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Fears over AI bubble bursting grow in Silicon Valley
- cratermoon 1y agohttps://fortune.com/2025/10/07/data-centers-gdp-growth-zero-first-half-2025-jason-furman-harvard-economist/ https://fortune.com/2025/10/07/data-centers-gdp-growth-zero-...
- ChrisArchitect 1y agoArticle is just a collection of links to individual stories already in discussion around here: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI https://news.ycombinator.com/item?id=45516265 https://news.ycombinator.com/item?id=45516265 OpenAI, Nvidia fuel $1T AI market with web of circular deals https://news.ycombinator.com/item?id=45521629 https://news.ycombinator.com/item?id=45521629 AMD signs AI chip-supply deal with OpenAI, gives it option to take a 10% stake https://news.ycombinator.com/item?id=45490549 https://news.ycombinator.com/item?id=45490549 Without data centers, GDP growth was 0.1% in the first half of 2025 https://news.ycombinator.com/item?id=45512317 https://news.ycombinator.com/item?id=45512317
- neilv 1y ago> However, at the Stanford Graduate School of Business, which has minted its fair share of tech entrepreneurs, Prof [...] says [..something innocuous about whether there's an AI bubble...] If there were a bubble right now, would it be suicide for a professor at the Stanford business school to be quoted by a reporter saying that?
- chii 1y agoit wouldn't be suicide at all. There's no penalty for anyone calling out what might seem like a bubble. If it turns out to be an actual bubble, they can claim to be prophetic visionaries. If it turns out it's not a bubble, nobody bats an eye.
- neilv 1y agoNo disfavor (on campus, nor with investors and other connections) for peeing on everyone's party?
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- ptero 1y agoI bet that is correct. And not just for academics, it should be OK for an AWS employee to call AI investments a bubble or worse. As long as he clearly states that it is only his personal opinion.
- doctoboggan 1y agoHe didn't make a statement about whether there is an AI bubble, he just said we wouldn't know if we were in one: > "It is very hard to time a bubble," Prof Admati told me. "And you can't say with certainty you were in one until after the bubble has burst." This statement is very true. Even if we are in a bubble you should not make the mistake of trying to time it properly. For example, look at Nvidia during the last cryptocurrency hype cycle. If you predicted that was a bubble and tried shorting their stock, you would have lost since it didn't drop at all at they successfully jumped from crypto to AI and continued their rise. I am not saying crypto wasn't a bubble, and I am not saying AI isn't a bubble; I am saying it would be a mistake to try to time it. Just VT and chill.
- neilv 1y agoHe gave an innocuous response. Which prompted the question of whether there would be strong disincentive for any Stanford business school professor to give a non-innocuous response that would be a wet blanket on the AI ambitions surrounding them.
- Ekaros 1y agoNot if they are not only ones doing it. And at the current moment there is enough consensus that valuations are high. And even that they look bubbleish... In this sort of environment you can basically freely say as such. I think there would be lot more pushback if you said that this will go to 10x or 100x or 10000x in a few years... That might be suicide...
- StarterPro 1y agoAI by and large has done nothing but make our environment worse. People literally outsource thinking to it. People have killed themselves because there were no stopgaps in the communication aspect. Rural towns are getting overly fucked by water and electricity usage, adding in the fumes produced. All of this for what, so we can make a video of Michael Jackson high-fiving Ghandi? The implementation was haphazard and some could say felonious, but altm*n is richer than 99% of us, and would never actually see the inside of a courtroom.
- parpfish 1y agoany time i ask chatgpt a question and get a useful answer, i stop and remind myself that we had that exact same functionality 15 years ago. it was called "google without ads and seo spam".
- taytus 1y agoSEO killed the web
- coolestguy 1y ago>it was called "google without ads and seo spam" ... if you could talk to it like a human and have google search hold a conversation with you - sure. That distinction is a big big big difference though
- greesil 1y ago
- 827a 1y agoIdk. OpenAI has 800M weekly active users, which puts it in the top, like, four most used software systems in the west. They also just stated that they're emitting 6B API tokens per minute, which depending on the model puts their annualized API revenue between $1B-$31B. They have as many active eyeballs as a typical Meta property, and Meta's annualized revenue is ~$150B; but OAI hasn't monetized them yet. They will. And they have API revenue, and they have further advancements in white collar automation tooling, and they have, well, AGImaybe. Its also super clear that this is a technology that most of Big Tech totally missed and seems unable to catch up on (Apple, Amazon, Microsoft; Google is doing fine). There's a seriously possible Microsoft-vs-IBM-v2 play possible in the next couple years. I'm a cynic, but I'm not convinced this is a bubble in the traditional sense. I'd argue that its startlingly asinine to point at a product that went from nothing to being used by 10% of the planetary population in two years, accidentally, like they internally thought it was a stupid idea and still think its a stupid idea, and say "nah they got nothing".
- typpilol 1y agoEspecially when you see Bitcoin and how their adoption rate is Crypto was / is a true bubble Lots of paper value but hardly any adoption
- beeflet 1y agoBitcoin's adoption rate was hampered by the block size wars in 2017 when companies started dropping it as a payment method. So I don't think its adoption rate is a good model of anything because it is so affected by bitcoin's technical features and politics of development.
- tim333 1y agoI use crypto for speculation/gambling. It may not be a noble use but the market for that is huge. Las Vegas and Wall Street have been around for a while. Some iffy figures are maybe 560 million holders globally and about 28% of Americans including of course the president and family. Trading volume in the last 24 hours was $1.37tn which is a lot for something with hardly any adoption. The Bitcoin bubble of course crashed in 2013 from $1k, 2018 from $19k, 2021 from $65k and has just fallen to $111k and will probably crash further.
- kwamenum86 1y agoFastest and most drastic technological transformation of all time: https://www.bondcap.com/report/pdf/Trends_Artificial_Intelligence.pdf https://www.bondcap.com/report/pdf/Trends_Artificial_Intelli... So nah.
- trial3 1y agoi don’t have a perfectly coiffed investment firm’s 300-slide deck for “agriculture” but if we’re talking drastic may i humbly submit that for your consideration
- culll_kuprey 1y agoThis is why AI bros can’t be taken seriously. Their slop generator above the foundation of human societies.
- array_key_first 1y agoOr the internet. Or telephony. Or even fucking fax.
- bix6 1y agoThat’s a big deck what’s the point here? It’s not a bubble because it’s fast and drastic?
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- stingraycharles 1y agoI’d argue that the introduction of the Internet and mobile phones were more drastically technological transformations.
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- kwamenum86 1y ago
- sjs382 1y agoEven if it's just better for some things people use search for, that's very valuable. People are spending real money on the product, it's not just the companies spending on infrastructure.
- beeflet 1y agoAre they spending enough money on the product for these companies to be profitable, after R&D costs are factored?
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- random9749832 1y agoFor most people it is just a search engine that allows them to avoid webpages that have turned hostile. The second biggest users are probably students who want their homework done for them. So yes there is a market but that doesn't match the level of investment. A bubble doesn't mean the product is useless.
- thunky 1y ago> For most people it is just a search engine that allows them to avoid webpages that have turned hostile If this is true it means there is a ton of growth available once people understand that it's much more than this.
- random9749832 1y agoThe vague snarky response is very telling. Some of you clearly have a personal stake at this but if I was you I would start selling those Nvidia stocks.
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- throwacct 1y agoI mean, it's a bubble. The question is, who's going to lose more money, and who's going to recoup at least some of the investments back before the music stops.
- Nevermark 1y agoGiven the enormous number of people paying for AI subscriptions/services, it is very clear the AI market as a whole isn't a bubble. But given the amount of change, and competition, it is just as obvious that there will be many sub-market bubbles, of varying size, with unpredictable thresholds, timing and resolution. And large companies, tech and non-tech (they all depend on information tech), will burn fortunes defensively. Which, if understood as a hedge isn't a bubble. -- For now, real demand for higher quality AI is insane. What will be interesting will be the dynamics as it passes the "average" person. (That will appear to happen at different times to different people, because these models are not ever going to be "just like us".) I can imagine AI getting smarter fast enough to overshoot contemporary needs or ability to leverage. Needs and new leverage adoption are limited in rate of change by legal, political, social, economic, and adjacent/supporting tech adaptation rates. Any overshoot would completely commodify AI for as long as it took for use to catch up with potential. That would resulting a temporary but still market-wide AI bubble burst. When nobody (or only a small minority) needs the best AI, and open source and low margin models will clean the clocks of high investment burning overshooters. It is easy to underestimate how many small, unimportant, irrelevant, independent and easy adaptations that a new tech needs to deliver very different kinds of value, that are actually huge, important, inherent and non-obvious adaptations. An analogy: Give a bright adaptable 10x (relative return/time vs. the norm) developer a billion dollars. See how long it takes them to re-orient themselves to their new scale and challenges, and get even 2x the returns on their new wealth relative to the norm. They may do much worse than 1x. Achieving superintelligence "too fast" would have a similar effect. It will take almost every actor more time to adjust than we think. And many capable and historically successful enterprises, including some at the forefront of AI, will die of adaptation-overload shock. From that viewpoint, OpenAI looks like they are doing the right things. Because they are going as vertical as they can, they will be confronting new-value-proposition frictions much earlier than others might. That is a very wise move given all the uncertainties. (Besides the obvious motivation of wanting it all.)
- surgical_fire 1y ago> Given the enormous number of people paying for AI subscriptions/services, it is very clear the AI market as a whole isn't a bubble. You speak very factually of this. What is this enormous number of people? What's the source of those numbers?
- ath3nd 1y ago[dead]
- 1vuio0pswjnm7 1y ago""When [the bubble] breaks, it's going to be really bad, and not just for people in AI," he said. "It's going to drag down the rest of the economy.""
- r_lee 1y agoDon't worry guys, it's not a bubble, it really feels like AGI is around the corner, and a new technology: CGOT; Chain of Graph of thoughts, we recursively think 10x and it's like it can make a platform error hello world game in Javascript guys it's gonna replace EVERYONE!
- senko 1y agoI know we are not supposed to comment on the quality of comments but how on Earth is this Reddit-level comment on the top? HN was supposed to be above low-effort knee-jerk reactions such as this one.