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Is the A.I. Boom Turning Into an A.I. Bubble?
- vaenaes 1y ago[flagged]
- antithesizer 1y agoI remember reading this two years ago. And one year ago, too.
- ch4s3 1y agoYeah, I mean there's a chance they're wrong and some chance they'll eventually be right. At this point it's clearly impossible to say for sure what the outcome might be. There were plenty of people in 2005 saying there was a housing bubble in the making and plenty of evidence that they were wrong. Were they right but too early? Were they wrong on fundamentals but happened to have guessed right? We could be seeing something similar here where the nay sayers are right for the wrong reasons, or they're simply haters whose desires may align with the eventual outcomes. Or not.
- wongarsu 1y agoThere were also people who said in 1999 that there was an unsustainable bubble of "internet" businesses. And they were right. The bubble burst, and the internet still went on to change the world No doubt there's a lot of stuff right now that's completely overvalued, and companies that try to do things that the technology just isn't ready for yet. Those will eventually be culled, either one by one or all at once in a big burst. But for the way AI changes industries and our lifes that will only be a speed bump
- ch4s3 1y agoThis is essentially what I’m saying. More succinctly, you can be right or wrong about a macro trend but your correctness is probably more time-boxed than people expect.
- deleted 1y ago[deleted]
- derektank 1y agoThe market can remain irrational longer than you can remain solvent
- eikenberry 1y agoBubbles can last much longer than a couple years. The housing bubble in the US that finally popped in 2008 was building for at least a decade.
- matthewdgreen 1y agoI remember reading this for years before the dot com bubble imploded, years before the housing bubble impoded, and months before the market woke up to the fact that COVID existed. (At least governments decided to print that last one away.) On a more serious note, the fundamental issue in the first two crashes was that the markets stopped being able to rationally price things. My view is that this doesn't always mean there will be an immediate crash. It just means that when the inevitable downturn does happen, nobody will be able to figure out the correct pricing for anything -- and so a correction turns into a catastrophe.
- standardUser 1y agoA Tobin tax would do wonders to help decrease the delta between boom and bubble. But with the international economic order being shredded as we speak, that possibility seems further away than ever.
- mumbisChungo 1y agoNo matter how right the AI crowd is, elements of it are/will be a bubble. No matter how right the bubble crowd is, the market becoming irrationally exuberant for a brief period of time does not invalidate the technology or the rapid change we'll see as a result of it.
- DragonStrength 1y agoFor sure, the Dotcom crash didn’t mean the web was bad technology.
- jameshart 1y agoNot technically bad, anyway. Just… socially destructive to the fragile web that held society together.
- NitpickLawyer 1y agoYeah, this is what all the bubbleists miss. We got FAANG++ out of the last bubble, and they literally rule the world with the tech that was promised during said bubble. Catsdotcom and dogsdotcom failing had 0 impact on the tech itself. It's the same today. A lot of the hyperVCfunded startups will fail, without a doubt. But the tech giants will get their money from this tech, and it will be ubiquitous in ways we can't even imagine now.
- strange_quark 1y agoI'm not sure that the dotcom bubble leaving behind the web means that AI (and by AI I mean LLMs) are going to be transformative in the same way the internet was. Just because it happened once doesn't necessarily mean it's going to happen again. To be clear, I don't think LLMs are going to vanish, there's clearly some things they're good for, but there's also some really big differences between the AI bubble and the dotcom bubble. People are very skeptical and worried about AI, they (the general public) aren't really using it for anything more than search, there hasn't been any clear economic data indicating that it improves productivity in a meaningful way, and a killer app hasn't really emerged that isn't a free chatbot. Plus, the majority of the money is concentrated in the same 5 or 10 companies just passing it back and forth between each other before eventually handing it over to NVIDIA. Maybe I was just too young to pay attention to the dotcom bubble, but the vibe seems completely different.
- kelseyfrog 1y agoOf course it is. Investors can't set realistic expectations for AI, so an ocean of capital is chasing a dream. When the rent comes due, the quick will cut and run. The rest will turn to extraction. If you want a front-row seat to the clusterfuck that is aligning LLMs with product placement or selling users' conversations to advertisers, you're in luck. Grab some popcorn.
- ath3nd 1y agoSome articles arguing that's already the case (and why): - https://www.wheresyoured.at/ai-is-a-money-trap/ https://www.wheresyoured.at/ai-is-a-money-trap/ - https://www.wheresyoured.at/anthropic-and-openai-have-begun-the-subprime-ai-crisis/ https://www.wheresyoured.at/anthropic-and-openai-have-begun-... For me, the only consolation is things seem to be moving fast nowadays so the inevitable collapse must be close. See what happened to Github's CEO, it took 1 week from cocky to fired, hopefully the same happens to sama, Zuck, Musk and all the snake oil salesmen in this space: - 2-nd of Aug 2025 Github CEO delivers stark message to developers: "Embrace AI or get out of the industry" https://www.businessinsider.com/github-ceo-developers-embrace-ai-or-get-out-2025-8?international=true&r=US&IR=T https://www.businessinsider.com/github-ceo-developers-embrac... - 11-th of Aug 2025 Github CEO resigns https://www.theverge.com/news/757461/microsoft-github-thomas-dohmke-resignation-coreai-team-transition https://www.theverge.com/news/757461/microsoft-github-thomas... Hopefully the amount of instability in the space and the many signals of stagnation (e.g OpenAI's valuation divorced from reality, the GPT-5 release, Claude changing their limits, Meta spending millions on single hires) will indicate to people paying attention that it's a very volatile and bubbl-y space to invest in. Sources: https://www.theregister.com/2025/03/26/microsoft_ai_apocalypse/ https://www.theregister.com/2025/03/26/microsoft_ai_apocalyp... https://nypost.com/2025/08/01/business/meta-pays-250m-to-lure-24-year-old-ai-whiz-kid-we-have-reached-the-climax-of-revenge-of-the-nerds/ https://nypost.com/2025/08/01/business/meta-pays-250m-to-lur... https://techcrunch.com/2025/07/28/anthropic-unveils-new-rate-limits-to-curb-claude-code-power-users/ https://techcrunch.com/2025/07/28/anthropic-unveils-new-rate... https://arstechnica.com/information-technology/2025/08/the-gpt-5-rollout-has-been-a-big-mess/ https://arstechnica.com/information-technology/2025/08/the-g... https://fortune.com/2025/08/08/openais-reported-500-billion-valuation-signals-ai-euphoria/ https://fortune.com/2025/08/08/openais-reported-500-billion-... https://finance.yahoo.com/news/beneath-ai-bubble-economy-looks-145656759.html https://finance.yahoo.com/news/beneath-ai-bubble-economy-loo... I personally can't wait for the bubble to burst so I can "told you so" to all the enthusiasts/fanboys.
- neals 1y agoIt's helping me find things, understand things and do things. I'm sure some of those startups will figure something out that makes sense. And eat the rest.
- dkarl 1y agoThis was the story of Amazon in the .com bubble, but buying Amazon in 1999 was not a good deal. Even if you know who the winner is going to be, you can still lose.
- janlukacs 1y agoPlease share examples. Real life game changing examples that were not possible before.
- deleted 1y ago[deleted]
- neals 1y agoNo
- stuckinhell 1y agoI think a Wharton Professor Ethan Mollick said it nicely: Whats the capex on creating GOD?
- janlukacs 1y agoYet, it's not GOD it's a parrot.
- gafferongames 1y agosquaaauk there are THREE b's in blueberry!
- devin 1y agoWhat a facile thing to say. Embarrassing, too
- it_citizen 1y ago> The global pandemic will tank the stock market > War in Ukraine will tank the stock market > High interest rates will tank the stock market > Tariffs will tank the stock market > IA will tank the stock market <- We are here All those statements made sense to me at the time. And I have no doubt that one of these days, someone will make a correct prediction. But who the hell know what and when. Diversify, be reasonable and be prepared for it to happen someday. But freaking out with any new prediction of doom is not the winning strategy.
- nothercastle 1y agoAi is the stock market so there is that problem
- apwell23 1y agoTrump election will tank the stock market - Many nobel prize economists and experts .
- Fernicia 1y agoHe did though. The S&P 500 fell 18% around Mar/Apr. That's unprecedented for a US market experiencing no external shocks.
- matthewdgreen 1y agoAnd the US dollar is still down 10%.
- apwell23 1y ago> The S&P 500 fell 18% around Mar/Apr. where ? i don't see it.
- ringeryless 1y agooh, wait and see, my child, this is merely the beginning of the story.
- bcrosby95 1y ago
- hodgehog11 1y agoI get this sinking feeling that this "bubble" may never burst on its own, since the political environment now is different from the 2000s. Inequality is much higher post-COVID, with the ultra-wealthy sucking up the assets of the middle class. Those assets are going into the stock market for AI companies with the objective of eventually replacing people so they never need to pay the working or middle class ever again. Even if the AI doesn't perform quite at the level of normal employees, there's very little competition in the market anyway. I'd be happy for someone to tell me I'm wrong. Otherwise it will take something dire to break this cycle.
- matthewdgreen 1y agoI saw a figure yesterday showing that current AI data center investment exceeds all consumer spending in terms of GDP. This is important, because consumer spending is normally 2/3rds of GDP. This means consumer spending isn't great, and data center investments probably can't sustain this pace forever. It's also not clear that there will be a return on these investments (one that flows to the specific companies seeing the investment.)
- strange_quark 1y agoI think the figure wasn't that data center capex exceeded consumer spending, but that data center capex contributed more to GDP growth than consumer spending did. Still really really bad and indicative of a bubble, but an important difference.
- smitty1e 1y agoTINFOIL HAT SAYS: Since you used the P-word, consider the 2008 election and the possibility that a similar bubble-bursting occurring at the appropriate time to maximize chances to flip Congress in 2026.
- techpineapple 1y agoYou think the kind of people propping up the AI bubble want congress to flip?
- seanmcdirmid 1y agoPeople have been saying this at least for the last 10 years. I think if advancements stop being made at a rapid clip, the bubble might implode. But every year it seems like its a whole new ballgame. When LLMs start playing the stock market autonomously, then we should start worrying.
- marcosdumay 1y agoOh, man, there have been 10 years since ChatGPT made the news in 2022? How time flies!
- seanmcdirmid 1y agoPeople have been predicting an AI winter ever since DNNs hit it big, and that was 2012/2013 or so. And then every year since 2015 they've been saying "this is the year the AI bubble will finally burst!" And then repeat that the next year. ChatGPT was just another big leap in a bunch of big leaps that occurred in the last 15 years. You are being disingenuous in pretending that people didn't see AI as being hyped before ChatGPT came out.
- marcosdumay 1y agoThe finance bubble is pretty much a post-ChatGTP phenomenon. There was some hype about AI before it, for completely unrelated products, with varying levels of real value behind them. What bubble there was about those has already popped long ago, missing the headlines because of the crypto hype.
- seanmcdirmid 1y agoIf you've been with HN for awhile, or you search the archives, similar topics to "Is the AI booming turning into an AI bubble" kept popping up long before CHatGPT came out. And this was DNNs, and it was same people (e.g. Hinton and his students) who were at the forefront of that also. And no, their previous projects didn't go bust.
- bithive123 1y agoOf course it's a bubble. It's only about 20% as useful as the claims driving the current irrational exuberance. All it can do is generate pictures and text, and we had those _coming out our eyeballs_ for at least a decade. Prior to generative AI, each of us already had more access to images and text with which to stimulate ourselves than we could consume in a lifetime. When did we forget that discovering "truth" via symbol manipulation is a fraught proposition at best? It was in the 17th century that Leibniz proposed that encoding logical propositions into a propositional calculus would allow all intellectual disputes to be resolved mechanically. "For it would suffice for them to take their pencils in their hands and to sit down at the abacus, and say to each other (and if they so wish also to a friend called to help): Let us calculate." The original AI bro! Any day now... I've been thinking lately that the real value of a piece of code is that there is at least one human alive somewhere supporting it. You remove that, and the value proposition gets extremely shaky. Folks are going to have to learn this first hand as their brain becomes full of echoes of LLM output, rather than the output being an echo of some brain process (you know, _actual_ intelligence). But sure, if you can convince enough people that you've invented a real magic 8-ball, you might be able to convince enough of them to shake it for the rest of their lives. Me, I'm not convinced that the marginal value of "new" text and images is there.
- theredleft 1y agoTurning into? It already is. I wish I had a hedge fund to direct towards shorting AI-driven companies.
- teaearlgraycold 1y agoNow I’m torn between Betteridge's law and my belief that we’re in a bubble.
- Ygg2 1y agoNo. It was always a bubble. You can thank me later.
- ausbah 1y ago9 of the past 5 market crashes have been successfully predicted
- simianwords 1y agothey wouldn’t have happened if they were predicted largely by the market.
- ASalazarMX 1y agoWith MSFT being worth 4 trillions right now, it looks like a legitimate AI bubble. Those valuations have entered the realm of fantasy.
- simianwords 1y agoTo analyze whether AI is a bubble you need to analyze its value (like value investing). I find this article hollow because nowhere does it analyze the value or potential of AI.
- justcallmejm 1y ago"In the A.I. economy, it seems possible that many of the rewards will go to top firms that can afford to build and maintain large A.I. models..." This is a flawed (and common, still, somehow!) idea of where value is within AI. The gigantic models are commoditizing rapidly. They practically incinerate cash. There is real value being created at the layer where users can use a product they can actually trust. LLMs are certainly not that. Our system, Aloe, is model agnostic - so when next month's model comes out we just get better. And we already beat the pants off the frontier models in capability, spending a tiny fraction of a percent of the capital to build the system. The existing concentration of capital into big LLM companies is indeed a bubble. Eventually some of those VCs will wake up and invest where the value is being created, I presume.
- gervwyk 1y agowas cloud computing ever a bubble. yes. did it stabilize. sure. but its a powerful utility that shifted and created new value. the only speculation is where and by how much. the rush of new tech is always confusing, new tools requires new skills and time to find its place in the world.
- ASalazarMX 1y agoThe AI bubble is, IMO, more like the DotCom bubble, where every startup believed having a modern website would return investments many times over. The only companies becoming rich are the ones selling shovels.
- leopoldj 1y agoOver-investment in a new technology seems to be a common thing. It happened with the Internet and railroad. A bubble forms which pops. But the process leaves behind valuable infrastructure.
- nativeit 1y agoIt's too bad the infrastructure in this context largely becomes obsolete in under a decade. Optimistically, we'll have a lot of data centers with a lot of generalized resources, but I have a feeling the margins get pretty thin on operating/maintaining those facilities absent high demand.
- HackerThemAll 1y agoConsidering that the average Joe is talking about profiting from AI, then yes, AI boom becomes AI bubble.
- ivansavz 1y agohttps://archive.is/bxEtW https://archive.is/bxEtW
- AbstractH24 1y agoTurning into? Vibes have told me it long ago became one.