5 ms·

Just How Bad Would an AI Bubble Be?

57 points by ForHackernews 1y ago

WaltPurvis 1y ago
http://archive.today/anbRZ http://archive.today/anbRZ
rr808 1y ago
> The entire U.S. economy is being propped up by the promise of productivity gains that seem very far from materializing. or, even worse perhaps the productivity gains will be high.
- whatshisface 1y ago
  I'm not sure if this point is essential or pedantic, but they're not claiming that the economy is being propped up, just stock prices.
  - idontwantthis 1y ago
    They are claiming both. Business spending on AI is more than all consumer spending combined as a share of GDP. That’s propping up the whole economy.
    - kjkjadksj 1y ago
      I don’t think its doing so much propping up because the spend is being thrown into a couple of piles. When companies hire some ai superstar for millions it isn’t like much of that money is circulating in the wider economy like if you invested it into a diversified portfolio or hired a lot of lower wage people who spend a much higher share of their paycheck on stuff that keeps it circulating in local economies. Likewise if that spend is going to server racks or electricity. The money just doesn’t have a lot of avenues to spill out into different subsets of the economy. This is probably what is going on when we see McD executives say there are basically two economies in the US at the moment, one doing very well for itself and the other experiencing a lot of hardship.
      - CommenterPerson 1y ago
        We might have some reserve power generation capacity after the bubble.
    - WaltPurvis 1y ago
      >Business spending on AI is more than all consumer spending combined as a share of GDP. Your phrasing there is misleading. The article says, "In the first half of this year, business spending on AI added more to GDP growth than all consumer spending combined," and the key is the "added more to GDP growth" part. Growth in consumer spending was sluggish, while growth in business AI spending was insane, so in terms of how much the economy grew, the rise in AI spending exceeded the rise in consumer spending. Which is pretty amazing, actually. But, as far as the total amount of spending, business AI is at most only a few percentage points of GDP (and that's if you interpret "business AI spending" very broadly), while consumer spending is somewhere around 67-70% of GDP.
      - idontwantthis 1y ago
        Thanks I did misunderstand that.
  - rr808 1y ago
    The post talks about how a lot of AI investment could just be a waste which would be bad for the economy and stocks. My comment is really a off-topic, its that if AI really does work well it'll put half of us out of work, leaving us to do non-knowledge work that the robots can't do yet.
dijit 1y ago
Is it even a question that we’re in a bubble? The effects of the technology would have to rival that of.. idk, soap and the locomotive combined? In order for us not to be in a bubble. It has swallowed nearly all discourse about technology and almost all development, nearly every single area of technology is showing markers of recession.. except AI, which has massively inflated salaries and valuations. I can’t even think of a scenario where we don’t look back on this as a bubble. What does the tech need to be able to do in order to cover its investment?
- unyttigfjelltol 1y ago
  > would have to rival that of.. idk, soap soap + water = bubble
- vmg12 1y ago
  > The effects of the technology would have to rival that of.. idk, soap and the locomotive combined? In order for us not to be in a bubble. Can you quantify this or are you going based on vibes? If I were to compare this to previous bubbles (ie crypto, dot com bubble), in valuation multiple terms we haven't gotten started. And a number of tech companies eventually grew into and surpassed their bubble valuations.
  - dijit 1y ago
    Soap was essentially the onset of what we’d consider urban living, before soap (and even for a long time after to be fair) medical operations had a stupidly hi morbidity and city life was also quite.. unsurvivable. Soap itself may not have been an investment, but it unlocked a lot of capabilities for our civilisation. Almost impossible to quantify how much. Locomotives were something that had a definite upfront cost, unlike soap, and we invested so much money - up to 3% of GDP in some years in the 1800s.. but the economic benefits were ridiculous. Spending on AI data centers is so massive that it's taken a bigger chunk of GDP growth than shopping! (according to Yahoo!: https://consent.yahoo.com/v2/collectConsent?sessionId=3_cc-session_40758a6a-40ab-4d52-a982-dd689cd7d152 https://consent.yahoo.com/v2/collectConsent?sessionId=3_cc-s...) I mean, it’s really apples to oranges, but I can’t imagine us getting the returns anywhere close to what rail gave us in the 1800s.
jstummbillig 1y ago
Ah, this is such a silly non-issue at this point in time. As long as I have to wait ~10 minutes to get my agent to return code, we are ~10 minutes of compute per request away from a bubble. 10 minutes covers a lot of compute. Nothing we are building right this second will not instantly be eaten up by improving already existing use cases (code, image generation, video generation) for a very long time.
- epa 1y ago
  Grok fast..
  - jstummbillig 1y ago
    ?
    - collingreen 1y ago
      Please wait, the ai is typing a response...
OtomotO 1y ago
Something can be useful and still be a bubble at the same time. AI is such a thing.
- jstummbillig 1y ago
  Care to explain?
  - OtomotO 1y ago
    I mostly see two extreme positions: Either AI is a total fraud, completely useless (at least for programming), or it's deus ex machina. But reality has more than one bit to answer questions like "Is AI a hype?" Despite only recently becoming a father and feeling like I am in my prime, I've seen many hypes. And IT is an eternal cycle of hypes. Every few years a new holy cow is sent through the village to bring salvation to all of us and rid us of every problem (un)imaginable. To give a few examples: Client-Server SPAs Industry 4.0 Machine Learning Agile Blockchain Cloud Managed Languages To me LLMs are nice, though no revelation. I can use them fine to generate JS or Python code, because apparently the training sets were big enough, and they help me by writing boilerplate code I was gonna write anyway. When I try them to help me write Rust or Zig, they fall extremely short though. LLMs are extremely overhyped. They made a few people very rich by promising too much. They are not AI by any means but marketing. But they are a tool. And as such they should be treated. Use them when appropriate, but don't hail them...
    - jstummbillig 1y ago
      "Is it a hype?" is a different question, that's just not very interesting to me. Anything will be described as both hyped and good, depending on who you ask. You were previously talking about AI being a bubble and also useful For reference, wikipedia defines a bubble as: "a period when current asset prices greatly exceed their intrinsic valuation". I find that hard to reason about. One way to think about it is that all that AI does is create economic value, and for it to be useful it would have to create more economic value than it destroys. But that's hard to reason about without knowing the actual economics of the business, which the labs are not super transparent about. On the other hand I would imagine that all that infra building by all big players shows some level of confidence that we are way past "is it going to be useful enough?". That is not what reasonable people do when they think there's a bubble, at least that would be unprecedented. And that's why I was asking.
frankc 1y ago
I don't know exactly where AI is going to go, but the fact that I keep seeing this one study of programmer productivity, with like 16 people with limited experience with cursor,uncritically quoted over and over assures me that the anti-AI fervor is at least as big of a bubble as the AI bubble itself.
- SpicyLemonZest 1y ago
  Do you have some other, better study in mind that people should be talking about? My sense is that comparative data is scarce, because leaders who believe in AI tend to believe in it so strongly that they mandate adoption rather than collecting data from organic growth.
- kjkjadksj 1y ago
  To be fair when you look at most studies that are hemm and hawwed over in the press, they tend to look like that. Well controlled, high n, replicated in independent cohorts, the readership of mass market media doesn’t understand any of this nuance. The bar is merely whatever seems to validate an existing bias whatever the topic since the incentives are built around engagement and not scientific truth.
- ath3nd 1y ago
  > uncritically quoted over and over assures me that the anti-AI fervor is at least as big of a bubble as the AI bubble itself. Counterpoint: the AI fanboys and AI companies, with all their insane funding couldn't come up with a better study and bigger sample size, because LLMs simply don't help experienced developers. What follows is that the billion dollar companies just couldn't create a better study, either because they tried and didn't like the productivity numbers not being in their favor (very likely), or because they are that sloppy and vibey that they don't know how to make a proper study (I wouldn't be surprised, see ChatGPT's latest features: "study mode" which had a blog post! and you know that the level is not very high). Again, until there is a better study, the consensus is LLMs are 19% productivity drain for experienced developers, and if they help certain developers, then most likely those developers are not experienced. How's that for an interpretation?
asdev 1y ago
Rates need to be higher, we are clearly in stagflation outside of AI. Once AI hype cools the stock market will correct. But we need to suck out all of the excess cash, cool consumer demand, which in turn will force businesses to lower their prices to attract customers.
- grg0 1y ago
  I am not strictly sure why you are being downvoted, but raising interest rates does not get you out of the 'stag' in stagflation; it actually makes it worse. Cue EU governments circa 2008 for a recent example of where that kind of economic policy gets you.
  - sharemywin 1y ago
    when your markets are hyper monopolized they can just produce less and jack prices up even more.
fishmicrowaver 1y ago
Yeah an exec asked me about the METR study, somewhat alarmed. I told him they were measuring productivity of open source developers. He didn't understand the implications. He was relieved when I informed him that he should still expect productivity gains because his devs were bad enough at their jobs to see a boost.
- sharemywin 1y ago
  I would see AI being a multiplying factor. and 3 * a negative number is 3 times worse.
Animats 1y ago
This is the trouble with AI as an "assistant". If it's good enough to do the job unattended, then there's a big increase in productivity. If it needs constant handholding, maybe not.
- nine_k 1y ago
  AI is not ready to be an "assistant". It can be used as a "tool" though. Far from self-driving, more like auto-parking and cruise control.
  - deleted 1y ago
    [deleted]
Mallowram 1y ago
[dead]
reb 1y ago
It's a good thought exercise, but the opening hinges on a premise that feels obviously wrong: that experts in doing work by hand will do that work faster with AI. My experience is that, in many cases, people who are very good at doing something by hand are excellent at the process of doing that thing by hand, not generally excellent at doing that thing or talking about that thing or teaching others how to do that thing. And I've found it to be true (sometimes particularly true) for people who have done that thing for a long time, even if they're actively interested in finding new and better ways to do the work. Their skills are fine-tuned for a manual way of working. Working with AI feels very, very different from writing software by hand. When I let myself lean into AI's strengths, it allows me to move much faster and often without sacrificing quality. But it takes constant effort to avoid the trap of my well-established comfort with doing things by hand. The people who are best positioned to build incredible things with AI do not have or do not fall into that comfortable habit of manual work. They often aren't expert engineers (yet) in the traditional sense, but in a new sense that's being worked out in realtime by all of us. Gaps in technical understanding are still there, but they're being filled extremely fast by some of the best technology for learning our species has ever created. It's hard for me to watch them and not see a rapidly approaching future where all this AI skepticism looks like self-soothing delusion from people who will struggle to adjust to the new techniques (and pace) of doing work with these tools.
- sharemywin 1y ago
  to me the biggest problem with AI is verifying the stuff it generates works before you build on top of it.
- queenkjuul 1y ago
  You're sure you don't spend more time validating the output than you would just doing it yourself? What do you consider the strengths you're leaning into?
athrowaway3z 1y ago
https://fortune.com/2025/08/06/data-center-artificial-intelligence-bubble-consumer-spending-economy/ https://fortune.com/2025/08/06/data-center-artificial-intell... I think what many people are missing is that everybody values AI companies as if they're special, when I'm seeing customers approach it as a commodity - once a task is done it's done. It has about as much lock-in as a brand of toilet paper, and the economics more like steel production than VPS' or social media. There are some qualitative differences, but none that seems to last for more than 6 months. On the flip side, the costs are energy & location. Scaling won't bring that down. In a twist of irony, big tech might structurally reduce their high profit margins because of AI. I'm bullish on AI, and competition is great for consumers in the end. But first the bubble has to pop, and it is going to hurt.
nine_k 1y ago
Gift link, as opposed to archive: https://www.theatlantic.com/economy/archive/2025/09/ai-bubble-us-economy/684128/?gift=Exty0c37iBapZfMrmNPU4qF7y8w_zuelzQ5F9wNXvmM https://www.theatlantic.com/economy/archive/2025/09/ai-bubbl... (@dang, why can't I link it under https://news.ycombinator.com/item?id=45161656 https://news.ycombinator.com/item?id=45161656 ?)
grg0 1y ago
This article presents the apparently widespread, but incorrect and, frankly, boring view that "coding" is the bottleneck in development. The following statement summarizes this view best: > Many knowledge-work tasks are harder to automate than coding, which benefits from huge amounts of training data and clear definitions of success. which implies that "coding" is not knowledge work. If "coding" is understood as the mere typing of requirements into executable code, then that simply is not a bottleneck and the gains to be had there are marginal (check out Amdahl's law). And if "coding" is to be understood as the more general endeavour of software development, then the people making these statements have no fucking idea what they're talking about and cannot be taken seriously.
- nine_k 1y ago
  It's a familiar approach. "We have a ton of tickets, each pretty simple, but not enough hands to devote to all of them." It usually turns out that the "pretty simple" bears a lot of weight there, and assumes more than meets the eye reading the ticket.
- sharemywin 1y ago
  so was the article conflating the two or was it just pointing out the software developer roles typically have many hats that can and sometimes are held by other in the process. ie. systems analyst, business analyst, architect, designer, PM, QA etc.
Apreche 1y ago
I believe it’s a bubble, and that it will burst, but I’m only a little worried about the market. Yeah, there could be a sell-off of tech, but the people who sold will reinvest elsewhere. Also, 401ks still exist. Every week people get paychecks and they automatically buy stocks, no matter what the market situation. The only thing that can bring that down is if less people have jobs with retirement plans. If AI busts there will be some amount of re-hiring somewhere to cover it. Could be scary for people with tech stocks, but less scary with index funds going long term.
- CommenterPerson 1y ago
  People with 401Ks can move money from stocks to bonds or money market accounts. Poof!
- goalieca 1y ago
  I think it may be good for jobs in the tech sector when it bursts. The 300B invested in hardware and data centers were not being invested in labourers like ourselves.
  - sharemywin 1y ago
    I think once Exec learn all the programmers they fired need to be rehired cause AI ain't going to replace them and the AI tools need to be integrated in with all the current tech.
jameslk 1y ago
The FAQ of the actual study contains a lot of useful info that addresses some of the comments here, for anyone curious: https://metr.org/blog/2025-07-10-early-2025-ai-experienced-os-dev-study/#:~:text=FAQ https://metr.org/blog/2025-07-10-early-2025-ai-experienced-o...
rsynnott 1y ago
> The entire U.S. economy is being propped up by the promise of productivity gains that seem very far from materializing. This feels like confusing the economy with the markets. Now, a market crash would cause economic fallout, but the markets are not the economy.

57 points by ForHackernews 1y ago

http://archive.today/anbRZ http://archive.today/anbRZ

> The entire U.S. economy is being propped up by the promise of productivity gains that seem very far from materializing. or, even worse perhaps the productivity gains will be high.

whatshisface 1y ago
I'm not sure if this point is essential or pedantic, but they're not claiming that the economy is being propped up, just stock prices.
- idontwantthis 1y ago
  They are claiming both. Business spending on AI is more than all consumer spending combined as a share of GDP. That’s propping up the whole economy.
  - kjkjadksj 1y ago
    I don’t think its doing so much propping up because the spend is being thrown into a couple of piles. When companies hire some ai superstar for millions it isn’t like much of that money is circulating in the wider economy like if you invested it into a diversified portfolio or hired a lot of lower wage people who spend a much higher share of their paycheck on stuff that keeps it circulating in local economies. Likewise if that spend is going to server racks or electricity. The money just doesn’t have a lot of avenues to spill out into different subsets of the economy. This is probably what is going on when we see McD executives say there are basically two economies in the US at the moment, one doing very well for itself and the other experiencing a lot of hardship.
    - CommenterPerson 1y ago
      We might have some reserve power generation capacity after the bubble.
  - WaltPurvis 1y ago
    >Business spending on AI is more than all consumer spending combined as a share of GDP. Your phrasing there is misleading. The article says, "In the first half of this year, business spending on AI added more to GDP growth than all consumer spending combined," and the key is the "added more to GDP growth" part. Growth in consumer spending was sluggish, while growth in business AI spending was insane, so in terms of how much the economy grew, the rise in AI spending exceeded the rise in consumer spending. Which is pretty amazing, actually. But, as far as the total amount of spending, business AI is at most only a few percentage points of GDP (and that's if you interpret "business AI spending" very broadly), while consumer spending is somewhere around 67-70% of GDP.
    - idontwantthis 1y ago
      Thanks I did misunderstand that.
- rr808 1y ago
  The post talks about how a lot of AI investment could just be a waste which would be bad for the economy and stocks. My comment is really a off-topic, its that if AI really does work well it'll put half of us out of work, leaving us to do non-knowledge work that the robots can't do yet.

dijit 1y ago

Is it even a question that we’re in a bubble? The effects of the technology would have to rival that of.. idk, soap and the locomotive combined? In order for us not to be in a bubble. It has swallowed nearly all discourse about technology and almost all development, nearly every single area of technology is showing markers of recession.. except AI, which has massively inflated salaries and valuations. I can’t even think of a scenario where we don’t look back on this as a bubble. What does the tech need to be able to do in order to cover its investment?

unyttigfjelltol 1y ago
> would have to rival that of.. idk, soap soap + water = bubble
vmg12 1y ago
> The effects of the technology would have to rival that of.. idk, soap and the locomotive combined? In order for us not to be in a bubble. Can you quantify this or are you going based on vibes? If I were to compare this to previous bubbles (ie crypto, dot com bubble), in valuation multiple terms we haven't gotten started. And a number of tech companies eventually grew into and surpassed their bubble valuations.
- dijit 1y ago
  Soap was essentially the onset of what we’d consider urban living, before soap (and even for a long time after to be fair) medical operations had a stupidly hi morbidity and city life was also quite.. unsurvivable. Soap itself may not have been an investment, but it unlocked a lot of capabilities for our civilisation. Almost impossible to quantify how much. Locomotives were something that had a definite upfront cost, unlike soap, and we invested so much money - up to 3% of GDP in some years in the 1800s.. but the economic benefits were ridiculous. Spending on AI data centers is so massive that it's taken a bigger chunk of GDP growth than shopping! (according to Yahoo!: https://consent.yahoo.com/v2/collectConsent?sessionId=3_cc-session_40758a6a-40ab-4d52-a982-dd689cd7d152 https://consent.yahoo.com/v2/collectConsent?sessionId=3_cc-s...) I mean, it’s really apples to oranges, but I can’t imagine us getting the returns anywhere close to what rail gave us in the 1800s.

jstummbillig 1y ago

Ah, this is such a silly non-issue at this point in time. As long as I have to wait ~10 minutes to get my agent to return code, we are ~10 minutes of compute per request away from a bubble. 10 minutes covers a lot of compute. Nothing we are building right this second will not instantly be eaten up by improving already existing use cases (code, image generation, video generation) for a very long time.

epa 1y ago
Grok fast..
- jstummbillig 1y ago
  ?
  - collingreen 1y ago
    Please wait, the ai is typing a response...

OtomotO 1y ago

Something can be useful and still be a bubble at the same time. AI is such a thing.

jstummbillig 1y ago
Care to explain?
- OtomotO 1y ago
  I mostly see two extreme positions: Either AI is a total fraud, completely useless (at least for programming), or it's deus ex machina. But reality has more than one bit to answer questions like "Is AI a hype?" Despite only recently becoming a father and feeling like I am in my prime, I've seen many hypes. And IT is an eternal cycle of hypes. Every few years a new holy cow is sent through the village to bring salvation to all of us and rid us of every problem (un)imaginable. To give a few examples: Client-Server SPAs Industry 4.0 Machine Learning Agile Blockchain Cloud Managed Languages To me LLMs are nice, though no revelation. I can use them fine to generate JS or Python code, because apparently the training sets were big enough, and they help me by writing boilerplate code I was gonna write anyway. When I try them to help me write Rust or Zig, they fall extremely short though. LLMs are extremely overhyped. They made a few people very rich by promising too much. They are not AI by any means but marketing. But they are a tool. And as such they should be treated. Use them when appropriate, but don't hail them...
  - jstummbillig 1y ago
    "Is it a hype?" is a different question, that's just not very interesting to me. Anything will be described as both hyped and good, depending on who you ask. You were previously talking about AI being a bubble and also useful For reference, wikipedia defines a bubble as: "a period when current asset prices greatly exceed their intrinsic valuation". I find that hard to reason about. One way to think about it is that all that AI does is create economic value, and for it to be useful it would have to create more economic value than it destroys. But that's hard to reason about without knowing the actual economics of the business, which the labs are not super transparent about. On the other hand I would imagine that all that infra building by all big players shows some level of confidence that we are way past "is it going to be useful enough?". That is not what reasonable people do when they think there's a bubble, at least that would be unprecedented. And that's why I was asking.

frankc 1y ago

I don't know exactly where AI is going to go, but the fact that I keep seeing this one study of programmer productivity, with like 16 people with limited experience with cursor,uncritically quoted over and over assures me that the anti-AI fervor is at least as big of a bubble as the AI bubble itself.

SpicyLemonZest 1y ago
Do you have some other, better study in mind that people should be talking about? My sense is that comparative data is scarce, because leaders who believe in AI tend to believe in it so strongly that they mandate adoption rather than collecting data from organic growth.
kjkjadksj 1y ago
To be fair when you look at most studies that are hemm and hawwed over in the press, they tend to look like that. Well controlled, high n, replicated in independent cohorts, the readership of mass market media doesn’t understand any of this nuance. The bar is merely whatever seems to validate an existing bias whatever the topic since the incentives are built around engagement and not scientific truth.
ath3nd 1y ago
> uncritically quoted over and over assures me that the anti-AI fervor is at least as big of a bubble as the AI bubble itself. Counterpoint: the AI fanboys and AI companies, with all their insane funding couldn't come up with a better study and bigger sample size, because LLMs simply don't help experienced developers. What follows is that the billion dollar companies just couldn't create a better study, either because they tried and didn't like the productivity numbers not being in their favor (very likely), or because they are that sloppy and vibey that they don't know how to make a proper study (I wouldn't be surprised, see ChatGPT's latest features: "study mode" which had a blog post! and you know that the level is not very high). Again, until there is a better study, the consensus is LLMs are 19% productivity drain for experienced developers, and if they help certain developers, then most likely those developers are not experienced. How's that for an interpretation?

asdev 1y ago

Rates need to be higher, we are clearly in stagflation outside of AI. Once AI hype cools the stock market will correct. But we need to suck out all of the excess cash, cool consumer demand, which in turn will force businesses to lower their prices to attract customers.

grg0 1y ago
I am not strictly sure why you are being downvoted, but raising interest rates does not get you out of the 'stag' in stagflation; it actually makes it worse. Cue EU governments circa 2008 for a recent example of where that kind of economic policy gets you.
- sharemywin 1y ago
  when your markets are hyper monopolized they can just produce less and jack prices up even more.

fishmicrowaver 1y ago

Yeah an exec asked me about the METR study, somewhat alarmed. I told him they were measuring productivity of open source developers. He didn't understand the implications. He was relieved when I informed him that he should still expect productivity gains because his devs were bad enough at their jobs to see a boost.

sharemywin 1y ago
I would see AI being a multiplying factor. and 3 * a negative number is 3 times worse.

Animats 1y ago

This is the trouble with AI as an "assistant". If it's good enough to do the job unattended, then there's a big increase in productivity. If it needs constant handholding, maybe not.

nine_k 1y ago
AI is not ready to be an "assistant". It can be used as a "tool" though. Far from self-driving, more like auto-parking and cruise control.
- deleted 1y ago
  [deleted]

Mallowram 1y ago

[dead]

reb 1y ago

It's a good thought exercise, but the opening hinges on a premise that feels obviously wrong: that experts in doing work by hand will do that work faster with AI. My experience is that, in many cases, people who are very good at doing something by hand are excellent at the process of doing that thing by hand, not generally excellent at doing that thing or talking about that thing or teaching others how to do that thing. And I've found it to be true (sometimes particularly true) for people who have done that thing for a long time, even if they're actively interested in finding new and better ways to do the work. Their skills are fine-tuned for a manual way of working. Working with AI feels very, very different from writing software by hand. When I let myself lean into AI's strengths, it allows me to move much faster and often without sacrificing quality. But it takes constant effort to avoid the trap of my well-established comfort with doing things by hand. The people who are best positioned to build incredible things with AI do not have or do not fall into that comfortable habit of manual work. They often aren't expert engineers (yet) in the traditional sense, but in a new sense that's being worked out in realtime by all of us. Gaps in technical understanding are still there, but they're being filled extremely fast by some of the best technology for learning our species has ever created. It's hard for me to watch them and not see a rapidly approaching future where all this AI skepticism looks like self-soothing delusion from people who will struggle to adjust to the new techniques (and pace) of doing work with these tools.

sharemywin 1y ago
to me the biggest problem with AI is verifying the stuff it generates works before you build on top of it.
queenkjuul 1y ago
You're sure you don't spend more time validating the output than you would just doing it yourself? What do you consider the strengths you're leaning into?

athrowaway3z 1y ago

https://fortune.com/2025/08/06/data-center-artificial-intelligence-bubble-consumer-spending-economy/ https://fortune.com/2025/08/06/data-center-artificial-intell... I think what many people are missing is that everybody values AI companies as if they're special, when I'm seeing customers approach it as a commodity - once a task is done it's done. It has about as much lock-in as a brand of toilet paper, and the economics more like steel production than VPS' or social media. There are some qualitative differences, but none that seems to last for more than 6 months. On the flip side, the costs are energy & location. Scaling won't bring that down. In a twist of irony, big tech might structurally reduce their high profit margins because of AI. I'm bullish on AI, and competition is great for consumers in the end. But first the bubble has to pop, and it is going to hurt.

nine_k 1y ago

Gift link, as opposed to archive: https://www.theatlantic.com/economy/archive/2025/09/ai-bubble-us-economy/684128/?gift=Exty0c37iBapZfMrmNPU4qF7y8w_zuelzQ5F9wNXvmM https://www.theatlantic.com/economy/archive/2025/09/ai-bubbl... (@dang, why can't I link it under https://news.ycombinator.com/item?id=45161656 https://news.ycombinator.com/item?id=45161656 ?)

grg0 1y ago

This article presents the apparently widespread, but incorrect and, frankly, boring view that "coding" is the bottleneck in development. The following statement summarizes this view best: > Many knowledge-work tasks are harder to automate than coding, which benefits from huge amounts of training data and clear definitions of success. which implies that "coding" is not knowledge work. If "coding" is understood as the mere typing of requirements into executable code, then that simply is not a bottleneck and the gains to be had there are marginal (check out Amdahl's law). And if "coding" is to be understood as the more general endeavour of software development, then the people making these statements have no fucking idea what they're talking about and cannot be taken seriously.

nine_k 1y ago
It's a familiar approach. "We have a ton of tickets, each pretty simple, but not enough hands to devote to all of them." It usually turns out that the "pretty simple" bears a lot of weight there, and assumes more than meets the eye reading the ticket.
sharemywin 1y ago
so was the article conflating the two or was it just pointing out the software developer roles typically have many hats that can and sometimes are held by other in the process. ie. systems analyst, business analyst, architect, designer, PM, QA etc.

Apreche 1y ago

I believe it’s a bubble, and that it will burst, but I’m only a little worried about the market. Yeah, there could be a sell-off of tech, but the people who sold will reinvest elsewhere. Also, 401ks still exist. Every week people get paychecks and they automatically buy stocks, no matter what the market situation. The only thing that can bring that down is if less people have jobs with retirement plans. If AI busts there will be some amount of re-hiring somewhere to cover it. Could be scary for people with tech stocks, but less scary with index funds going long term.

CommenterPerson 1y ago
People with 401Ks can move money from stocks to bonds or money market accounts. Poof!
goalieca 1y ago
I think it may be good for jobs in the tech sector when it bursts. The 300B invested in hardware and data centers were not being invested in labourers like ourselves.
- sharemywin 1y ago
  I think once Exec learn all the programmers they fired need to be rehired cause AI ain't going to replace them and the AI tools need to be integrated in with all the current tech.

jameslk 1y ago

The FAQ of the actual study contains a lot of useful info that addresses some of the comments here, for anyone curious: https://metr.org/blog/2025-07-10-early-2025-ai-experienced-os-dev-study/#:~:text=FAQ https://metr.org/blog/2025-07-10-early-2025-ai-experienced-o...

rsynnott 1y ago

> The entire U.S. economy is being propped up by the promise of productivity gains that seem very far from materializing. This feels like confusing the economy with the markets. Now, a market crash would cause economic fallout, but the markets are not the economy.