5 ms·

Big Tech says AI is booming. Wall Street is starting to see a bubble

79 points by jameslk 2y ago

brigadier132 2y ago
AI's current trajectory is actually the best one for workers where it increases worker productivity but does not replace them which will increase demand.
- grugagag 2y ago
  Can you expand on that? I can’t see how productivity will not replace (at least some) them in the long run and shift the workload on the remaining ones, basically making fewer people handle a larger workload for a bit more pay or same pay? And that has more or less been the case with tech so far, though at a slower pace it seems. Or are you saying that AI will create a lot of demand for workforce? And how so?
  - dilawar 2y ago
    There is an infinite amount of work in the future. Some jobs may become redundant because of AI but I don't see anyone becoming less busier.
  - asolove 2y ago
    The amount of work to be done isn’t constant. If you make it cheaper to do a unit of work (less labor per unit) then the market will demand more of it. Look up the unintentional impact of the cotton gin for an example.
  - m_ke 2y ago
    We’ll just have more stuff. Product backlogs for most companies have no end so a worker going from creating 2 widgets to 10 widgets a month means they’re creating more bang for the buck. It will only hurt industries with limited demand or fixed amount of work (think bookkeepers, customer support) that are cost centers.
- kkfx 2y ago
  Hum... So far I still have to see "improved productivity", at maximum some low skilled workers can find ways to complete some simple tasks quickly in certain domain, but that's essentially all. IF an LLM could ingest news and summarize headlines every day some jobs might gain help, but so far next to nothing is there. Some have tried for stocks and does not went anywhere, some others have tried to replace call center operators with horrific mean results and so on. Actually I fail to see much else except producing quick graphics for publishers and porn deepfakes for teenagers. At a certain point in time things might mature enough for something else, but so far...
  - vladms 2y ago
    I am always amazed when interacting with some people how much it "helps" them to ask a (couple of) questions to LLM rather than (just) using google. I (am many IT friends) never need that. But there are many "low skilled workers" (and that can include people not being able to use technology) for which an LLM will improve their productivity. To the point I think I am the exception, and that's why LLM will have a larger impact than I would estimate.
    - aganbb 2y ago
      It does not help me either. C++ answers are flat out wrong and you develop bad habits. If I wanted to plagiarize and had no morals, I could take code from GitHub directly. And, as you say, Google provides links to better answers in 2 seconds. I suppose some people like the interaction with the machine. I'm much more exhausted after an LLM session and my brain is literally fried until the next morning. I stopped using LLMs and am much happier. Googling for answers and reading them strangely enough energizes me.
    - kkfx 2y ago
      As we have witnessed episodes like https://arstechnica.com/?p=1942936 https://arstechnica.com/?p=1942936 witch pose a big and so far unsolvable problem. Personally I tried khoj on my org-mode notes just for curiosity, it was able to produce some meaningful results, but fails to find much while a mere rg (ripgrep) succeed without special tricks. Similarly a classic Google Search tend to produce meaningful results quickly and with much less computation needed than ChatGPT. If that's the current bar well, LLMs cost way too much for the results they produce. Of course things change so at a certain point in future we might get much better results and to achieve such goals research, so data, experiments etc is needed but from research and release early and often vs "Artificial Intelligence is here" from PR there is a big gap in the middle.
- teamspirit 2y ago
  Problem is, with every advance in worker productivity, workers either work the same or more. They may become more efficient, but the real benefit hardly goes to the worker - it goes to the organization. Whether that’s good, bad, or somewhere in between is another conversation and highly dependent on where you measure success in increased productivity.
  - vladms 2y ago
    Reference? This tells a quite different story: https://ourworldindata.org/working-hours https://ourworldindata.org/working-hours And talking about benefits, would you claim that life 50 years ago was the same for the average citizen as today? Because if not, to me it seems that people work less (see chart) for more (see what you have).
    - somenameforme 2y ago
      The labor market was way different 50 years ago (and especially even a little bit further back), because you generally had one bread winner working e.g. 1930 hours to support an entire family. In 1960 only 7% of households were single person, now it's 38% [1]. So now you have people working 1760 hours to support, in many cases, only themselves. This [2] site has a plethora of data about the inflection of basically everything that happened in 1971. 1971 was when the US defaulted on its agreements under Bretton Woods, enabling it to begin printing money at its own discretion, which is essentially when our current economic era began. Vast amounts of wealth has been generated, but it has come with costs. [1] - https://www.statista.com/statistics/242022/number-of-single-person-households-in-the-us/ https://www.statista.com/statistics/242022/number-of-single-... [2] - https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/
- prerok 2y ago
  It increases short term productivity, yes, long term, not so much. What I started to notice, and I think some people on HN have noticed already before me, is that producing lines of code is faster. Much faster, even, if examples are already in the knowledge base. This means that "rolling your own" has never been easier. So, we end up with the same solution, replicated many times in the code. So, now, programmers are producing code faster than reviewers can review. Even the authors of this GPT assisted pile of code may not read or even fully understand it. I think the critical thing missing is code duplication detection. I know some tools are available but I have yet to see one that does its job satisfactorilly. If, however, that does not get built in soon, then companies will start to see that AI causes people to produce lots of unmaintainable/duplicated content and will start to turn away.
  - pants2 2y ago
    NOT rolling your own has also never been easier. I've had Sonnet recommend great libraries and tools to me that I probably wouldn't have discovered on my own, and the plus side is I don't need to spend as much time learning those libraries because I can pass in the documentation and have it interface my code with it.
skilled 2y ago
https://archive.is/Pshsp https://archive.is/Pshsp
mocha_nate 2y ago
At my job it’s assisting new out-of-the box tools that require configuration. Good example of productivity increase and not replacing work, but instead creating new work.
pbw 2y ago
Bubbles are inevitable. Imagine a single company investing precisely the right amount into a new technology, not a penny more. Now imagine every single company and person doing the same thing, perfectly. It’s impossible. The stock market has boom and bust cycles even with companies using 100 year old technologies! With an embryonic but all-promising technology like AI: it will pop then reinflate many times over. And this is fine.
- njtransit 2y ago
  A bubble is when expectations are severely detached from reality. Simple over-investing is not a bubble.
  - aurareturn 2y ago
    So do you think AI expectations are currently detached from reality? Can you quantify it?
    - deleted 2y ago
      [deleted]
    - thunky 2y ago
      > Can you quantify it? It's on the person saying it's a bubble to quantify it.
- ghaff 2y ago
  And you have to. Sometimes (most of the time) you bet wrong or just don't win on some new technology you think is important. But, while fast followers can sometimes get there, you mostly have to place a meaningful bet even if the outcome is hardly pre-ordained.
- tracerbulletx 2y ago
  The analogy I like best is that the economy functions like a slime mold. When it senses a chemical gradient that indicates food in some direction it grows out in a very wide search pattern, expanding a lot of resources to move that way. When it finds the actual food, most of the growth withers away and you're left with just a path to the food.
aurareturn 2y ago
I don’t think it’s a bubble yet. I think it’s very real and very early. Yes, most AI startups will fail and have little to no revenue just like how most software startups were prior to the AI boom. That hasn’t changed. But we are so early in the LLM era. Hell, Slack hasn’t even added an LLM for chat histories, which is something I desperately want. AI agents are just starting. Scaling law hasn’t stopped. There are a ton of use cases where I think LLMs are extremely helpful but we are bottlenecked by inference speeds and context size. Both of which are rapidly improving. There will come a break point where models are cheap, capable, and fast. We are not there yet. It’s really freaking early. Expecting AI companies to generate massive amounts of revenue now is silly. Most of them will fail. But some of them will be absolutely gigantic.
- freeone3000 2y ago
  But is this pattern of small, cheap, and fast models profitable for the companies making them? Open-source models capable enough to solve user needs and small enough to run on-device: they’re great for users, but it means there’s no one company to take profit. Everybody and every product becomes more valuable and more capable, which is hard to extract differential profit from.
  - aurareturn 2y ago
    Yes I do. I expect chip makers such as TSMC and Nvidia to massively profit from them because people will need a lot more chips now and in the future. I expect companies who integrate well with them to increase their value. For example, companies with proprietary data to integrate an LLM with. Another example could be a company that develops very capable agents. Wallstreet cares about stocks. If models reach a point where it’s cheap, capable, and fast, why wouldn’t the S&P500 take off because of the huge boost to productivity? And some companies will take off more. That’s normal.
    - photonbeam 2y ago
      It may be a ‘sell shovels’ time, where the hardware providers profit
sackfield 2y ago
I would hazard a guess that AI technology is already close to break even from an economic perspective, nearly everyone I know (especially those not in tech) uses it on a daily basis to assist with their work, especially coming in the form of dealing with pointless bureaucracy, writing emails and ideation. From a cashflow perspective however it is no where near close to capturing its economic benefit, and to be fair to the bubble supporters I agree that I can't see how it can capture this in the short term. In the long term its pretty clear that there will be some major winners here who will reap big rewards.
- paxys 2y ago
  Everyone is relying on the costs of computation to come down by an order of magnitude. Whether that will actually happen – let's see.
  - aurareturn 2y ago
    It has already come down by magnitudes. Just check API costs for the same level of intelligence of models over the last 1.5 years.
karaterobot 2y ago
I strongly suspect we're in an AI bubble, but that doesn't mean AI is without value. It's just that investors and entrepreneurs and CEOs get the zoomies about stuff like this. They go all in because they're scared someone is going to get ahead of them, or that they'll leave money on the table, and this often leads to a feedback loop as everyone tries to be more hyped than the last guy. But, obviously GenAI has already created a lot of value, and will create more. It's cool. I hesitate to make comparisons, but I think of it like VR. For a hot minute, VR was supposed to be the future. We were all going to live our lives in VR. Zuckerberg goes all in. Turns out that's not happening anytime soon, but does that mean VR is a sham? No, it's actually really cool, and it'll keep getting better, but that doesn't mean we're going to spend 8-16 hours a day with a helmet on. That was just a bad prediction, and doesn't reflect on the technology or its value. Same with AI.
figassis 2y ago
What is concerning is it seemed like money had dried up, people were laid off. But at the same time, there seems to be so much cash available for AI. If this is a bubble,it will be interesting to see CEOs come back again, in tune, and say "I'm truly sorry I have to lay 30% of you off, layoffs are never easy, this is on me, we could not have foreseen this...best of luck".
bustling-noose 2y ago
AI blockchain 5G IoT ML self driving are a few trends I’ve seen in the last 10-15 years or so. I was too young to witness things like dotcom bubble but the theme remains the same. Everytime something becomes popular there is always the ‘you got a hammer so now everything is a nail’ problem. Eventually the trend filters out the non sense applications and only the really important and impactful applications stick around. Humans never change. Neither in stock markets nor otherwise. Everyone falls for the same things again and again.
JCM9 2y ago
The tech is super interesting and useful, but it’s also becoming very commoditized. Those selling compute win but most of these AI startups don’t have a viable business plan. I wouldn’t call the tech “a bubble” but the hype around AI startups and their valuation? Massive bubble ready to pop hard.
- aurareturn 2y ago
  In the beginning, there were many search engines. Then there was Google. Would you say that in 1999 that search engines are easily commoditized and have no money in them?
kaycebasques 2y ago
> “There was a dot-com bubble, according to Goldman Sachs, because prices went up and prices went down. According to me, internet traffic didn’t go down at all.” An idea from macro investing [1] that has stuck with me: don't overindex on the last crisis (or watershed moment more generally). All throughout the 2010s a lot of investors were implicitly assuming that if another crisis hit, it would look like 2008. The 2020 crisis proved to unfold in a very different ways than 2008, at least in terms of where you were best off putting your money. Which brings me back to the Khosla quote from the start of this comment. A lot of people seem to be overindexing on the dot-com boom, assuming that this AI summer will pan out the same way. I am not making a directional call here. All I'm suggesting is to stay humble about this trite yet profound truth: the future often unfolds in unexpected ways. [1] Shout out to The Macro Tourist
Animats 2y ago
Kosla: "The rush into AI might cause a financial bubble where investors lose money, but that doesn’t mean the underlying technology won’t continue to grow and become more important. There was a dot-com bubble, according to Goldman Sachs, because prices went up and prices went down. According to me, internet traffic didn’t go down at all.” That's a good way to look at it. Many of the companies throwing money at AI are going to lose money. For two reasons: 1) it doesn't work well enough yet, and 2) it's getting cheaper, so more people can do it. Most infrastructure stuff ends up as a low-margin business. Look at AI-guided autonomous vehicles. First demo, 1980s. First major successes, around 2005. First successful commercial use, around 2023. Profitability, ?. Probably half a century from demo to profitability.
- pants2 2y ago
  One interesting thing about autonomous vehicles is that companies that have spent billions of dollars and decades in R&D (e.g. Tesla) are only slightly ahead of competitors. Now it's seeming like multimodal LLMs will be the way forward with self-driving vehicles, and if I just fine-tune Phi 3 I can do better than state of the art DL models from a couple years ago. Looking at the bigger picture, then, it seems like most of the efforts that companies are pouring into AI research generally won't put them that far ahead.
  - Animats 2y ago
    Waymo is way ahead of competitors. They have a working autonomous taxi system deployed. The driving assistance systems are way behind that. Consumer Reports says the current best system is Ford's Blue Cruise, which is the only one on the market where you can take your hands off the wheel for long periods. Does Phi 3 even do vision?
  - tsimionescu 2y ago
    Isn't Tesla the bottom of the pack on self-driving?
    - defrost 2y ago
      World leader on finger slicing and patina though.
idontknowtech 2y ago
It's definitely a bubble. Sam Altman wants to build $7tn worth of data centers; if that's not an indication of how ridiculous this has gotten, I don't know what is. LLM has been vastly oversold to the general public as "AI" when the technology is nowhere near that. We haven't invented turing complete robots that independently identify problems, learn the solutions, and respond. LLM as a technology might not ever be able to do that, by the nature of how it works. We have only created chatbots that reply to prompts, with a higher than acceptable inaccuracy rate. And yet this justifies $7tn. But silicon valley figured out that saying "AIAI" on repeat works for funding, then other companies started pretending they were the same for the instant stock gain. Rising interest rates and this wave led everyone to pull out of other companies and dump into anything vaguely related to AI. They rode the price up, and now that interest rates are falling (making other companies more attractive) they are rotating out. This probably didn't become a full on bubble like crypto did because interest rates were high. It's still a bubble, but seems to be pricking of its own accord as opposed to becoming a gigantic, systemic problem. That said, when rates fall again, we might see a second boom there. Or maybe another fad will strike silicon valley, to continue the trend. VR - Crypto - Metaverse - LLM?
- randcraw 2y ago
  Part of the problem in AI is the lack of useful benchmarks that show progress is being made in skill areas where AI will truly be useful and transformational. I mean, who cares if a LLM can pass a bar exam or real estate license test?
  - tivert 2y ago
    > Part of the problem in AI is the lack of useful benchmarks that show progress is being made in skill areas where AI will truly be useful and transformational. There also needs to be discussion if the transformations AI can make possible are actually for the common good. They'll certainly be good for a small minority (e.g. certain billionaires), but its hype-men seem to be lazily gesturing to utopian sci-fi and lazy and oversimple economic thinking to justify it [1]. But it's probably hopeless, since SV is a technopoly and has too much influence. [1] Like assuming there will always be work for all people in the face of automation, that people will be better off if goods get cheaper as their economic prospects dim, etc.
WhyNotHugo 2y ago
https://archive.ph/Pshsp https://archive.ph/Pshsp
1vuio0pswjnm7 2y ago
Works where archive.ph is blocked: https://www.msn.com/en-us/money/markets/big-tech-says-ai-is-booming-wall-street-is-starting-to-see-a-bubble/ar-BB1qxJH0 https://www.msn.com/en-us/money/markets/big-tech-says-ai-is-... Text-only: https://assets.msn.com/content/view/v2/Detail/en-in/BB1qxJH0 https://assets.msn.com/content/view/v2/Detail/en-in/BB1qxJH0
Dig1t 2y ago
It probably is a bubble in the same way the Internet created a bubble in the 90’s. A lot of hype based on the promise of the technology, and when it didn’t expand and pay out quickly enough the bubble “burst”. But over the following few decades the technology did end up living up to the hype, and then some. It’ll be the same with AI, probably the productivity gains won’t return quickly enough for the current rounds of investment, but on a long enough time line it will absolutely be well-placed hype.
vrighter 2y ago
They keep building the same thing, but bigger. It keeps exhibiting the exact same issues. It is a bubble because it is very clear that the tech is hitting a dead end.

79 points by jameslk 2y ago

AI's current trajectory is actually the best one for workers where it increases worker productivity but does not replace them which will increase demand.

grugagag 2y ago
Can you expand on that? I can’t see how productivity will not replace (at least some) them in the long run and shift the workload on the remaining ones, basically making fewer people handle a larger workload for a bit more pay or same pay? And that has more or less been the case with tech so far, though at a slower pace it seems. Or are you saying that AI will create a lot of demand for workforce? And how so?
- dilawar 2y ago
  There is an infinite amount of work in the future. Some jobs may become redundant because of AI but I don't see anyone becoming less busier.
- asolove 2y ago
  The amount of work to be done isn’t constant. If you make it cheaper to do a unit of work (less labor per unit) then the market will demand more of it. Look up the unintentional impact of the cotton gin for an example.
- m_ke 2y ago
  We’ll just have more stuff. Product backlogs for most companies have no end so a worker going from creating 2 widgets to 10 widgets a month means they’re creating more bang for the buck. It will only hurt industries with limited demand or fixed amount of work (think bookkeepers, customer support) that are cost centers.
kkfx 2y ago
Hum... So far I still have to see "improved productivity", at maximum some low skilled workers can find ways to complete some simple tasks quickly in certain domain, but that's essentially all. IF an LLM could ingest news and summarize headlines every day some jobs might gain help, but so far next to nothing is there. Some have tried for stocks and does not went anywhere, some others have tried to replace call center operators with horrific mean results and so on. Actually I fail to see much else except producing quick graphics for publishers and porn deepfakes for teenagers. At a certain point in time things might mature enough for something else, but so far...
- vladms 2y ago
  I am always amazed when interacting with some people how much it "helps" them to ask a (couple of) questions to LLM rather than (just) using google. I (am many IT friends) never need that. But there are many "low skilled workers" (and that can include people not being able to use technology) for which an LLM will improve their productivity. To the point I think I am the exception, and that's why LLM will have a larger impact than I would estimate.
  - aganbb 2y ago
    It does not help me either. C++ answers are flat out wrong and you develop bad habits. If I wanted to plagiarize and had no morals, I could take code from GitHub directly. And, as you say, Google provides links to better answers in 2 seconds. I suppose some people like the interaction with the machine. I'm much more exhausted after an LLM session and my brain is literally fried until the next morning. I stopped using LLMs and am much happier. Googling for answers and reading them strangely enough energizes me.
  - kkfx 2y ago
    As we have witnessed episodes like https://arstechnica.com/?p=1942936 https://arstechnica.com/?p=1942936 witch pose a big and so far unsolvable problem. Personally I tried khoj on my org-mode notes just for curiosity, it was able to produce some meaningful results, but fails to find much while a mere rg (ripgrep) succeed without special tricks. Similarly a classic Google Search tend to produce meaningful results quickly and with much less computation needed than ChatGPT. If that's the current bar well, LLMs cost way too much for the results they produce. Of course things change so at a certain point in future we might get much better results and to achieve such goals research, so data, experiments etc is needed but from research and release early and often vs "Artificial Intelligence is here" from PR there is a big gap in the middle.
teamspirit 2y ago
Problem is, with every advance in worker productivity, workers either work the same or more. They may become more efficient, but the real benefit hardly goes to the worker - it goes to the organization. Whether that’s good, bad, or somewhere in between is another conversation and highly dependent on where you measure success in increased productivity.
- vladms 2y ago
  Reference? This tells a quite different story: https://ourworldindata.org/working-hours https://ourworldindata.org/working-hours And talking about benefits, would you claim that life 50 years ago was the same for the average citizen as today? Because if not, to me it seems that people work less (see chart) for more (see what you have).
  - somenameforme 2y ago
    The labor market was way different 50 years ago (and especially even a little bit further back), because you generally had one bread winner working e.g. 1930 hours to support an entire family. In 1960 only 7% of households were single person, now it's 38% [1]. So now you have people working 1760 hours to support, in many cases, only themselves. This [2] site has a plethora of data about the inflection of basically everything that happened in 1971. 1971 was when the US defaulted on its agreements under Bretton Woods, enabling it to begin printing money at its own discretion, which is essentially when our current economic era began. Vast amounts of wealth has been generated, but it has come with costs. [1] - https://www.statista.com/statistics/242022/number-of-single-person-households-in-the-us/ https://www.statista.com/statistics/242022/number-of-single-... [2] - https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/
prerok 2y ago
It increases short term productivity, yes, long term, not so much. What I started to notice, and I think some people on HN have noticed already before me, is that producing lines of code is faster. Much faster, even, if examples are already in the knowledge base. This means that "rolling your own" has never been easier. So, we end up with the same solution, replicated many times in the code. So, now, programmers are producing code faster than reviewers can review. Even the authors of this GPT assisted pile of code may not read or even fully understand it. I think the critical thing missing is code duplication detection. I know some tools are available but I have yet to see one that does its job satisfactorilly. If, however, that does not get built in soon, then companies will start to see that AI causes people to produce lots of unmaintainable/duplicated content and will start to turn away.
- pants2 2y ago
  NOT rolling your own has also never been easier. I've had Sonnet recommend great libraries and tools to me that I probably wouldn't have discovered on my own, and the plus side is I don't need to spend as much time learning those libraries because I can pass in the documentation and have it interface my code with it.

skilled 2y ago

https://archive.is/Pshsp https://archive.is/Pshsp

mocha_nate 2y ago

At my job it’s assisting new out-of-the box tools that require configuration. Good example of productivity increase and not replacing work, but instead creating new work.

pbw 2y ago

Bubbles are inevitable. Imagine a single company investing precisely the right amount into a new technology, not a penny more. Now imagine every single company and person doing the same thing, perfectly. It’s impossible. The stock market has boom and bust cycles even with companies using 100 year old technologies! With an embryonic but all-promising technology like AI: it will pop then reinflate many times over. And this is fine.

njtransit 2y ago
A bubble is when expectations are severely detached from reality. Simple over-investing is not a bubble.
- aurareturn 2y ago
  So do you think AI expectations are currently detached from reality? Can you quantify it?
  - deleted 2y ago
    [deleted]
  - thunky 2y ago
    > Can you quantify it? It's on the person saying it's a bubble to quantify it.
ghaff 2y ago
And you have to. Sometimes (most of the time) you bet wrong or just don't win on some new technology you think is important. But, while fast followers can sometimes get there, you mostly have to place a meaningful bet even if the outcome is hardly pre-ordained.
tracerbulletx 2y ago
The analogy I like best is that the economy functions like a slime mold. When it senses a chemical gradient that indicates food in some direction it grows out in a very wide search pattern, expanding a lot of resources to move that way. When it finds the actual food, most of the growth withers away and you're left with just a path to the food.

aurareturn 2y ago

I don’t think it’s a bubble yet. I think it’s very real and very early. Yes, most AI startups will fail and have little to no revenue just like how most software startups were prior to the AI boom. That hasn’t changed. But we are so early in the LLM era. Hell, Slack hasn’t even added an LLM for chat histories, which is something I desperately want. AI agents are just starting. Scaling law hasn’t stopped. There are a ton of use cases where I think LLMs are extremely helpful but we are bottlenecked by inference speeds and context size. Both of which are rapidly improving. There will come a break point where models are cheap, capable, and fast. We are not there yet. It’s really freaking early. Expecting AI companies to generate massive amounts of revenue now is silly. Most of them will fail. But some of them will be absolutely gigantic.

freeone3000 2y ago
But is this pattern of small, cheap, and fast models profitable for the companies making them? Open-source models capable enough to solve user needs and small enough to run on-device: they’re great for users, but it means there’s no one company to take profit. Everybody and every product becomes more valuable and more capable, which is hard to extract differential profit from.
- aurareturn 2y ago
  Yes I do. I expect chip makers such as TSMC and Nvidia to massively profit from them because people will need a lot more chips now and in the future. I expect companies who integrate well with them to increase their value. For example, companies with proprietary data to integrate an LLM with. Another example could be a company that develops very capable agents. Wallstreet cares about stocks. If models reach a point where it’s cheap, capable, and fast, why wouldn’t the S&P500 take off because of the huge boost to productivity? And some companies will take off more. That’s normal.
  - photonbeam 2y ago
    It may be a ‘sell shovels’ time, where the hardware providers profit

sackfield 2y ago

I would hazard a guess that AI technology is already close to break even from an economic perspective, nearly everyone I know (especially those not in tech) uses it on a daily basis to assist with their work, especially coming in the form of dealing with pointless bureaucracy, writing emails and ideation. From a cashflow perspective however it is no where near close to capturing its economic benefit, and to be fair to the bubble supporters I agree that I can't see how it can capture this in the short term. In the long term its pretty clear that there will be some major winners here who will reap big rewards.

paxys 2y ago
Everyone is relying on the costs of computation to come down by an order of magnitude. Whether that will actually happen – let's see.
- aurareturn 2y ago
  It has already come down by magnitudes. Just check API costs for the same level of intelligence of models over the last 1.5 years.

karaterobot 2y ago

I strongly suspect we're in an AI bubble, but that doesn't mean AI is without value. It's just that investors and entrepreneurs and CEOs get the zoomies about stuff like this. They go all in because they're scared someone is going to get ahead of them, or that they'll leave money on the table, and this often leads to a feedback loop as everyone tries to be more hyped than the last guy. But, obviously GenAI has already created a lot of value, and will create more. It's cool. I hesitate to make comparisons, but I think of it like VR. For a hot minute, VR was supposed to be the future. We were all going to live our lives in VR. Zuckerberg goes all in. Turns out that's not happening anytime soon, but does that mean VR is a sham? No, it's actually really cool, and it'll keep getting better, but that doesn't mean we're going to spend 8-16 hours a day with a helmet on. That was just a bad prediction, and doesn't reflect on the technology or its value. Same with AI.

figassis 2y ago

What is concerning is it seemed like money had dried up, people were laid off. But at the same time, there seems to be so much cash available for AI. If this is a bubble,it will be interesting to see CEOs come back again, in tune, and say "I'm truly sorry I have to lay 30% of you off, layoffs are never easy, this is on me, we could not have foreseen this...best of luck".

bustling-noose 2y ago

AI blockchain 5G IoT ML self driving are a few trends I’ve seen in the last 10-15 years or so. I was too young to witness things like dotcom bubble but the theme remains the same. Everytime something becomes popular there is always the ‘you got a hammer so now everything is a nail’ problem. Eventually the trend filters out the non sense applications and only the really important and impactful applications stick around. Humans never change. Neither in stock markets nor otherwise. Everyone falls for the same things again and again.

JCM9 2y ago

The tech is super interesting and useful, but it’s also becoming very commoditized. Those selling compute win but most of these AI startups don’t have a viable business plan. I wouldn’t call the tech “a bubble” but the hype around AI startups and their valuation? Massive bubble ready to pop hard.

aurareturn 2y ago
In the beginning, there were many search engines. Then there was Google. Would you say that in 1999 that search engines are easily commoditized and have no money in them?

kaycebasques 2y ago

> “There was a dot-com bubble, according to Goldman Sachs, because prices went up and prices went down. According to me, internet traffic didn’t go down at all.” An idea from macro investing [1] that has stuck with me: don't overindex on the last crisis (or watershed moment more generally). All throughout the 2010s a lot of investors were implicitly assuming that if another crisis hit, it would look like 2008. The 2020 crisis proved to unfold in a very different ways than 2008, at least in terms of where you were best off putting your money. Which brings me back to the Khosla quote from the start of this comment. A lot of people seem to be overindexing on the dot-com boom, assuming that this AI summer will pan out the same way. I am not making a directional call here. All I'm suggesting is to stay humble about this trite yet profound truth: the future often unfolds in unexpected ways. [1] Shout out to The Macro Tourist

Animats 2y ago

Kosla: "The rush into AI might cause a financial bubble where investors lose money, but that doesn’t mean the underlying technology won’t continue to grow and become more important. There was a dot-com bubble, according to Goldman Sachs, because prices went up and prices went down. According to me, internet traffic didn’t go down at all.” That's a good way to look at it. Many of the companies throwing money at AI are going to lose money. For two reasons: 1) it doesn't work well enough yet, and 2) it's getting cheaper, so more people can do it. Most infrastructure stuff ends up as a low-margin business. Look at AI-guided autonomous vehicles. First demo, 1980s. First major successes, around 2005. First successful commercial use, around 2023. Profitability, ?. Probably half a century from demo to profitability.

pants2 2y ago
One interesting thing about autonomous vehicles is that companies that have spent billions of dollars and decades in R&D (e.g. Tesla) are only slightly ahead of competitors. Now it's seeming like multimodal LLMs will be the way forward with self-driving vehicles, and if I just fine-tune Phi 3 I can do better than state of the art DL models from a couple years ago. Looking at the bigger picture, then, it seems like most of the efforts that companies are pouring into AI research generally won't put them that far ahead.
- Animats 2y ago
  Waymo is way ahead of competitors. They have a working autonomous taxi system deployed. The driving assistance systems are way behind that. Consumer Reports says the current best system is Ford's Blue Cruise, which is the only one on the market where you can take your hands off the wheel for long periods. Does Phi 3 even do vision?
- tsimionescu 2y ago
  Isn't Tesla the bottom of the pack on self-driving?
  - defrost 2y ago
    World leader on finger slicing and patina though.

idontknowtech 2y ago

It's definitely a bubble. Sam Altman wants to build $7tn worth of data centers; if that's not an indication of how ridiculous this has gotten, I don't know what is. LLM has been vastly oversold to the general public as "AI" when the technology is nowhere near that. We haven't invented turing complete robots that independently identify problems, learn the solutions, and respond. LLM as a technology might not ever be able to do that, by the nature of how it works. We have only created chatbots that reply to prompts, with a higher than acceptable inaccuracy rate. And yet this justifies $7tn. But silicon valley figured out that saying "AIAI" on repeat works for funding, then other companies started pretending they were the same for the instant stock gain. Rising interest rates and this wave led everyone to pull out of other companies and dump into anything vaguely related to AI. They rode the price up, and now that interest rates are falling (making other companies more attractive) they are rotating out. This probably didn't become a full on bubble like crypto did because interest rates were high. It's still a bubble, but seems to be pricking of its own accord as opposed to becoming a gigantic, systemic problem. That said, when rates fall again, we might see a second boom there. Or maybe another fad will strike silicon valley, to continue the trend. VR - Crypto - Metaverse - LLM?

randcraw 2y ago
Part of the problem in AI is the lack of useful benchmarks that show progress is being made in skill areas where AI will truly be useful and transformational. I mean, who cares if a LLM can pass a bar exam or real estate license test?
- tivert 2y ago
  > Part of the problem in AI is the lack of useful benchmarks that show progress is being made in skill areas where AI will truly be useful and transformational. There also needs to be discussion if the transformations AI can make possible are actually for the common good. They'll certainly be good for a small minority (e.g. certain billionaires), but its hype-men seem to be lazily gesturing to utopian sci-fi and lazy and oversimple economic thinking to justify it [1]. But it's probably hopeless, since SV is a technopoly and has too much influence. [1] Like assuming there will always be work for all people in the face of automation, that people will be better off if goods get cheaper as their economic prospects dim, etc.

WhyNotHugo 2y ago

https://archive.ph/Pshsp https://archive.ph/Pshsp

1vuio0pswjnm7 2y ago

Works where archive.ph is blocked: https://www.msn.com/en-us/money/markets/big-tech-says-ai-is-booming-wall-street-is-starting-to-see-a-bubble/ar-BB1qxJH0 https://www.msn.com/en-us/money/markets/big-tech-says-ai-is-... Text-only: https://assets.msn.com/content/view/v2/Detail/en-in/BB1qxJH0 https://assets.msn.com/content/view/v2/Detail/en-in/BB1qxJH0

Dig1t 2y ago

It probably is a bubble in the same way the Internet created a bubble in the 90’s. A lot of hype based on the promise of the technology, and when it didn’t expand and pay out quickly enough the bubble “burst”. But over the following few decades the technology did end up living up to the hype, and then some. It’ll be the same with AI, probably the productivity gains won’t return quickly enough for the current rounds of investment, but on a long enough time line it will absolutely be well-placed hype.

vrighter 2y ago

They keep building the same thing, but bigger. It keeps exhibiting the exact same issues. It is a bubble because it is very clear that the tech is hitting a dead end.