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There doesn't need to be any such scenario, and there almost certainly isn't one. NewHype valuations reflect how confident current investors are that later inv

There doesn't need to be any such scenario, and there almost certainly isn't one. NewHype valuations reflect how confident current investors are that later investors are still coming and have nothing to do with specific profit models. Maybe the hype will pay off or maybe it won't, but during this phase all I need to believe is that I can get out before the tide turns. At this point, the carrot that keeps investors coming is that many many people still believe at least one of these companies will become the next IBM/Microsoft/Apple/Google in one way or another and we don't know which one yet. It's just buying tradable bets on a horse race that won't see its end for several more years. One horse could win, all the horses could drop dead, and none of it matters today: the game is in deftly trading those betting tickets as the odds shift.

throwup238 2y ago
This is the best take here. We’re in gold rush mode, everybody thinks there’s gold there and that the potential reward is worth the risk, even knowing that there’s a significant chance that their claim won’t find enough gold to make the investment worth it.
lawn 2y ago
Also called "selling to the greater fool", which has fueled bubbles for as long as we've recorded bubbles.
pj_mukh 2y ago
OR, the pie is big enough that a monopoly isn't required. The effect on the economy is so large that all of these companies become money printing machines. I personally don't think this is possible unless these AI Companies translate from just bits to atoms but that's not out of the question[1]. [1]: https://venturebeat.com/ai/openai-has-begun-building-out-its-robotics-team/ https://venturebeat.com/ai/openai-has-begun-building-out-its...
TechDebtDevin 2y ago
With 8 billion being their largest investor being Amazon, who has proclaimed they're going to spend 100bb on similar investments, these valuations and investment sizes, aren't even large relative to the investor's bankroll.

throwup238 2y ago

This is the best take here. We’re in gold rush mode, everybody thinks there’s gold there and that the potential reward is worth the risk, even knowing that there’s a significant chance that their claim won’t find enough gold to make the investment worth it.

lawn 2y ago

Also called "selling to the greater fool", which has fueled bubbles for as long as we've recorded bubbles.

pj_mukh 2y ago

OR, the pie is big enough that a monopoly isn't required. The effect on the economy is so large that all of these companies become money printing machines. I personally don't think this is possible unless these AI Companies translate from just bits to atoms but that's not out of the question[1]. [1]: https://venturebeat.com/ai/openai-has-begun-building-out-its-robotics-team/ https://venturebeat.com/ai/openai-has-begun-building-out-its...

TechDebtDevin 2y ago

With 8 billion being their largest investor being Amazon, who has proclaimed they're going to spend 100bb on similar investments, these valuations and investment sizes, aren't even large relative to the investor's bankroll.