5 ms·

I have started to notice this as well over the past several months, in-fact, I would say it is orders of magnitude larger than the Crypto bubble and when it bur

I have started to notice this as well over the past several months, in-fact, I would say it is orders of magnitude larger than the Crypto bubble and when it bursts will be significantly more impactful. Right now, everything is propped up on the premise the hyperscalers will grow EPS proportionately to their investment and that ROA is being priced in as a best case scenario (hope) in their share price. Maybe its not ROA at all, maybe its simply FOMO, we keep citing this 'AI Race' as if there is some end objective to 'win' drawing parallels to the nuclear arms race that only resulted in massive wasted CAPEX in decaying nukes sitting in unused bunkers since the cold war. (Not to mention it isn't even clear this arms race played a direct factor in the war beside depleting resources) Everyone is happy right now. Execs get stock bonuses, investors get returns, vendors get contracts. Once this is questioned, and history demonstrates it undoubtedly will be, it will cause a cascading collapse. History is a mathematical truth.

ubercore 1y ago
The usable amount of AI, no matter how optimistic you are about current progression, has to be below the projections the entire AI economy is living on right now.
- Matthyze 1y ago
  A considerable group of people think AGI or even ASI is right around the corner
  - caleb-allen 1y ago
    Sure, just as a considerable group of alchemists believed the recipe for gold was right around the corner
    - jayGlow 1y ago
      technically we can turn lead into gold now though it's not economical or scalable. so the alchemist were proven right in the end.
      - chemicalbye 1y ago
        > so the alchemist were proven right in the end. Except for the fact that it wasn't right around the corner???
  - ponector 1y ago
    Coincidence, it is the same group trying to sell "AI" startup/services. Modern AI is not an intelligence. Wonder what crap they are calling AGI.
  - lm28469 1y ago
    Remove the people with horses in the race and your "considerable" group becomes much much smaller.
  - conartist6 1y ago
    I've never gotten a straight answer as to whether AGI is a good thing for humanity or the economy. Real AGI would be alive and would be capable of art and music and suffering and community, of course. So there would really be no more need for humans except to shovel the coal (or bodies of other humans) into the furnace that power the Truly Valuable members is society, the superintelligent AIs, which all other aspects of our society will be structured towards serving. Real AGI might realistically decide to go to war with us if we've leaned anything from current LLMs and their penchant for blackmail
    - cindyllm 1y ago
      [dead]
    - soiltype 1y ago
      That's all been thought of, yeah. No, AGI isn't a good thing. We should expect it to go badly, because there are so many ways it could be catastrophic. Bad outcomes might even be the default without intervention. We have virtually no idea how to drive good outcomes of AGI. AGI isn't being pursued because it will be good, it's being pursued because it is believed to be more-or-less inevitable, and everyone wants to be the one holding the reins for the best odds of survival and/or being crowned god-emperor (this is pretty obviously sam altman's angle for example)
      - diamond559 1y ago
        Is it believed to be inevitable, or are their careers just dependent on that being the case at all costs.
        conartist6 1y ago
        Those seem the same to me
        soiltype 1y ago
        it is believed by some to be inevitable, yes.
  - freejazz 1y ago
    Don't a considerable group of people think the rapture is right around the corner? https://www.pewresearch.org/short-reads/2022/12/08/about-four-in-ten-u-s-adults-believe-humanity-is-living-in-the-end-times/ https://www.pewresearch.org/short-reads/2022/12/08/about-fou...
    - etempleton 1y ago
      Always.
    - paulryanrogers 1y ago
      A surprisingly sticky belief when taught young enough. Anxiety about having been left behind every time you come home to an empty house is just a bonus. Thankfully education about physics, first principles, and critical thinking got me out from under it. Hopefully they can do the same for the rest--if we get them young enough.
  - fuzzfactor 1y ago
    If it was that close I think they would have made well over half their money back by now . . .
- fuzzfactor 1y ago
  You've got to figure that the mega-capitalists have so much more discretionary accumulated resources relative to government than ever. Other than government, is there anybody else who can loosen the purse strings a little bit and have it not act as a temporary stimulant as long as it lasts? Whether they wish it would last or even provide any benefit to the average person, seems like there are plenty who wouldn't wish more prosperity on anyone who doesn't already have it :\ The only real way for long-term growth would be to plant seeds rather than dispense mere artificial stimulants. Unless AI makes the general public way more than capitalists have spent, it wouldn't be worth any increase in cost whatsoever for things like energy or hardware. Even non-AI software could become unaffordable if their labor costs go up enough too keep top people from being poached by AI companies flush with cash. I bet even the real estate near the data centers gets more unaffordable, at the same time clocking a win for the local economy due to the increased cash flow and tax revenue. Except all that additional cash is flowing out of peoples' pockets not in :\
- gopher_space 1y ago
  Looking at the actual job I'm leveraging software to do, we've progressed past the point where I can do everything I want to do in-house on my own hardware. The bottlenecks in my processes are now human, procedural, and there for a reason. It feels like the AI economy is being propped up by the idea that we're right around the corner from a fabled C-suite promised land where "labor" is unnecessary, but we've already been there for like a year now if you don't need a machine to explain your own business model to you, and it's basically free.
spaceman_2020 1y ago
At the moment, every AI service is dealing with capacity issues. Demand is much bigger than supply. As long as that remains true, don't see how this bubble will be popped
- serial_dev 1y ago
  I’m sure someone has numbers but I do wonder how many of their users pay and whether that covers the free users. It can still be a bubble even with high demand, if you are burning money to serve those users, because you hope one day you will rule the galaxy. I don’t really have a strong preference, so I just use any service where I’m currently not rate limited. There are many of them and I don’t see much difference between them for day to day use. My company pays for Cursor but I burned through my monthly quota in a day working on a proof of concept that mirrored their SDK in a different language. Was it nice that I could develop a proof of concept? Yes. Would I pay 500 dollars for it from my own pocket? No, I don’t think so. It’s like those extremely cheap food and grocery delivery apps, they made their food cheap, no delivery fees for a while… of course everyone was using it. Then, they started to run out of VC money, they had to raise prices, then suddenly nobody used them anymore and they went bankrupt. There was demand, but only because of the suppressed prices fueled by VC money.
  - JimDabell 1y ago
    > I do wonder how many of their users pay and whether that covers the free users. It doesn’t cover the free users, but that’s normal startup strategy. They are using investor cash to grow as quickly as possible. This involves providing as much free service as they can afford so that some of those free users convert to paid customers. At any point they can decide not to give so much free service away to rebalance in favour of profitability over growth. The cost of inference is plummeting, so it’s getting cheaper to service those free users all the time. > It’s like those extremely cheap food and grocery delivery apps, they made their food cheap, no delivery fees for a while… […] they started to run out of VC money, they had to raise prices That’s not the same situation because that makes the product more expensive for the customers, which will hit sales. This isn’t the same as cutting back on a free tier, because in that situation you’re not doing anything to harm your customers’ service.
ponector 1y ago
At least we will have a huge amount of data centers if this bubble burst. Insane compute overcapacity, as well in chip manufacture
- diegocg 1y ago
  Reminds me of all the optic fiber infrastructure that was built during the dot com bubble
  - ponector 1y ago
    Yes, this bubble is much better than crypto/nft. Same as mentioned railroad rush - capex burned, but lots of stuff have been built and left after burst.
  - saati 1y ago
    But fiber optics are different, they stay good for a very long while and you just need to add better transceivers at the ends to upgrade them, it's questionable whether the current GPUs are even worth powering up once 2nm ones are out, and we also don't know how long they last, electromigration might start killing them in 5 years.
    - oxag3n 1y ago
      GPUs might become obsolete after the AI bubble bursts, but tons of supporting infrastructure, including non-GPU servers, will be in the market for pennies.
- IsTom 1y ago
  I worry about correction in chip manufacture after this – will the fab industry get even more concentrated? What if the remaining fabs scale down and set us back a decade or two cutting edge chip research? Will GPUs become extraordinarily expensive?
begueradj 1y ago
"History is a mathematical truth" No, history is a web of lies written by the winners, just like your daily news.
- hackable_sand 1y ago
  The truth always comes out. Always.
j45 1y ago
One thing that's different about AI is it's a greater percentage applicable in the real world today than most bubble things that are more hype and speculation mostly by non-technical people who are attention farming. This statement is unrelated to the funding in the space, which is not going to be mis placed, only a question of how much. If anything, this might be a realer version of a dot com boom.
etempleton 1y ago
It is a bubble. It will collapse. The only thing that might cushion the collapse a bit is that most of the capital is from large tech companies that can absorb the fallout and pivot to the next thing. The hardware and infrastructure should be able to be leveraged for other things.
- packetlost 1y ago
  Oracle really does seem poised to be the winner here.
  - etempleton 1y ago
    It was a shrewd move by Oracle.
bamboozled 1y ago
That's why every layoff is now "because of AI", it's the perfect cover up for, "the forecast isn't looking great". No no, we're about to 10x!
fennecbutt 1y ago
And lemme guess, we'll all pay for it again. Yaaaaay. We voted for this!!!!
8ytecoder 1y ago
I think it’s more like the “crash” that never happened with Uber/gig and crypto. I can’t tell if it’s just luck with one craze seamlessly enabling another in some cosmic coincidence or smart people being able to absorb the excess capital and capacity to pivot gracefully. It’s basically similar to biking on rolling hills with each subsequent hill being a lot taller than the previous one. You come down the hill hard, but just before you crash to the ground, another hill comes up, and you let the momentum carry you through, and you also get a gush of wind in your back. That’s what’s been happening since 2012 - it’s a great 13-year run now. I’ve stopped betting against it.
NuclearPM 1y ago
Orders of magnitude? Like 100x?

ubercore 1y ago

The usable amount of AI, no matter how optimistic you are about current progression, has to be below the projections the entire AI economy is living on right now.

Matthyze 1y ago
A considerable group of people think AGI or even ASI is right around the corner
- caleb-allen 1y ago
  Sure, just as a considerable group of alchemists believed the recipe for gold was right around the corner
  - jayGlow 1y ago
    technically we can turn lead into gold now though it's not economical or scalable. so the alchemist were proven right in the end.
    - chemicalbye 1y ago
      > so the alchemist were proven right in the end. Except for the fact that it wasn't right around the corner???
- ponector 1y ago
  Coincidence, it is the same group trying to sell "AI" startup/services. Modern AI is not an intelligence. Wonder what crap they are calling AGI.
- lm28469 1y ago
  Remove the people with horses in the race and your "considerable" group becomes much much smaller.
- conartist6 1y ago
  I've never gotten a straight answer as to whether AGI is a good thing for humanity or the economy. Real AGI would be alive and would be capable of art and music and suffering and community, of course. So there would really be no more need for humans except to shovel the coal (or bodies of other humans) into the furnace that power the Truly Valuable members is society, the superintelligent AIs, which all other aspects of our society will be structured towards serving. Real AGI might realistically decide to go to war with us if we've leaned anything from current LLMs and their penchant for blackmail
  - cindyllm 1y ago
    [dead]
  - soiltype 1y ago
    That's all been thought of, yeah. No, AGI isn't a good thing. We should expect it to go badly, because there are so many ways it could be catastrophic. Bad outcomes might even be the default without intervention. We have virtually no idea how to drive good outcomes of AGI. AGI isn't being pursued because it will be good, it's being pursued because it is believed to be more-or-less inevitable, and everyone wants to be the one holding the reins for the best odds of survival and/or being crowned god-emperor (this is pretty obviously sam altman's angle for example)
    - diamond559 1y ago
      Is it believed to be inevitable, or are their careers just dependent on that being the case at all costs.
      - conartist6 1y ago
        Those seem the same to me
      - soiltype 1y ago
        it is believed by some to be inevitable, yes.
- freejazz 1y ago
  Don't a considerable group of people think the rapture is right around the corner? https://www.pewresearch.org/short-reads/2022/12/08/about-four-in-ten-u-s-adults-believe-humanity-is-living-in-the-end-times/ https://www.pewresearch.org/short-reads/2022/12/08/about-fou...
  - etempleton 1y ago
    Always.
  - paulryanrogers 1y ago
    A surprisingly sticky belief when taught young enough. Anxiety about having been left behind every time you come home to an empty house is just a bonus. Thankfully education about physics, first principles, and critical thinking got me out from under it. Hopefully they can do the same for the rest--if we get them young enough.
- fuzzfactor 1y ago
  If it was that close I think they would have made well over half their money back by now . . .
fuzzfactor 1y ago
You've got to figure that the mega-capitalists have so much more discretionary accumulated resources relative to government than ever. Other than government, is there anybody else who can loosen the purse strings a little bit and have it not act as a temporary stimulant as long as it lasts? Whether they wish it would last or even provide any benefit to the average person, seems like there are plenty who wouldn't wish more prosperity on anyone who doesn't already have it :\ The only real way for long-term growth would be to plant seeds rather than dispense mere artificial stimulants. Unless AI makes the general public way more than capitalists have spent, it wouldn't be worth any increase in cost whatsoever for things like energy or hardware. Even non-AI software could become unaffordable if their labor costs go up enough too keep top people from being poached by AI companies flush with cash. I bet even the real estate near the data centers gets more unaffordable, at the same time clocking a win for the local economy due to the increased cash flow and tax revenue. Except all that additional cash is flowing out of peoples' pockets not in :\
gopher_space 1y ago
Looking at the actual job I'm leveraging software to do, we've progressed past the point where I can do everything I want to do in-house on my own hardware. The bottlenecks in my processes are now human, procedural, and there for a reason. It feels like the AI economy is being propped up by the idea that we're right around the corner from a fabled C-suite promised land where "labor" is unnecessary, but we've already been there for like a year now if you don't need a machine to explain your own business model to you, and it's basically free.

spaceman_2020 1y ago

At the moment, every AI service is dealing with capacity issues. Demand is much bigger than supply. As long as that remains true, don't see how this bubble will be popped

serial_dev 1y ago
I’m sure someone has numbers but I do wonder how many of their users pay and whether that covers the free users. It can still be a bubble even with high demand, if you are burning money to serve those users, because you hope one day you will rule the galaxy. I don’t really have a strong preference, so I just use any service where I’m currently not rate limited. There are many of them and I don’t see much difference between them for day to day use. My company pays for Cursor but I burned through my monthly quota in a day working on a proof of concept that mirrored their SDK in a different language. Was it nice that I could develop a proof of concept? Yes. Would I pay 500 dollars for it from my own pocket? No, I don’t think so. It’s like those extremely cheap food and grocery delivery apps, they made their food cheap, no delivery fees for a while… of course everyone was using it. Then, they started to run out of VC money, they had to raise prices, then suddenly nobody used them anymore and they went bankrupt. There was demand, but only because of the suppressed prices fueled by VC money.
- JimDabell 1y ago
  > I do wonder how many of their users pay and whether that covers the free users. It doesn’t cover the free users, but that’s normal startup strategy. They are using investor cash to grow as quickly as possible. This involves providing as much free service as they can afford so that some of those free users convert to paid customers. At any point they can decide not to give so much free service away to rebalance in favour of profitability over growth. The cost of inference is plummeting, so it’s getting cheaper to service those free users all the time. > It’s like those extremely cheap food and grocery delivery apps, they made their food cheap, no delivery fees for a while… […] they started to run out of VC money, they had to raise prices That’s not the same situation because that makes the product more expensive for the customers, which will hit sales. This isn’t the same as cutting back on a free tier, because in that situation you’re not doing anything to harm your customers’ service.

ponector 1y ago

At least we will have a huge amount of data centers if this bubble burst. Insane compute overcapacity, as well in chip manufacture

diegocg 1y ago
Reminds me of all the optic fiber infrastructure that was built during the dot com bubble
- ponector 1y ago
  Yes, this bubble is much better than crypto/nft. Same as mentioned railroad rush - capex burned, but lots of stuff have been built and left after burst.
- saati 1y ago
  But fiber optics are different, they stay good for a very long while and you just need to add better transceivers at the ends to upgrade them, it's questionable whether the current GPUs are even worth powering up once 2nm ones are out, and we also don't know how long they last, electromigration might start killing them in 5 years.
  - oxag3n 1y ago
    GPUs might become obsolete after the AI bubble bursts, but tons of supporting infrastructure, including non-GPU servers, will be in the market for pennies.
IsTom 1y ago
I worry about correction in chip manufacture after this – will the fab industry get even more concentrated? What if the remaining fabs scale down and set us back a decade or two cutting edge chip research? Will GPUs become extraordinarily expensive?

begueradj 1y ago

"History is a mathematical truth" No, history is a web of lies written by the winners, just like your daily news.

hackable_sand 1y ago
The truth always comes out. Always.

j45 1y ago

One thing that's different about AI is it's a greater percentage applicable in the real world today than most bubble things that are more hype and speculation mostly by non-technical people who are attention farming. This statement is unrelated to the funding in the space, which is not going to be mis placed, only a question of how much. If anything, this might be a realer version of a dot com boom.

etempleton 1y ago

It is a bubble. It will collapse. The only thing that might cushion the collapse a bit is that most of the capital is from large tech companies that can absorb the fallout and pivot to the next thing. The hardware and infrastructure should be able to be leveraged for other things.

packetlost 1y ago
Oracle really does seem poised to be the winner here.
- etempleton 1y ago
  It was a shrewd move by Oracle.

bamboozled 1y ago

That's why every layoff is now "because of AI", it's the perfect cover up for, "the forecast isn't looking great". No no, we're about to 10x!

fennecbutt 1y ago

And lemme guess, we'll all pay for it again. Yaaaaay. We voted for this!!!!

8ytecoder 1y ago

I think it’s more like the “crash” that never happened with Uber/gig and crypto. I can’t tell if it’s just luck with one craze seamlessly enabling another in some cosmic coincidence or smart people being able to absorb the excess capital and capacity to pivot gracefully. It’s basically similar to biking on rolling hills with each subsequent hill being a lot taller than the previous one. You come down the hill hard, but just before you crash to the ground, another hill comes up, and you let the momentum carry you through, and you also get a gush of wind in your back. That’s what’s been happening since 2012 - it’s a great 13-year run now. I’ve stopped betting against it.

NuclearPM 1y ago

Orders of magnitude? Like 100x?