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AI's Dial-Up Era

• 23434dsf 11mo ago
  HN is struggling to understand
  • roommin 11mo ago
    Enlighten us.
• arcticbull 11mo ago
  People tend to equate this to the railroad boom when saying that infrastructure spending will yield durable returns into the future no matter what. When the railroad bubble popped we had railroads. Metal and sticks, and probably more importantly, rights-of-way. If this is a bubble, and it pops, basically all the money will have been spent on Nvidia GPUs that depreciate to 0 over 4 years. All this GPU spending will need to be done again, every 4 years. Hopefully we at least get some nuclear power plants out of this.
  • ares623 11mo ago
    The recycling industry will boom. From what demand you ask? We'll find out soon enough.
  • troupo 11mo ago
    The boom might not last long enough for western countries to pull heads out of their collective asses and ramp up production of nuclear plants. It takes China 5 years now, but they've been ramping up for more than 20 years.
  • simonw 11mo ago
    Yeah, the short-lived GPU deprecation cycle does feel very relevant here. I'm still a fan of the railroad comparisons though for a few additional reasons: 1. The environmental impact of the railroad buildout was almost incomprehensibly large (though back in the 1800s people weren't really thinking about that at all.) 2. A lot of people lost their shirts investing in railroads! There were several bubbly crashes. A huge amount of money was thrown away. 3. There was plenty of wasted effort too. It was common for competing railroads to build out rails that served the same route within miles of each other. One of them might go bust and that infrastructure would be wasted.
  • robinhoode 11mo ago
    Railroads need repair too? Not sure if it's every 4 years. Also, the trains I take to/from work are super slow because there is no money to upgrade. I think we may not upgrade every 4 years, but instead upgrade when the AI models are not meeting our needs AND we have the funding & political will to do the upgrade. Perhaps the singularity is just a sigmoid with the top of the curve being the level of capex the economy can withstand.
    • arcticbull 11mo ago
      For what it's worth they cost a lot less than highways to maintain. Something like the 101 in the Bay Area costs about $40,000 per lane-mile per year, or about $240,000. Trains are closer to $50-100,000 per mile per year. If there's no money for the work it's a prioritization decision.
  • rhubarbtree 11mo ago
    What percentage of data centre build costs are the GPUs vs power stations, water cooling plants, buildings, roads, network, racks, batteries, power systems, etc
  • schwarzrules 11mo ago
    >> basically all the money will have been spent on Nvidia GPUs that depreciate to 0 over 4 years I agree the depreciation schedule always seems like a real risk to the whole financial assumptions these companies/investors make, but a question I've wondered: - Will there be an unexpected opportunity when all these "useless" GPUs are put out to pasture? It just seems like saying a factory will be useless because nobody wants to buy an IBM mainframe, but an innovative company can repurpose a non-zero part of that infrastructure for another use case.
  • paxys 11mo ago
    There's a lot more to infrastructure spending than GPUs. Companies are building data centers, cooling systems, power plants (including nuclear), laying cables under oceans, launching satellites. Bubble or not, all of this will continue to be useful for decades in the future. Heck if nothing else all the new capacity being created today may translate to ~zero cost storage, CPU/GPU compute and networking available to startups in the future if the bubble bursts, and that itself may lead to a new software revolution. Just think of how many good ideas are held back today because deploying them at scale is too expensive.
    • bryanlarsen 11mo ago
      > including nuclear Note that these are just power purchase agreements. It's not nothing, but it's a long ways away from building nuclear.
  • amluto 11mo ago
    A bunch of the money is being spent on data centers and their associated cooling and power systems and on the power plants and infrastructure. Those should have much longer depreciation schedules.
  • FridgeSeal 11mo ago
    Imagine the progress we could have made on climate change if this money had been funneled into that, instead of making some GPU manufacturers obscenely wealthy.
    • deleted 11mo ago
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    • bbddg 11mo ago
      Yeah it’s infuriating to think about.
    • leptons 11mo ago
      Throwing away the future for "AI" slop.
  • fjdjcjejdjfje 11mo ago
    This is precisely why the AI bubble is so much worse than previous bubbles: the main capital asset that the bubble is acquiring is going to depreciate before the bubble's participants can ever turn a profit. Regardless of what AI's future capabilities are going to be, it's physically impossible for any of these companies to become profitable before the GPUs that they have already purchased are either obsolete or burnt out from running under heavy load.
  • vjvjvjvjghv 11mo ago
    I think the hardware infrastructure may be obsolete but at the moment we are still just beginning to figure out how to use AI. So the knowledge will be the important thing that’s left after the bubble. The current infrastructure will probably be as obsolete as dial up infrastructure.
• runarberg 11mo ago
  The vast majority of the dot-com comparison that I personally see are economic, not technological. People (or at least the ones I see) are claiming that the bubble mechanics of e.g. circular trading and over-investments are similar to the dot-com bubble, not that the AI technology is somehow similar the internet (it obviously isn’t). And to that extent we are in the year 1999 not 1995. When this article are claiming both sides of the debate, I believe only one of them are real (the ones hyping up the technology). While there are people like me who are pessimistic about the technology, we are not in any position of power, and our opinion on the matter is basically a side noise. I think a much more common (among people with any say in the future of this technology) is the believe that this technology is not yet at a point which warrants all this investment. There were people who said that about the internet in 1999, and they were proven 100% correct in the months that followed.
  • vjvjvjvjghv 11mo ago
    Agreed. It would probably be better to keep improving AI before investing that much into infrastructure.
• mjr00 11mo ago
  While I mostly agree with the article's premise (that AI will cause more software development to happen, not less) I disagree with two parts: 1. the opening premise comparing AI to dial-up internet; basically everyone knew the internet would be revolutionary long before 1995. Being able to talk to people halfway across the world on a BBS? Sending a message to your family on the other side of the country and them receiving it instantly? Yeah, it was pretty obvious this was transformative. The Krugman quote is an extreme, notable outlier, and it gets thrown out around literally every new technology, from blockchain to VR headsets to 3DTVs, so just like, don't use it please. 2. the closing thesis of > Consider the restaurant owner from earlier who uses AI to create custom inventory software that is useful only for them. They won’t call themselves a software engineer. The idea that restaurant owners will be writing inventory software might make sense if the only challenge of creating custom inventory software, or any custom software, was writing the code... but it isn't. Software projects don't fail because people didn't write enough code.
  • deleted 11mo ago
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  • solomonb 11mo ago
    Before I got my first full time software engineering gig (I had worked part time briefly years prior) I was working full time as a carpenter. We were paying for an expensive online work order system. Having some previous experience writing software for music in college and a couple /brief/ LAMP stack freelance jobs after college I decided to try to write my own work order system. It took me like a month and it would never have never scaled, was really ugly, and had the absolute minimum number of features. I could never had accepted money from someone to use it but it did what we needed and we ran with it for several years after that. I was only able to do this because I had some prior programming experience but I would imagine that if AI coding tools get a bit better they would enable a larger cohort of people to build a personal tool like I did.
  • Kiro 11mo ago
    I don't think his quote is that extreme and it was definitely not obvious to most people. A common thing you heard even around 95 was "I've tried internet but it was nothing special".
• bena 11mo ago
  “But the fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses. They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown.” Because some notable people dismissed things that wound up having profound effect on the world, it does not mean that everything dismissed will have a profound effect. We could just as easily be "peak Laserdisc" as "dial-up internet".
  • deleted 11mo ago
    [deleted]
  • rainsford 11mo ago
    I was happy to come into this thread and see I was not the first person for whom that quote came to mind. The dial-up Internet comparison implicitly argues for a particular outcome of current AI as a technology, but doesn't actually support that argument. There's another presumably unintended aspect of the comparison that seems worth considering. The Internet in 2025 is certainly vastly more successful and impactful than the Internet in the mid-90s. But dial-up itself as a technology for accessing the Internet was as much of a dead-end as Laserdisc was for watching movies at home. Whether or not AI has a similar trajectory as the Internet is separate from the question of whether the current implementation has an actual future. It seems reasonable to me that in the future we're enjoying the benefits of AI while laughing thinking back to the 2025 approach of just throwing more GPUs at the problem in the same way we look back now and get a chuckle out of the idea of "shotgun modems" as the future.
• bigwheels 11mo ago
  > Benchmark today’s AI boom using five gauges: > 1. Economic strain (investment as a share of GDP) > 2. Industry strain (capex to revenue ratios) > 3. Revenue growth trajectories (doubling time) > 4. Valuation heat (price-to-earnings multiples) > 5. Funding quality (the resilience of capital sources) > His analysis shows that AI remains in a demand-led boom rather than a bubble, but if two of the five gauges head into red, we will be in bubble territory. This seems like a more quantitative approach than most of "the sky is falling", "bubble time!", "circular money!" etc analyses commonly found on HN and in the news. Are there other worthwhile macro-economic indicators to look at? It's fascinating how challenging it is meaningfully compare current recent events to prior economic cycles such as the y2k tech bubble. It seems like it should be easy but AFAICT it barely even rhymes.
  • rhubarbtree 11mo ago
    Yep. Stockmarket capitalisation as a percentage of GDP AKA the Buffett indicator. https://www.longtermtrends.net/market-cap-to-gdp-the-buffett-indicator/ https://www.longtermtrends.net/market-cap-to-gdp-the-buffett... Good luck, folks.
    • cb321 11mo ago
      Besides your chart, another point along these lines is that the article cites Azhar claiming multiples are not in bubble territory while also mentioning Murati getting essentially infinite price multiple. Hmmmm...
    • rybosworld 11mo ago
      How valuable is this metric considering that the biggest companies now draw a significant % of revenue from outside the U.S.? I'm sure there are other factors that make this metric not great for comparisons with other time periods, e.g.: - rates - accounting differences
      • rhubarbtree 11mo ago
        I estimate you’re talking 25% from overseas. If that bothers you, just multiply valuations by .75 Doesn’t make much difference even without doing the same adjust for previous eras. Buffett indicator survives this argument. He’s a smart guy.
• dude250711 11mo ago
  > Consider the restaurant owner from earlier who uses AI to create custom inventory software that is useful only for them. That is the real dial-up thinking. Couldn't AI like be their custom inventory software? Codex and Claud Code should not even exist.
  • morkalork 11mo ago
    "That side of prime rib is totally in the walk-in, just keep looking. Trust me, bro"
  • ToucanLoucan 11mo ago
    > Couldn't AI like be their custom inventory software? Absolutely not. It's inherently a software with a non-zero amount of probability in every operation. You'd have a similar experience asking an intern to remember your inventory. Like I enjoy Copilot as a research tool right but at the same time, ANYTHING that involves delving into our chat history is often wrong. I own three vehicles, for example, and it cannot for it's very life remember the year, make and model of them. Like they're there, but they're constantly getting switched around in the buffer. And once I started positing questions about friend's vehicles that only got worse.
    • dude250711 11mo ago
      But you should be able to say "remember this well" and AI would know it needs a reliable database instead of relying on its LLM cache or whatever. Could it not just spin up Postgres in some Codex Cloud like a human developer would? Not today but in a few years?
      • handfuloflight 11mo ago
        It can do that today. I am doing that today.
      • ToucanLoucan 11mo ago
        Why do I need to tell an AI to remember things?! How does AI consistently feel less intelligent than regular old boring software?!
• dg0 11mo ago
  Nice article, but somewhat overstates how bad 1995 was meant to be. A single image generally took nothing like a minute. Most people had moved to 28.8K modems that would deliver an acceptable large image in 10-20 seconds. Mind you, the full-screen resolution was typically 800x600 and color was an 8-bit palette… so much less data to move. Moreover, thanks to “progressive jpeg”, you got to see the full picture in blocky form within a second or two. And of course, with pages was less busy and tracking cookies still a thing of the future, you could get enough of a news site up to start reading in less time that it can take today. One final irk is that it’s little overdone to claim that “For the first time in history, you can exchange letters with someone across the world in seconds”. Telex had been around for decades, and faxes, taking 10-20 seconds per page were already commonplace.
• saltysalt 11mo ago
  Not sure the dial-up analogy fits, instead I tend to think we are in the mainframe period of AI, with large centralised computing models that are so big and expensive to host, only a few corporations can afford to do so. We rent a computing timeshare from them (tokens = punch cards). I look forward to the "personal computing" period, with small models distributed everywhere...
  • sixtyj 11mo ago
    Dial-up + mainframe. Mainframe from POV as silos, dial-up internet as the speed we have now when looking back to 2025 in 2035.
  • runarberg 11mo ago
    I actually think we are much closer to the sneaker era of shoes, or the monorail era of public transit.
  • onlyrealcuzzo 11mo ago
    Don't we already have small models highly distributed?
    • saltysalt 11mo ago
      We do, but the vast majority of users interact with centralised models from Open AI, Google Gemini, Grok...
      • onlyrealcuzzo 11mo ago
        I'm not sure we can look forward to self-hosted models ever being mainstream. Like 50% of internet users are already interacting with one of these daily. You usually only change your habit when something is substantially better. I don't know how free versions are going to be smaller, run on commodity hardware, take up trivial space and ram etc, AND be substantially better
        • saltysalt 11mo ago
• wewewedxfgdf 11mo ago
  Most of the big services seem to waste so much time clunking through updating and editing files. I'm no expert but I can't help feeling there's lots of things they could be doing vastly better in this regard - presumably there is lots to do and they will get around to it.
• righthand 11mo ago
  More like AI’s Diaper-Up Era aka AI’s Analogy Era to Mask It’s Shortcomings
• indigodaddy 11mo ago
  Funny how this guy thinks he knows exactly what's up with AI, and how "others" are "partly right and wrong." Takes a bit of hubris to be so confident. I certainly don't have the hubris to think I know exactly how it's all going to go down.
  • fragmede 11mo ago
    But do you have the audacity to be wrong?
    • indigodaddy 11mo ago
      Yeah that's interesting, good perspective
  • confirmmesenpai 11mo ago
    takes a lot of hubris to be sure it's a bubble too.
    • hitarpetar 11mo ago
      that's why I always identify the central position of any argument and take it. that way noone can accuse me of hubris
      • yunnpp 11mo ago
        Spoken like a wise man.
      • JohnnyMarcone 11mo ago
        You can take a position without being sure about it. e.g. "I'm at 70% that AI is a bubble."
        • hitarpetar 11mo ago
          id probably go with 50% actually
• sailfast 11mo ago
  I recall the unit economics making sense for all these other industries and bubbles (short of maybe tulips, which you could plant…) . Sure there were over-valuation bubbles because of speculatory demand, but right now the assumption seems to be “first to AGI wins” but that… may not happen. The key variable for me in this house of cards is how long folks will wait before they need to see their money again, and whether these companies will go in the right direction long enough given these valuations to get to AGI. Not guaranteed and in the meantime society will need to play ball (also not a guarantee)
• kaoD 11mo ago
  > If you told someone in 1995 that within 25 years [...] most people would find that hard to believe. That's not how I remember it (but I was just a kid so I might be misremembering?) As I remember (and what I gather from media from the era) late 80s/early 90s were hyper optimistic about tech. So much so that I distinctly remember a ¿german? TV show when I was a kid where they had what amounts to modern smartphones, and we all assumed that was right around the corner. If anything, it took too damn long. Were adults outside my household not as optimistic about tech progress?
  • michaelbuckbee 11mo ago
    To your point, AT&T's "You Will" commercials started airing in 1993 and present both an optimistic and fairly accurate view of what the future would look like. https://www.youtube.com/watch?v=RvZ-667CEdo https://www.youtube.com/watch?v=RvZ-667CEdo
    • deleted 11mo ago
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    • iyn 11mo ago
      I didn't know about these ads, thanks for sharing! Can't imagine how people reacted to that when they aired — the things they described sound so "normal" today, I wonder if it was seen as far fetched, crazy or actually expected.
      • EA 11mo ago
        In these commercials, it wasn't the technology itself but the ease of access and visualized integration of these technologies into the commoners' everyday lives that was the new idea.
      • skywhopper 11mo ago
        I was in my late teens at the time. My memory is that I felt like the tech was definitely going happen in some form, but I rolled my eyes heavily at the idea that AT&T was going to be the company to do make it happen. If you’re unfamiliar, the phone connectivity situation in the 80s and 90s was messy and piecemeal. AT&T had been broken up in 1982 (see https://www.historyfactory.com/insights/this-month-in-business-history-bell-system/ https://www.historyfactory.com/insights/this-month-in-busine...), and most people had a local phone provider and AT&T was the default long-distance provider. MCI and Sprint were becoming real competition for AT&T at the time of these commercials. Anyway, in 1993 AT&T was still the crusty old monopoly on most people’s minds, and the idea that they were going to be the company to bring any of these ideas to the market was laughable. So the commercials were basically an image play. The only thing most people bought from AT&T was long distance service, and the main threat was customers leaving for MCI and Sprint. The ads memorable for sure, but I don’t think they blew anyone’s mind or made anyone stay with AT&T.
• bitwize 11mo ago
  Recently, in my city, the garbage trucks started to come equipped with a device I call "The Claw" (think Toy Story). The truck drives to your curb where your bin is waiting, and then The Claw extends, grasps the bin, lifts it into the air and empties the contents into the truck before setting it down again. The Claw allows a garbage truck to be crewed by one man where it would have needed two or three before, and to collect garbage much faster than when the bins were emptied by hand. We don't know what the economics of such automation of (physical) garbage collection portend in the long term, but what we do know is that sanitation workers are being put out of work. "Just upskill," you might say, but until Claw-equipped trucks started appearing on the streets there was no need to upskill, and now that they're here the displaced sanitation workers may be in jeopardy of being unable to afford to feed their families, let alone find and train in some new marketable skill. So no, we're in the The Claw era of AI, when business finds a new way to funge labor with capital, devaluing certain kinds of labor to zero with no way out for those who traded in such labor. The long-term implications of this development are unclear, but the short-term ones are: more money for the owner class, and some people are out on their ass without a safety net because this is Goddamn America and we don't brook that sort of commie nonsense here.
  • sjsdaiuasgdia 11mo ago
    FYI, this kind of garbage truck has been around for >50 years [0], so any wide-scale impact on employment from this technology has likely already settled out. The waste collection companies in my area don't use them because it's rural and the bins aren't standardized. The side loaders don't work for all use cases of garbage trucks. [0] https://en.wikipedia.org/wiki/Garbage_truck https://en.wikipedia.org/wiki/Garbage_truck >In 1969, the city of Scottsdale, Arizona introduced the world's first automated side loader. The new truck could collect 300 gallon containers in 30 second cycles, without the driver exiting the cab
• yapyap 11mo ago
  Big bias shining through in comparing AI to the internet. Because we all know how essential the internet is nowadays.
• slackr 11mo ago
  There’s a big difference between the fibre infrastructure left by the dotcom crash, and the GPUs that AI firms will leave behind.
• slackr 11mo ago
  There’s a big difference between the fibre infrastructure left by the dotcom crash, and the GPUs that AI firms will leave behind
• gnarlouse 11mo ago
  I feel like this article is too cute. The internet, and the state of the art of computing in general has been driven by one thing and one thing alone: Moore’s Law. In that very real sense, it means that the semiconductor and perhaps more generally even just TSMC is responsible for the rise of the internet and the success of it. We’re at the end of Moore’s Law, it’s pretty reasonable to assume. 3nm M5 chips means there are—what—a few hundred silicon atoms per transistor? We’re an order of magnitude away from .2 nm which is the diameter of a single silicon atom. My point is, 30 years have passed since dial up. That’s a lot of time to have exponentially increasing returns. There’s a lot of implicit assumption that “it’s just possible” to have a Moore’s Law for the very concept of intelligence. I think that’s kinda silly.
  • leptons 11mo ago
    Moore's law has very little to do with the physical size of a single transistor. It postulates that the speed and capability of computers will double every few years. Miniaturization is one way to get that increase, but there are other ways. >The internet, and the state of the art of computing in general has been driven by one thing and one thing alone: Moore’s Law. You're wrong here... the one thing driving the internet and start of the art computing is money. Period. It wouldn't matter if Moore never existed, and his law was never a thing, money would still be driving technology to improve.
    • gnarlouse 11mo ago
      > The one thing driving the internet and state of the art computing is money You're kind of separating yin from yang and pretending that one begot the other. The reason so much money flooded into chip fab was because compute is one of the few technologies (the only technology?) with recursive self improvement properties. Smaller chip fab leads to more compute, which enabled smaller chip fabs though research modeling. Sure: and it's all because humans want to do business faster. But TSMC literally made chips the business and proved out the pure play foundry business model. > Even if Moore's Law was never a thing Then arguably in that universe, we would have eventually hit a ceiling, which is precisely the point I'm trying to make against the article: it's a little silly to assume there's an infinite frontier of exponential improvement available just because that was the prior trend. > Moore's Law has very little to do with the physical size of a single transistor I mean it has everything to do with the physical size of a single transistor, precisely because of that recursive self improvement phenomenon. In a universe where moore's law doesn't exist, in 2025 we wouldn't be on 3nm production dies, and compute scale would have capped off decades ago. Or perhaps even a lot of other weird physical things would probably be different, like maybe macroscopic quantum phenomena or just an entire universe that is one sentient blob made from the chemical composition of cheeto dust.
• ares623 11mo ago
  My head canon is that the thing that preemptively pops the bubble is Apple coming out and saying, very publicly, that AI is a dead end, and they are dropping it completely (no more half assed implicit promises). And not just that, they come out with an iPhone that has _no_ camera as an attempt to really distance themselves from all the negative press tech (software and internet in particular) has at the moment.
  • ladberg 11mo ago
    Do you know a single person who'd buy an iPhone without a camera? I don't
    • GalaxyNova 11mo ago
      That's what they used to say about mobile phones with no keyboards :))
      • l9o 11mo ago
        Keyboards were replaced with a touch screen alternative that effectively does the same job though. What is the alternative to a camera? Cameras are way too useful on a mobile device for anyone to even consider dropping them IMO.
        • xwolfi 11mo ago
          He's obviously jesting
          • l9o 11mo ago
            Oh. Woooosh. Thanks for still being nice about it (-:
        • efskap 11mo ago
          AI image generators
    • 11mo ago
• idiotsecant 11mo ago
  I would go so far as to say we are still in the computing dial-up era. We're at the tail end, maybe - we don't write machine code any longe, mostly, and we've abstracted up a few levels but we're still writing code. Eventually computing is something that will be everywhere, like air, and natural language interfaces will be nearly exclusively how people interact with computing machines. I don't think the idea of 'writing software' is something that will stick around, I think we're in a very weird and very brief little epoch where that is a thing.
• nickphx 11mo ago
  Dial-up was actually useful though.
• byronic 11mo ago
  how much does the correction here hew to making an AI model just look like standardized API calls with predictable responses? If you took away all the costs (data centers, water consumption, money, etc) I still wouldn't use an LLM as a first choice because it's wrong enough of the time to make it useless -- I have to verify everything it says, which is how I would have approached a task in the first place. If we put that analogy into manufacturing, it's "I have to QA everything off of the line _without exception_ and I get frequent material waste" If you make the context small enough, we're back at /api/create /api/read /api/update /api/delete; or, if you're old-school, a basic function
• jdkee 11mo ago
  Reads like it was written by ChatGPT.
• felixfurtak 11mo ago
  People keep comparing the AI boom to the Dotcom bubble. They’re wrong. Others point to the Railway Mania of the 1840s — closer, but still not quite right. The real parallel is Canal Mania — Britain’s late-18th-century frenzy to dig waterways everywhere. Investors thought canals were the future of transport. They were, but only briefly. Today’s AI runs on GPUs — chips built for rendering video games, not thinking machines. Adapting them for AI is about as sensible as adapting a boat to travel across land. Sure, it moves — but not quickly, not cheaply, and certainly not far. It works for now, but the economics are brutal. Each new model devours exponentially more power, silicon, and capital. It just doesn't scale. The real revolution will come with new, hardware built for the job (that hasn't been invented yet) — thousands of times faster and more efficient. When that happens, today’s GPU farms will look like quaint relics of an awkward, transitional age: grand, expensive, and obsolete almost overnight.
  • l9o 11mo ago
    I think specialized hardware will emerge for specific proven workloads (transformer inference, for example), but GPUs won't become obsolete. They'll remain the experimentation platform for new architectures. You need flexibility to discover what's worth building custom silicon for. Think 3D printers versus injection molds: you prototype with flexibility, then mass-produce with purpose-built tooling. We've seen this pattern before too. CPUs didn't vanish when GPUs arrived for graphics. The canal analogy assumes wholesale replacement. Reality is likely more boring: specialization emerges and flexibility survives.
    • roommin 11mo ago
      Sure, but your R&D infrastructure isn't going to be 1.5 trillion dollars.
  • realaaa 11mo ago
    I think it'll be a combination of hardware of course, but also better software - surely there is a better way of doing this (like our brains do) which will eventually require less power
  • 11mo ago
• hnburnsy 11mo ago
  So weird, I asked AI (Grok) just yesterday how far along we are towards post-scarcity and it replied... >We’re in the 1950s equivalent of the internet boom — dial-up modems exist, but YouTube doesn’t.
  • atq2119 11mo ago
    Which is ironic, considering that the 1950s were long before the internet boom. The internet didn't even exist yet, let alone dial-up modems.
    • buu700 11mo ago
      I was curious and looked this up: https://en.wikipedia.org/wiki/Modem#1950s https://en.wikipedia.org/wiki/Modem#1950s Mass production of telephone line modems in the United States began as part of the SAGE air-defense system in 1958, connecting terminals at various airbases, radar sites, and command-and-control centers to the SAGE director centers scattered around the United States and Canada. Shortly afterwards in 1959, the technology in the SAGE modems was made available commercially as the Bell 101, which provided 110 bit/s speeds. Bell called this and several other early modems "datasets".
• gizajob 11mo ago
  Great analysis but one thing overlooked is that current gen advanced AI could in five or ten years (or less) be run from the smartphone or desktop, which could negate all the capex from the hyperscalers and also Nvidia, which presents a massive target for competitors right now. The self same AI revolution we’re seeing created right now could take itself down if AI tooling becomes widespread.
  • melagonster 11mo ago
    If this happen, everyone's computer will contain one Nvidia GPU.
    • port3000 11mo ago
      Not really. Apple is a very strong competitor here.
• melaticantik 11mo ago
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• melaticantik 11mo ago
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• 0xbadcafebee 11mo ago
  It's clear that AI is useful. It's not yet clear how useful. Hype has always obscured real value, and nobody knows the real value until the hype cycle completes. What is clear, is that we have strapped a rocket to our asses, fueled with cash and speculation. The rocket is going so fast we don't know where we're going to land, or if we'll land softly, or in a very large crater. The past few decades have examples of craters. Where there are potential profits, there are people who don't mind crashing the economy to get them. I don't understand why we're allowing this rocket to begin with. Why do we need to be moving this quickly and dangerously? Why do we need to spend trillions of dollars overnight? Why do we need to invest half the fucking stock market on this brand new technology as fast as we can? Why can't we develop it in a way that isn't insanely fast and dangerous? Or are we incapable of decisions not based on greed and FOMO?
  • xwolfi 11mo ago
    Who is "we" ? I certainly don't spend trillions on frivolities. I think the Saudis via Softbank do, and these people build fake cities in the desert, they are by definition dumb money. They earn so much from oil and are so keenly aware this will stop, they'd rather spend a trillion on a failure, than keep that cash rotting away with no future investment. No project, no country, can swallow the Saudi oil money like Sam Altman can. So, they're building enormous data centers with custom nuclear plants and call that Stargate to syphon that dumb money in. It's the whole business model of Softbank: find a founder whose hubris is as big as Saudi stupidity.
    • deleted 11mo ago
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• blazespin 11mo ago
  KIMI just proposed linear attention. I mean, one breakthrough, and blammo, the whole story changes.
• hi_hi 11mo ago
  The article seems well researched, has some good data, and is generally interesting. It's completely irrelevant to the reality of the situation we are currently in with LLMs. It's falling into the trap of assuming we're going to get to the science fiction abilities of AI with the current software architectures, and within a few years, as long as enough money is thrown at the problem. All I can say for certain is that all the previous financial instruments that have been jumped on to drive economic growth have eventually crashed. The dot com bubble, credit instruments leading to the global financial crisis, the crypto boom, the current housing markets. The current investments around AI that we're all agog at are just another large scale instrument for wealth generation. It's not about the technology. Just like VR and BioTech wasn't about the technology. That isn't to say the technology outcomes aren't useful and amazing, they are just independant of the money. Yes, there are Trillions (a number so large I can't quite comprehend it to be honest) being focused into AI. No, that doesn't mean we will get incomprehensible advancements out the other end. AGI isn't happening this round folks. Can hallucinations even be solved this round? Trillions of dollars to stop computers lying to us. Most people where I work don't even realise hallucinations are a thing. How about a Trillion dollars so Karen or John stop dismissing different viewpoints because a chat bot says something contradictory, and actually listen? Now that would be worth a Trillion dollars. Imagine a world where people could listen to others outside of their bubble. Instead they're being given tools that re-inforce the bubble.
  • DanHulton 11mo ago
    Indeed, this could be AI's fusion energy era, or AI's VR era, or even AI's FTL travel era.
• skywhopper 11mo ago
  Really tired of seeing the story about how, “sure Worldcom et al went bankrupt but their investments in fiber optics gave us the physical infrastructure of the Internet today.” I mean, sort of, but the fiber optics in the ground have been upgraded several by orders of magnitude of its original capacity by replacing the transceivers on either end. And the fiber itself has lasted and will continue to last for decades. Neither of those properties is true of the current datacenter/GPU boom. The datacenter buildings may last a few decades but the computers and GPUs inside will not and they cannot be easily amplified in their value as the fiber in the ground was.
• ecommerceguy 11mo ago
  I'm getting ai fatigue. It's ok to rewrite quick emails that i'm having brain farts on but anything deep it just sucks. I certainly can't see paying for it.
  • aurareturn 11mo ago
    Weird because AI has been solving hard problems for me. Even finding solutions that I couldn’t find myself. Ie. sometimes my brain cant wrap around a problem, I throw it to AI and it perfectly solves it. I pay for chatgpt plus and github copilot.
    • leptons 11mo ago
      It is weird that AI is solving hard problems for you. I can't get it to do the most basic things consistently, most of the time it's just pure garbage. I'd never pay for "AI" because it wastes more of my time than it saves. But I've never had a problem wrapping my head around a problem, I solve problems. I'm curious what kind of problem your "brain cant wrap around", but the AI could.
      • praveen9920 11mo ago
        In my case, Learning new stuff is one place I see AI playing major role. Especially the academic research which is hard to start if you are newbie but with AI I can start my research, read more papers with better clarity.
      • aurareturn 11mo ago
        I'm curious what kind of problem your "brain cant wrap around", but the AI could. One of the most common use cases is that I can't figure out why my SQL statement is erroring or doesn't work the way it should. I throw it into ChatGPT and it usually solves it instantly.
        • Wilduck 11mo ago
          Is that a "hard problem" though? Really?
• yunnpp 11mo ago
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  • janpio 11mo ago
    > I hope you got those chicks on Substack clapping for you, at least. Fast lane to getting laid for sure. What is this about? Weird thing to say.
    • yunnpp 11mo ago
      I felt the first half of my reply was too elaborate for such a self-promoting, inaccurate, Nostradamus-knows-better kind of post. I thought it was only sensible that I meet nonsense with nonsense in my closing. Looks like you enjoyed that.
  • aurareturn 11mo ago
    It is clearly true. Up until the AI boom, the vast majority of a typical tech company’s costs are software engineers. Now it may be compute costs.
    • aprilthird2021 11mo ago
      It's not true. Even though the vast majority of a tech company's cost were engineers, they also all grew like crazy and made much more (and grew even more) than they paid in salaries. The OP is correct, if it was just about salaries. These companies would have grown far more and hired far more endlessly, but the complexity of software at that scale makes diminishing returns from hiring more.
      • yunnpp 11mo ago
        You put it best by calling out the scale explicitly.
    • Xss3 11mo ago
      If anything the push to use AI has made me more expensive as a dev so far. If im honest i am only slightly more productive but i also burn through tokens.
• mvdtnz 11mo ago
  It's more like the Segway era when people with huge stakes in Segway tried to convince the world we were about to rebuild entire cities around the new model.
• topranks 11mo ago
  Dial-up suggests he knows that many orders of magnitude of performance increase will happen, like with internet connectivity. I’m not sure that’s a certainty.
• simultsop 11mo ago
  > MIT Professor, 1993' quote words to live by...
• RyanOD 11mo ago
  Every few years I find myself thinking, "Wow...the latest tech is amazing! We were in the stone ages just a few years ago." I don't expect that to cease in my lifetime.
  • Anamon 11mo ago
    I feel like I've been in such a phase for a good 10-15 years now. I miss looking back and marvel at the technological progress we've made, and eagerly anticipating the next exciting thing. For a while now, I look back wondering why so few people seem bothered by the fact that technology becomes worse every year, with fewer features, lower quality, and more stupidity; and new developments are no longer about exciting improvements, but dreading what new thing that used to work perfectly fine is broken now. For a bit, I thought science and industry were finally starting to see the problem with our quality degradation and tech regression. Instead, the current hype cycle is all about settling for even crappier quality and lower reliability.
• taccal 11mo ago
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• nicman23 11mo ago
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• BoredPositron 11mo ago
  It took a long long time going from a walking bike to the one we know now. It's not going to be different from AI. Transformers will only get us so far and for the rest we need another tock. AGI is not going to happen with this generation of hardware. We are hitting spatial scaling limits in video and image generation and we are hitting limits with LLMs.
• _ink_ 11mo ago
  > The other claims that AI will create more jobs than it destroys. Maybe it's my bubble, but so far I didn't hear someone saying that. What kind of jobs should that be, given that both forms, physical and knowledge work, will be automatable sooner or later?
  • joe_the_user 11mo ago
    I haven't seen that either. That claim just reads like he's concocted two sides for his position to be the middle ground between. I did that essays in high school but I try to be better than that now.
• teiferer 11mo ago
  > Regardless of which specific companies survive, this infrastructure being built now will create the foundation for our AI future - from inference capacity to the power generation needed to support it. Does that comparison with the fiber infra from the dotcom era really hold up? Even when those companies went broke, the fiber was still perfectly fine a decade later. In contrast, all those datacenters will be useless when the technology has advanced by just a few years. Nobody is going to be interested in those machines 10 years from now, no matter if the bubble bursts or not. Data centers are like fresh produce. They are only good for a short period of time and useless soon after. They are being constantly replaced.
  • caminante 11mo ago
    > from inference capacity to the power generation needed to support it. Power gen = yes. Reasoning is trivial due to long useful asset life. For compute, why would it be any different than fiber in the AI bubble pop case? Less useful, but not useless. Are you misremembering the fiber overbuild era? The fiber investments were impaired and sold off for pennies on the dollar. The value here wouldn't go to zero, either.
• zkmon 11mo ago
  The only problem is, similarity with dotcom might only go thus far. For example, dotcom bubble itself might not have a similar thing in the past at that time. This is because the overall world context is different and interaction of social, political and economic forces is different. So, when people say something about future, they are looking into the past to draw some projections or similar trends, but they may be missing the change in the full context. The considered factors of demand and automation might be too few to understand the implications. What about political, social and economic landscape? The systems are not so much insulated to study using just a few factors.
• sherinjosephroy 11mo ago
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• sanskarix 11mo ago
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• sanskarix 11mo ago
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  • crims0n 11mo ago
    Good point. Experience teaches us that the breakthroughs in AI will lead to something, we just don’t know what that something is yet and there is a lot of (maybe too much) speculative betting on what it could be.
  • Razengan 11mo ago
    > most people hit a wall figuring out what it's actually good for beyond parlor tricks. That's what my parents thought about computers and the internet, wondering what it's actually good for beyond burning $9000 in phone bills to Zerg rush Protoss noobs. And all the other things computers+internet could do, they could already do through other more reliable (at the time) ways. But then it turned out that simply making mundane tasks just a little bit faster, and reducing the need to interact with strangers by just that little bit, created a new step on the staircase, a new baseline, with which to reach and do other grander things more easily.
    • hshdhdhehd 11mo ago
      Email was the killer app I think that showed everyone how damn useful the internet is. Then Hotmail showed how convenient email can be. What is the AI version of that? Maybe code generation. Maybe.
      • brazukadev 11mo ago
        Code generation/LLMs are the SMTP and other internet protocols, we don't have killer apps yet.
      • Razengan 11mo ago
        > What is the AI version of that? Being able to plan a trip from a single sentence would be one killer app for many people: "I'm free next week. I'd like to go to A, B, or C for a couple days. What's a cheap flight and a room within this budget near X area?" and if it could go and also make a booking through your accounts that would be amazing. But right now even Google's Gemini is an utter useless dumbass if asked to search Google Flights or Airbnb. I mean if LLMs could just be a natural-language wrapper around existing tools, that'd be amazing in itself. But corporivalry has made that an stillborn dream.
• hansmayer 11mo ago
  More like Bullshit Era
• sanskarix 11mo ago
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• lilerjee 11mo ago
  What are the disadvantages of AI? The author didn't mention them. AI companies robbed so much data from the Internet free and without permission. Sacrificing the interests of owners of websites. It's not sustainable. It's impossible for AI to go far.
  • cbdevidal 11mo ago
    I sometimes wonder, in a world where the data becomes overwhelmingly AI-generated, if AI starts feeding on itself, a copy of a copy of a copy.
    • catlifeonmars 11mo ago
      We’re already seeing this sort of well poisoning occur.
• delegate 11mo ago
  In the dial-up era, the industry was young, there were no established players, it was all a big green field. The situation is far from similar now. Now there's an app for everything and you must use all of them to function, which is both great and horrible. From my experience, current generation of AI is unreliable and so cannot be trusted. It makes non-obvious mistakes and often sends you off on tangents, which consumes energy and leads to confusion. It's an opinion I've built up over time from using AI extensively. I would have expected my opinion to improve after 3 years, but it hasn't.
• geon 11mo ago
  The LLM architectures we have now have reached their full potential already, so going further would require something completely different. It isn’t a matter of refining the existing tech, whereas the internet of 1997 is virtually technologically identical to what we have today. The real change has been sociological, not technological. To make a car analogy; the current LLMs are not the early cars, but the most refined horse drawn carriages. No matter how much money is poured into them, you won’t find the future there.
  • ozgung 11mo ago
    > The LLM architectures we have now have reached their full potential already. How do we know that?
    • efficax 11mo ago
      what we can say right now is that we've hit the point of diminishing returns and the only way we're going to get signicantly more capable models is through a technological advance that we cannot forsee (and that may not come for decades if it ever comes)
    • polynomial 11mo ago
      Exactly. You're absolutely right to focus on that.
  • tim333 11mo ago
    You could see some potential modifications. Already some are multimodal. You'd probably want something to change the weights as time goes on so they can learn. It might be more steam engines needing to be converted to petrol engines.
  • mkl 11mo ago
    Dial-up modems reached their full 56kbps potential in 1997, and going further required something completely different. It happened naturally to satisfy demand, and was done by many of the same companies and people; the change was technological, not sociological. I think we're probably still far from the full potential of LLMs, but I don't see any obstacles to developing and switching to something better.
• wazoox 11mo ago
  There are some gross approximations in the comparison. Oversized fibre optics networks laid out in the late 90s were used for years and may even be in part still used today; today's servers and GPUs will be obsolete in 3 to 5 years, and not worth their weight in scrap metal in 10. The part about Jevons' paradox is interesting though.
• hufdr 11mo ago
  What makes this analogy great is that nobody in the dial up days could imagine Google or YouTube. We’re in the same place now nobody knows who becomes “the Google of AI,” and that uncertainty usually means a new platform is being born.
• Arn_Thor 11mo ago
  There is one key way in which I believe the current AI bubble differs from the TMT bubble. As the author points out, much of the TMT bubble money was spent building infrastructure that benefited us many decades later. But in the case of AI, that argument is much harder to make. The cost of compute hardware is astronomic relative to the pace of improvements. In other words, a million dollars of compute today will be technically obsolete (or surpassed on a performance/watt basis) much faster than the fiber optic cables laid by Global Crossing. And the AI data centers specialized for Nvidia hardware today may not necessarily work with the Nvidia (or other) hardware five years from now—at least not without major, costly retrofits. Arguably, any long-term power generation capacity put down for data centers of today would benefit data centers of tomorrow, but I'm not sure much such investment is really being made. There's talk of this and that project, but my hunch and impression is that much of it will end up being small-scale local power generation from gas turbines and the like, which is harmful for the local environment and would be quickly dismantled if the data center builders or operators hit the skids. In other words, if the bubble bursts I can't imagine who would be first in line to buy a half-built AI data center. This leads me to believe this bubble has generated much less useful value to benefit us in future than the TMT bubble. The inference capacity we build today is too expensive and ages too fast. So the fall will be that much more painful for the hyperscalers.
• clownpenis_fart 11mo ago
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• innagadadavida 11mo ago
  One thing the analysis for textiles vs cars misses I the complexity of the supply chain and the raw materials / components that need to be procured to make the end product. Steel/textiles have simple supply chains and they went through a boom/bust cycle as the demand plateaued. But cars on the other hand will not go through the same pattern - there are too many logistical things that need to line up and the trust factor in each of those steps as well as the end product is quite high. Software is similar to cars - the individual components that need to be properly procured and put together is very complex and trust will be important - will you trust that you as a restaurant owner vibe coded your payment stack properly or will you just drop in the 3 lines to integrate with Stripe? I think most of the non-tech business owners will do the latter.
• baggachipz 11mo ago
  tl;dr: Gartner Hype Cycle[1] [1] https://en.wikipedia.org/wiki/Gartner_hype_cycle https://en.wikipedia.org/wiki/Gartner_hype_cycle
• weare138 11mo ago
  The last AI bubble was AI's dial-up era because it was the dial-up era: https://en.wikipedia.org/wiki/AI_winter https://en.wikipedia.org/wiki/AI_winter https://www.youtube.com/watch?v=sV7C6Ezl35A https://www.youtube.com/watch?v=sV7C6Ezl35A
• polynomial 11mo ago
  Great comment threads here, but the OP article leans too much on AI generated text that is heavy on empty synthetic rhetoric and generative AI clichés.
• wosined 11mo ago
  The thing is that the average person now thinks AI is revolutionary. Thus, if you form the analogy correctly, then it tells us that the average person is wrong and that AI is NOT revolutionary. (I'm not arguing either case.)