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IMO there seems to be more consensus among even the biggest hypemen that this is a bubble. But to protect their bag (and their LP money) they have to find some
by estearum 1y ago
IMO there seems to be more consensus among even the biggest hypemen that this is a bubble. But to protect their bag (and their LP money) they have to find some way that the silly investments they made weren't totally irresponsible.
So here's the line of thinking we'll see more of:
"Yes it's a bubble, but so were the railroads, and yet plenty of people made out big time! The railroads themselves were left over and hugely valuable!"
Then the slightly more astute observer would say, well hold on, that's not quite analogous because the depreciation on AI buildout is way faster than in railroads.
Then the even more astute observer would say, even that downplays the stupidity: the actual value creation from railroads was in the land itself.
There is no analogous dynamic in AI-land, and so will probably be far more broadly catastrophic to the bubble blowers.
- skydhash 1y agoAlso railroads were deprecated because of the advantages of other transports, like the flexibility of cars and trucks, and the speed of planes. So not a bubble that pops up, just something that got replaced, like CRTs by led panels or fax by email.
- estearum 1y agoRailroads are not deprecated. Huge amounts of freight moves by rail in the US still. There definitely was a speculative bubble, but it left behind a lot of real value, but that real value was not in the railroad business nor in the railroads themselves but the gigantic amount of land grants and development that supported the bubble.
- skydhash 1y agoDepreciation is the wrong word (not a native speaker). I meant moved into the background and not that much in the general public eyes (like oil drills and weather stations).
- deleted 1y ago[deleted]
- binary132 1y agoFor what it’s worth, depreciation and deprecation mean very different things. :)
- SantalBlush 1y agoI think this bubble makes sense. Any investor who believes AI is the future--that is, that AI will disrupt entire industries and replace labor in quite a few ways--must have a slice of the AI pie. They know full well that most of their AI investments will go bust, but that doesn't matter as long as they have a significant piece of one of the few companies left standing when the bubble bursts. So they take shots at anything that looks like it could be one of those survivors. When it all pops, they will have some of the winners and they will write off the losers.
- throwaway31131 1y agoMaybe not a railroad but I imagine the data centers won't be worth nothing... I imagine the AI bubble bust will be like the .com bubble bust. Of the 20 (or whatever number) of companies that have a shot, something like 3 will survive and do well. The problem is we don't know which 3. Many, many, dot-com era companies died during the .com bubble and tons of money was lost, but not everything. For example: Amazon.com, eBay.com, Intuit, etc.
- estearum 1y agoThe data centers will depreciate in value way faster than railroads do, and infinitely faster than the land underneath the railroads do. The AI boom is way way way bigger than dotcom was.