
- threetonesun 2y agoIt's a difference between big, interesting, investment worthy AI that stands alone and small, uninteresting, practical business features that happen to use AI. The real bellwether for me will be whether or not Apple, after releasing it's AI features, ever talks about them as a main point in a WWDC again, or if it just gets pushed into "here's something new photos can do (with AI)" like it has for the last x many years.
- crispyambulance 2y agoGoldman Sachs is overhyped, overpaid, and unreliable.
- DarkNova6 2y agoThose are not mutually exclusive.
- frithsun 2y agoAI is enabling a new generation of exploits and hacks that will force tech to get a lot simpler, more human readable, and more privacy oriented. Everything is going to need to be refactored for a world where bad actors have truly unlimited time and attention to invest in identifying privacy and security vulnerabilities.
- meiraleal 2y agoThat would be a great change.
- golemiprague 2y ago[dead]
- phendrenad2 2y agoThey're early to this opinion, people will start to realize this en masse soon. Digital coding assistants are here to stay, but not at the $10/month price point. Maybe $10/year.
- meiraleal 2y agoWhat's current AI platforms are missing is a friendly way to use their API individually. It should be easier for me to use my own ChatGPT or Claude account on another app/website. They could get a much bigger revenue with that too. But none of them are really willing to share the pie.
- shepherdjerred 2y agoI would easily pay $100/mo for copilot at its current level of function
- wkat4242 2y agoWow. I did not imagine I would ever agree with Goldman Sachs on anything in my life. Now, I do think it has its uses, but it's once again way overhyped like all the hypes that came before it. As always there is a certain use to it but it's way overblown.
- hypeatei 2y agoAnd we're adding browser APIs for it! What could go wrong?
- robotnikman 2y agoI think it's great in specific use cases, like the meeting discussion overview in teams. The problems come when you think you can build one AI that can do anything and everything, or tackle problems with a wide scope, or start using the AI as an infallible source of information. It seems like a lot of people were expecting the latter to be true.
- HenryBemis 2y agoWait until the moment that they can monetize it/save a bunch of money. Then see them dropping 5000-10000 employees globally because 'shareholders are pressing us to...' Some banks that develop their own applications will start using it heavily when they will realize that their in-house trading platform can execute orders 0.0001 seconds faster (or something insanely small). I strongly believe that the only thing that will hold AI/LLMs back is regulation, and nothing else.
- jojola 2y agoReally hard to disagree with Goldman Sachs on that one. There's no reason to believe in all this hype unless you are one of the many that are surfing, and making money, with it. Besides all those chatbots there is not a lot of AI products that are really useful to the everyday user.
- honeybadger1 2y agoHNers are wrong about this just like they're wrong about Tesla, and the proof is outside on the road.
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- OldSchool 2y agoI would have thought GS would be wise enough to not bully AI now in its early days just in case it ends up taking over the world.
- bastien2 2y agoJust remember: the only reason they threw a trillion dollars at genAI is because they thought they could lay off their entire creative staff
- ChrisArchitect 2y ago[dupe] More discussion: https://news.ycombinator.com/item?id=40837081 https://news.ycombinator.com/item?id=40837081 https://news.ycombinator.com/item?id=40856329 https://news.ycombinator.com/item?id=40856329
- gexla 2y agoI'm not going to read the whole paper, but I didn't find anything in the paper which used the words "overhyped" "wildly expensive," or "unreliable." Unreliable for what? There's so many different ways which people use these services. The way I use them, it's not unreliable. Because I don't use these services in a way which would be unreliable. Instead, it seems the broader conversation that the huge investment in AI might not pay off right away is very plausible. I pay $20 per month for one of these services. And that $20 service is maybe the most expensive to implement of anything I have paid $20 monthly by a long shot. And this is important for the audience of Goldman Sachs. Maybe it's not so important for the typical reader of Hacker News. Who reads Goldman Sachs papers?
- OutOfHere 2y agoWhy do people not understand that such news come out of the woodwork when they have a big short position in the stock market.
- tim333 2y agoIt doesn't sound like they are short saying bubbles may go on for a considerable time etc. Goldman etc make most of their money from fees from clients, not from punting the market.
- tim333 2y agoQuibbling a bit: >questions whether generative AI will ever become the transformative technology that Silicon Valley and large portions of the stock market are currently betting on... Who really cares if the AI is generative or not? AI is pretty much bound to be a transformative technology. >higher productivity (which necessarily means automation, layoffs, lower labor costs... Nah. It can also mean more stuff produced. And probably will. That said current asset prices may well be a bit inflated. And some startup could come up with a better algo for self improving AGI rendering the other companies not worth much. Bit like how Google came along and rendered the other search companies not worth much.
- djaouen 2y agoSay what you will about GS, they are correct here.
- AbstractH24 2y agoIt’s useful for turning unstructured data into structured data. And other similar repetitive tasks. Not chatting with and asking to write something open ended that even you don’t know how to do.
- amai 2y agoGoldman Sachs itself is overhyped, unreliable and expensive.
- dang 2y agoMaybe so, but please don't post unsubstantive comments to Hacker News.