11 ms·

> Market signals on an impending AI bust are broader than just Oracle’s woes. It's worse than that - I believe that Oracle is one of the (many) companies right

> Market signals on an impending AI bust are broader than just Oracle’s woes. It's worse than that - I believe that Oracle is one of the (many) companies right now that, if their AI experimentation fails, will stop the music, and everyone will be running for a chair. Oracle is one of a few foundational components in the circular-investing group of AI companies. If they fail to make their commitments they're the first domino to fall.

someuser54541 3mo ago
What's the best way to hedge against this, considering many of us have significant savings in the market? A few puts on SPY dated a year or two out?
- lelanthran 3mo ago
  What's the best way to hedge against this, considering many of us have significant savings in the market? I dunno. "The market can remain irrational longer than you can remain solvent"
- gruez 3mo ago
  >A few puts on SPY dated a year or two out? You think the hedge funds selling SPY options don't have this priced in already? Of course, you can still make money on this bet, just like you can win money at a roulette table, but unless you think have some special insight that hedge/quant funds don't have, buying options should be negative EV.
  - sitzkrieg 3mo ago
    agree, mostly true. always better to find a credit spread for your desired exposure
  - someuser54541 3mo ago
    > but unless you think have some special insight that hedge/quant funds don't have Of course not, but it is a hedge, is it not? What would be your preferred hedge in this scenario?
  - turbonaut 3mo ago
    The ask was not how to make money, it was how to hedge. I’d argue that it is very normal for hedging to be giving up expected value in return for a reduction in volatility of returns. If you have a lot of exposure to the market already one could say not buying the option is more akin to roulette.
  - quickthrowman 3mo ago
    Options market makers have no idea where the S&P will be in one year, options are priced on the current implied volatility. The bid and ask will be slightly lower and higher than the true current option price so the MM can make their nut on the spread and then hedge so they’re delta neutral. If you buy a put you are making a bet that realized volatility will exceed implied volatility. This may or may not happen and there’s no way to predict the future.
- steve1977 3mo ago
  Gold maybe? (no investment advice)
- bsimpson 3mo ago
  It's tempting to sell a bunch, but then you've got cash. What do you do with cash when the government keeps printing money and assets are all overpriced?
- cmiles8 3mo ago
  Stay well diversified, keep investing each month, and take a nap. There are almost surely severe bumps ahead for the AI space and that will likely spill over into the broader market. But unless you’re retiring in the next few years don’t worry about it. You can’t time the ups and downs and the only proven strategy is to just keep investing in a broad indexed portfolio and just ride out. You’ll take a short term hit but also end up buying on the dip because you don’t stop investing.
  - someuser54541 3mo ago
    I suppose I'm just a little worried about a 10 year sideways market. The run-up has been absolutely insane the past year...some graphs are just a literal straight line up. I didn't get to participate in much of that and concerned the prevailing wisdom on these larger timescales may no longer hold true.
    - fny 3mo ago
      If you didn't participate in it, what are you hedging?
      - magicalist 3mo ago
        > If you didn't participate in it But that's not what they said? >> I didn't get to participate in much of that
      - kazinator 3mo ago
        I would guess, longer positions held from before the past year to date period. (As for me, I'm just hedging my rhetorical front lawn.)
    - jryan49 3mo ago
      Stocks are long term investments, 10yr+ So you should expect the possibility of a sideways market.
      - 3mo ago
- moduspol 3mo ago
  I thought that a year or two ago. Thankfully I did not. I have no idea how long the music will keep playing.
- arielcostas 3mo ago
  Wouldn't it be wiser to get out of the market into fixed rate assets like government bonds? Maybe have some into puts on SPY (or QQQ since tech would probably have bigger losses) too, but mainly getting out of long positions on what seems a really overvalued stock market
  - nsagent 3mo ago
    Wouldn't it be wiser to get out of the market into fixed rate assets like government bonds? I did that earlier this year ahead of the April earnings reports. I was a bit too early to the punch, but I prefer that versus being too late. I just hope the companies aren't considered too big to fail. Bailing them out would be a bad idea. https://www.openmarketsinstitute.org/publications/no-bailouts-for-big-tech-billionaires-policies-for-when-the-ai-bubble-bursts https://www.openmarketsinstitute.org/publications/no-bailout...
    - CamperBob2 3mo ago
      I just hope the companies aren't considered too big to fail. Bailing them out would be a bad idea. They will be. When the SHTF, you'll see Rubio in the room^H^H^H^H circus tent, sitting right next to Bessent, arguing that propping up OpenAI is as much a national security interest as bailing out GM was.
- the__alchemist 3mo ago
  #1: Great question, and I would love to hear the answers (And am learning from the ones posted) #2: What I've done so far: Haven't bought stock in a year. Have moderate short positions on Palantir, SpaceX, and Tesla. Have big short positions in the most popular Quantum computing companies. (Scams IMO). I have sold most of my positions ("profit taking"?) in stocks which have gone up a lot in the past year. (Nvidia, Broadcom etc), and am no longer using margin; about 1/3 of my brokerage value is now "cash", generating ~3% interest.
- glaslong 3mo ago
  Bet on Chinese tech sector to eat everyone's lunch with cheaper, faster, smaller, open-weight models?
- pid-1 3mo ago
  Hold short term debt (e.g money market funds or SOFR ETFs). Then you will have cash in hand if either stocks fall or yelds raise. Never buy derivatives as a non institutional investor.
  - georgeecollins 3mo ago
    100% this is great advice!
  - marojejian 3mo ago
    Why should a retail investor never buy derivatives? spreads?
    - dboreham 3mo ago
      Not the parent but I'm guessing: a) it's expensive and b) you can shoot your feet off.
      - miningape 3mo ago
        [dead]
    - baal80spam 3mo ago
      It's all about getting a call from the dreaded Margin.
    - pid-1 3mo ago
      Retail investors do not have access to systems that calculate risk, margins, pnl, etc... and generally also don't have the necessary knowledge and market data to price such instruments correctly. Most ppl are better off KISSing and lowering risk by selling equity for fixed income.
      - jurgenburgen 3mo ago
        Ironically you can use AI tools to get some idea of how to trade puts.
- linsomniac 3mo ago
  Reminder: Serious people have been predicting a market crash "within the next 3 months" for 3 years now. In that time, the "market" has gone up around 70% (66%-86% depending on the what part you are looking at). A friend of mine and I go out to lunch every 3 months and talk about, among other things, investing. We've made a trope of it, calling out the people who are predicting an imminent market crash every time we have lunch. I'm not saying that it doesn't look like it's going to crash, but I'll also say that there's also a very sizeable downside potential for getting out of the market.
  - hnisnotbenign 3mo ago
    [flagged]
- inigyou 3mo ago
  Just sell all your ETFs and buy them again when the market goes up or down. You're very likely to lose money with options and you will definitely lose a lot of money if you buy enough options to hedge your full exposure.
  - deleted 3mo ago
    [deleted]
  - jr3592 3mo ago
    And risk missing out on the gains in the market that can and likely will happen between then and now. Most researchers have shown that attempting to play the market is likely to fail in the end. Set it and forget it. Ride the wave.
    - inigyou 3mo ago
      You will definitely lose less in opportunity cost than the actual cost of hedging your position, because hedging is extremely expensive and cancels out almost all gains. If it was cheap, everyone would do it.
  - chasd00 3mo ago
    unless you're doing this in an IRA or your 401k remember the IRS wants its cut of any gains you may lock in. That's a painful check to write let me tell you.
- chasd00 3mo ago
  > What's the best way to hedge against this, considering many of us have significant savings in the market? honestly, if you're >= 10 years away from needing that money (retirement or whatever) then the best hedge is to ignore the news and just keep contributing to your investment as always. I got caught up in a couple moments (tarif drama April before last was one) where i panicked and sold and then it only took a few months to get back to even meanwhile 18% of my capital gains were now due to the taxman. I wrote a check to the IRS for 10's of thousands for no reason except over reacting and ignoring every financial advisor's advice. if you're going to need your investment money within 10 years then you need to get advice on how to start reducing risk (and therefore reward) because you don't have time to survive and repair from a crash.
  - icedchai 3mo ago
    I knew guys who panicked in Feb 2020, at the start of covid. They moved everything to cash, never got back into the market. Things recovered faster than they thought. The unfortunate truth is they would've more than doubled their money if they stayed invested.
- ashtonshears 3mo ago
  I am not a financial advisor. Assuming you are the average person, and not a financial professional, using actual financial hedging instruments properly is unlikely, and far more likely to just increase risk and lower expected return. A realistic way for an American citizen to reduce risk in the current market is to have a globally diversified portfolio that under-allocates to the US.
- brianwawok 3mo ago
  So you want to pay back the gains you make for the next year or two? Sounds like a good strategy
- duxup 3mo ago
  Is there really any answer to this kinda thing other than having a diversified portfolio and just riding it out?
- fakedang 3mo ago
  Dogs of the Dow
- DANmode 3mo ago
  > savings > market These are two different things. Because there are instruments that make market exposure easier, doesn’t make market exposure correct 100% of the time.
- nunez 3mo ago
  Bogleheads would say to stick to a three headed portfolio, maybe a bit more biased towards bonds. So that's what I'm doing.
echelon 3mo ago
Everyone in the tech and media world is dead set on this being a bubble. Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer. Teams can and will shrink. Look at all the production and advertising companies switching over to Seedance. I know ad firms bidding 1/4th their typical contract price (pharma, P&G, etc.) and winning contract after contract. This isn't dotcom "dark fiber" before demand. The demand is here now, big legacy firms are just struggling with deploying it. Nimble small teams are making a killing.
- xboxnolifes 3mo ago
  A financial bubble has almost nothing to do with how good the product is. It's about how much of the value the company can capture, and what the ratio of that capture is compared to the investment. It doesn't matter to investors if OpenAI or Anthropic can build AGI if a year later 10 competitors have similar models and eat into the revenue. OpenAI and Anthropic needs years, if not decades, of significant market dominance, post-enshitification, to justify their investment spend.
- lelanthran 3mo ago
  This: > Everyone in the tech and media world is dead set on this being a bubble. is completely orthogonal to this: > Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer. The industry being in a bubble or not is irrelevant to the tech being good or bad. The dot-com bubble popped (and was a bubble) even while the tech was fit for purpose.
- chasd00 3mo ago
  I think the "bubble" is more about return on investment and not usefulness of the technology. So much money has been invested on the assumption that so much return is going to materialize. The more money going in the bigger the expectation of return, that's the bubble.
- sofixa 3mo ago
  > Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer. Teams can and will shrink. If that's true or not, it's a bit irrelevant. Maybe teams won't shrink because of Jevon's paradox, or maybe tech debt will catch up. But it doesn't matter because the people calling this a bubble mostly believe that the companies burning money cannot have the return on investment needed. This can be for a variety of reasons, but my favourite one is just that open source AI models are good enough, cost a fraction of what the frontier ones do (with predictable costs), can be fine tuned, and can be relied upon (no orange tweet banning your acces to the model you've been using). So for me OpenAI and Anthropic will really struggle to merit their valuations. And then companies like Oracle are just a dumpster on fire. GPU hosting is a commodity business; expensive one, for sure, but there's no way in hell they'll make actual returns on the money burned with zero moat. And things are even worse when you consider the political involvement of the CEO and his nepo baby, which can easily burn good will.
kazinator 3mo ago
It would be great if they open sourced the proprietary bits in the VirtualBox suite before that.
- simoncion 3mo ago
  Other than having a nice management UI, what does Virtualbox do that qemu doesn't these days?
  - kazinator 3mo ago
    Run your years-old VirtualBox images? If I were to guess; maybe QEMU does that too.
    - simoncion 3mo ago
      The qemu-img(1) installed on my system claims that it supports every disk format supported by Virtualbox [0], so I guess the only thing left would be to be able to handle the "machine definition" file. qemu definitely won't do that out of the box, so, yeah, VirtualBox is better than qemu there. But I bet there's a fancy-pants GUI out there that has an import wizard that will handle that for you. [0] <https://www.virtualbox.org/manual/topics/storage.html#vdidetails https://www.virtualbox.org/manual/topics/storage.html#vdidet...>
      - kazinator 3mo ago
        Regardless of how suitable qemu is for Vbox users, it's unmatched for batch uses, like as something part of a distro build chain to allow non-cross-compilable packages to be built for ARM on x86-64 and such. And ... to interactively step into cross-compiled sysroots. Vbox has the desktop experience. The "guest integration" stuff and whatnot. If you've used it for years, familiarity.
        simoncion 3mo ago
        > ...it's unmatched for batch uses... Quite possibly. I know that it's what Openstack uses for virtualization. > ...to interactively step into... Sure, running on an emulated CPU can be very nice. > ...like as something part of a distro build chain to allow non-cross-compilable packages to be built for ARM on x86-64... This sounds like it would be incredibly slow. As in "It's better to just buy some inexpensive ARM PCs" slow. I know that GCC and Clang can cross-compile just fine. It looks like Rust cross-compiles, and I think Go does as well. Do you know of major tools and/or languages that don't cross-compile?
notatoad 3mo ago
My understanding of the ai circular financing racket is that not everyone will be running for a chair. Nvidia owns all the chairs, and they’re letting other companies pretend to for a while, but if it all falls apart the backstop to the collapse will be nvidia.
- ndsipa_pomu 3mo ago
  Doesn't Nvidia's success depend hugely on AI money pumping up demand for their products? If/when AI companies run out of money to keep investing in data centres, the bottom will fall out of the market and hopefully we can go back to buying reasonably priced graphics cards.
  - deleted 3mo ago
    [deleted]
dibbsonline 3mo ago
Takes a lot of IaaS to support the GPUs and workflows, all of that kit is immediately re-useable as general purpose compute to exit the commercial DCs they operate out of today. Much of their current debt fuelled expansion isn't singular to AI. The circular narrative ignores this.
- surgical_fire 3mo ago
  Without the massive investiment in GPUs, what is the excessive IaaS going to support?
  - r_lee 3mo ago
    not to mention how little it costs compared to the actual GPU silicon
seanmcdirmid 3mo ago
Oracle has been a toxic tech for a long time (along with IBM). I don't think anyone is putting it in the same bucket of modern tech companies, let alone AI companies. Frankly, their forays into dubious financial engineering and investments are expected at this point.
solumunus 3mo ago
And let’s be honest there’s absolutely no chance Oracle will be successful here right?
lenkite 3mo ago
Can someone explain this circular-investing domino ? If Oracle falls, who else would fall ?
- jawilson2 3mo ago
  I think he's saying that if one company panics or fails, all of the other AI companies will quickly pull out, and it will be a race to not be holding the hot potato at the end when the bubble bursts. Lots of analogies there! This is where we get the phrase "the stock market takes the stairs up and the elevator down". It crashes quickly and hard, and can be triggered by one event.

someuser54541 3mo ago

What's the best way to hedge against this, considering many of us have significant savings in the market? A few puts on SPY dated a year or two out?

lelanthran 3mo ago
What's the best way to hedge against this, considering many of us have significant savings in the market? I dunno. "The market can remain irrational longer than you can remain solvent"
gruez 3mo ago
>A few puts on SPY dated a year or two out? You think the hedge funds selling SPY options don't have this priced in already? Of course, you can still make money on this bet, just like you can win money at a roulette table, but unless you think have some special insight that hedge/quant funds don't have, buying options should be negative EV.
- sitzkrieg 3mo ago
  agree, mostly true. always better to find a credit spread for your desired exposure
- someuser54541 3mo ago
  > but unless you think have some special insight that hedge/quant funds don't have Of course not, but it is a hedge, is it not? What would be your preferred hedge in this scenario?
- turbonaut 3mo ago
  The ask was not how to make money, it was how to hedge. I’d argue that it is very normal for hedging to be giving up expected value in return for a reduction in volatility of returns. If you have a lot of exposure to the market already one could say not buying the option is more akin to roulette.
- quickthrowman 3mo ago
  Options market makers have no idea where the S&P will be in one year, options are priced on the current implied volatility. The bid and ask will be slightly lower and higher than the true current option price so the MM can make their nut on the spread and then hedge so they’re delta neutral. If you buy a put you are making a bet that realized volatility will exceed implied volatility. This may or may not happen and there’s no way to predict the future.
steve1977 3mo ago
Gold maybe? (no investment advice)
bsimpson 3mo ago
It's tempting to sell a bunch, but then you've got cash. What do you do with cash when the government keeps printing money and assets are all overpriced?
cmiles8 3mo ago
Stay well diversified, keep investing each month, and take a nap. There are almost surely severe bumps ahead for the AI space and that will likely spill over into the broader market. But unless you’re retiring in the next few years don’t worry about it. You can’t time the ups and downs and the only proven strategy is to just keep investing in a broad indexed portfolio and just ride out. You’ll take a short term hit but also end up buying on the dip because you don’t stop investing.
- someuser54541 3mo ago
  I suppose I'm just a little worried about a 10 year sideways market. The run-up has been absolutely insane the past year...some graphs are just a literal straight line up. I didn't get to participate in much of that and concerned the prevailing wisdom on these larger timescales may no longer hold true.
  - fny 3mo ago
    If you didn't participate in it, what are you hedging?
    - magicalist 3mo ago
      > If you didn't participate in it But that's not what they said? >> I didn't get to participate in much of that
    - kazinator 3mo ago
      I would guess, longer positions held from before the past year to date period. (As for me, I'm just hedging my rhetorical front lawn.)
  - jryan49 3mo ago
    Stocks are long term investments, 10yr+ So you should expect the possibility of a sideways market.
    - 3mo ago
moduspol 3mo ago
I thought that a year or two ago. Thankfully I did not. I have no idea how long the music will keep playing.
arielcostas 3mo ago
Wouldn't it be wiser to get out of the market into fixed rate assets like government bonds? Maybe have some into puts on SPY (or QQQ since tech would probably have bigger losses) too, but mainly getting out of long positions on what seems a really overvalued stock market
- nsagent 3mo ago
  Wouldn't it be wiser to get out of the market into fixed rate assets like government bonds? I did that earlier this year ahead of the April earnings reports. I was a bit too early to the punch, but I prefer that versus being too late. I just hope the companies aren't considered too big to fail. Bailing them out would be a bad idea. https://www.openmarketsinstitute.org/publications/no-bailouts-for-big-tech-billionaires-policies-for-when-the-ai-bubble-bursts https://www.openmarketsinstitute.org/publications/no-bailout...
  - CamperBob2 3mo ago
    I just hope the companies aren't considered too big to fail. Bailing them out would be a bad idea. They will be. When the SHTF, you'll see Rubio in the room^H^H^H^H circus tent, sitting right next to Bessent, arguing that propping up OpenAI is as much a national security interest as bailing out GM was.
the__alchemist 3mo ago
#1: Great question, and I would love to hear the answers (And am learning from the ones posted) #2: What I've done so far: Haven't bought stock in a year. Have moderate short positions on Palantir, SpaceX, and Tesla. Have big short positions in the most popular Quantum computing companies. (Scams IMO). I have sold most of my positions ("profit taking"?) in stocks which have gone up a lot in the past year. (Nvidia, Broadcom etc), and am no longer using margin; about 1/3 of my brokerage value is now "cash", generating ~3% interest.
glaslong 3mo ago
Bet on Chinese tech sector to eat everyone's lunch with cheaper, faster, smaller, open-weight models?
pid-1 3mo ago
Hold short term debt (e.g money market funds or SOFR ETFs). Then you will have cash in hand if either stocks fall or yelds raise. Never buy derivatives as a non institutional investor.
- georgeecollins 3mo ago
  100% this is great advice!
- marojejian 3mo ago
  Why should a retail investor never buy derivatives? spreads?
  - dboreham 3mo ago
    Not the parent but I'm guessing: a) it's expensive and b) you can shoot your feet off.
    - miningape 3mo ago
      [dead]
  - baal80spam 3mo ago
    It's all about getting a call from the dreaded Margin.
  - pid-1 3mo ago
    Retail investors do not have access to systems that calculate risk, margins, pnl, etc... and generally also don't have the necessary knowledge and market data to price such instruments correctly. Most ppl are better off KISSing and lowering risk by selling equity for fixed income.
    - jurgenburgen 3mo ago
      Ironically you can use AI tools to get some idea of how to trade puts.
linsomniac 3mo ago
Reminder: Serious people have been predicting a market crash "within the next 3 months" for 3 years now. In that time, the "market" has gone up around 70% (66%-86% depending on the what part you are looking at). A friend of mine and I go out to lunch every 3 months and talk about, among other things, investing. We've made a trope of it, calling out the people who are predicting an imminent market crash every time we have lunch. I'm not saying that it doesn't look like it's going to crash, but I'll also say that there's also a very sizeable downside potential for getting out of the market.
- hnisnotbenign 3mo ago
  [flagged]
inigyou 3mo ago
Just sell all your ETFs and buy them again when the market goes up or down. You're very likely to lose money with options and you will definitely lose a lot of money if you buy enough options to hedge your full exposure.
- deleted 3mo ago
  [deleted]
- jr3592 3mo ago
  And risk missing out on the gains in the market that can and likely will happen between then and now. Most researchers have shown that attempting to play the market is likely to fail in the end. Set it and forget it. Ride the wave.
  - inigyou 3mo ago
    You will definitely lose less in opportunity cost than the actual cost of hedging your position, because hedging is extremely expensive and cancels out almost all gains. If it was cheap, everyone would do it.
- chasd00 3mo ago
  unless you're doing this in an IRA or your 401k remember the IRS wants its cut of any gains you may lock in. That's a painful check to write let me tell you.
chasd00 3mo ago
> What's the best way to hedge against this, considering many of us have significant savings in the market? honestly, if you're >= 10 years away from needing that money (retirement or whatever) then the best hedge is to ignore the news and just keep contributing to your investment as always. I got caught up in a couple moments (tarif drama April before last was one) where i panicked and sold and then it only took a few months to get back to even meanwhile 18% of my capital gains were now due to the taxman. I wrote a check to the IRS for 10's of thousands for no reason except over reacting and ignoring every financial advisor's advice. if you're going to need your investment money within 10 years then you need to get advice on how to start reducing risk (and therefore reward) because you don't have time to survive and repair from a crash.
- icedchai 3mo ago
  I knew guys who panicked in Feb 2020, at the start of covid. They moved everything to cash, never got back into the market. Things recovered faster than they thought. The unfortunate truth is they would've more than doubled their money if they stayed invested.
ashtonshears 3mo ago
I am not a financial advisor. Assuming you are the average person, and not a financial professional, using actual financial hedging instruments properly is unlikely, and far more likely to just increase risk and lower expected return. A realistic way for an American citizen to reduce risk in the current market is to have a globally diversified portfolio that under-allocates to the US.
brianwawok 3mo ago
So you want to pay back the gains you make for the next year or two? Sounds like a good strategy
duxup 3mo ago
Is there really any answer to this kinda thing other than having a diversified portfolio and just riding it out?
fakedang 3mo ago
Dogs of the Dow
DANmode 3mo ago
> savings > market These are two different things. Because there are instruments that make market exposure easier, doesn’t make market exposure correct 100% of the time.
nunez 3mo ago
Bogleheads would say to stick to a three headed portfolio, maybe a bit more biased towards bonds. So that's what I'm doing.

echelon 3mo ago

Everyone in the tech and media world is dead set on this being a bubble. Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer. Teams can and will shrink. Look at all the production and advertising companies switching over to Seedance. I know ad firms bidding 1/4th their typical contract price (pharma, P&G, etc.) and winning contract after contract. This isn't dotcom "dark fiber" before demand. The demand is here now, big legacy firms are just struggling with deploying it. Nimble small teams are making a killing.

xboxnolifes 3mo ago
A financial bubble has almost nothing to do with how good the product is. It's about how much of the value the company can capture, and what the ratio of that capture is compared to the investment. It doesn't matter to investors if OpenAI or Anthropic can build AGI if a year later 10 competitors have similar models and eat into the revenue. OpenAI and Anthropic needs years, if not decades, of significant market dominance, post-enshitification, to justify their investment spend.
lelanthran 3mo ago
This: > Everyone in the tech and media world is dead set on this being a bubble. is completely orthogonal to this: > Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer. The industry being in a bubble or not is irrelevant to the tech being good or bad. The dot-com bubble popped (and was a bubble) even while the tech was fit for purpose.
chasd00 3mo ago
I think the "bubble" is more about return on investment and not usefulness of the technology. So much money has been invested on the assumption that so much return is going to materialize. The more money going in the bigger the expectation of return, that's the bubble.
sofixa 3mo ago
> Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer. Teams can and will shrink. If that's true or not, it's a bit irrelevant. Maybe teams won't shrink because of Jevon's paradox, or maybe tech debt will catch up. But it doesn't matter because the people calling this a bubble mostly believe that the companies burning money cannot have the return on investment needed. This can be for a variety of reasons, but my favourite one is just that open source AI models are good enough, cost a fraction of what the frontier ones do (with predictable costs), can be fine tuned, and can be relied upon (no orange tweet banning your acces to the model you've been using). So for me OpenAI and Anthropic will really struggle to merit their valuations. And then companies like Oracle are just a dumpster on fire. GPU hosting is a commodity business; expensive one, for sure, but there's no way in hell they'll make actual returns on the money burned with zero moat. And things are even worse when you consider the political involvement of the CEO and his nepo baby, which can easily burn good will.

kazinator 3mo ago

It would be great if they open sourced the proprietary bits in the VirtualBox suite before that.

simoncion 3mo ago
Other than having a nice management UI, what does Virtualbox do that qemu doesn't these days?
- kazinator 3mo ago
  Run your years-old VirtualBox images? If I were to guess; maybe QEMU does that too.
  - simoncion 3mo ago
    The qemu-img(1) installed on my system claims that it supports every disk format supported by Virtualbox [0], so I guess the only thing left would be to be able to handle the "machine definition" file. qemu definitely won't do that out of the box, so, yeah, VirtualBox is better than qemu there. But I bet there's a fancy-pants GUI out there that has an import wizard that will handle that for you. [0] <https://www.virtualbox.org/manual/topics/storage.html#vdidetails https://www.virtualbox.org/manual/topics/storage.html#vdidet...>
    - kazinator 3mo ago
      Regardless of how suitable qemu is for Vbox users, it's unmatched for batch uses, like as something part of a distro build chain to allow non-cross-compilable packages to be built for ARM on x86-64 and such. And ... to interactively step into cross-compiled sysroots. Vbox has the desktop experience. The "guest integration" stuff and whatnot. If you've used it for years, familiarity.
      - simoncion 3mo ago
        > ...it's unmatched for batch uses... Quite possibly. I know that it's what Openstack uses for virtualization. > ...to interactively step into... Sure, running on an emulated CPU can be very nice. > ...like as something part of a distro build chain to allow non-cross-compilable packages to be built for ARM on x86-64... This sounds like it would be incredibly slow. As in "It's better to just buy some inexpensive ARM PCs" slow. I know that GCC and Clang can cross-compile just fine. It looks like Rust cross-compiles, and I think Go does as well. Do you know of major tools and/or languages that don't cross-compile?

notatoad 3mo ago

My understanding of the ai circular financing racket is that not everyone will be running for a chair. Nvidia owns all the chairs, and they’re letting other companies pretend to for a while, but if it all falls apart the backstop to the collapse will be nvidia.

ndsipa_pomu 3mo ago
Doesn't Nvidia's success depend hugely on AI money pumping up demand for their products? If/when AI companies run out of money to keep investing in data centres, the bottom will fall out of the market and hopefully we can go back to buying reasonably priced graphics cards.
- deleted 3mo ago
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dibbsonline 3mo ago

Takes a lot of IaaS to support the GPUs and workflows, all of that kit is immediately re-useable as general purpose compute to exit the commercial DCs they operate out of today. Much of their current debt fuelled expansion isn't singular to AI. The circular narrative ignores this.

surgical_fire 3mo ago
Without the massive investiment in GPUs, what is the excessive IaaS going to support?
- r_lee 3mo ago
  not to mention how little it costs compared to the actual GPU silicon

seanmcdirmid 3mo ago

Oracle has been a toxic tech for a long time (along with IBM). I don't think anyone is putting it in the same bucket of modern tech companies, let alone AI companies. Frankly, their forays into dubious financial engineering and investments are expected at this point.

solumunus 3mo ago

And let’s be honest there’s absolutely no chance Oracle will be successful here right?

lenkite 3mo ago

Can someone explain this circular-investing domino ? If Oracle falls, who else would fall ?

jawilson2 3mo ago
I think he's saying that if one company panics or fails, all of the other AI companies will quickly pull out, and it will be a race to not be holding the hot potato at the end when the bubble bursts. Lots of analogies there! This is where we get the phrase "the stock market takes the stairs up and the elevator down". It crashes quickly and hard, and can be triggered by one event.