6 ms·

Don't Look Up

61 points by thelastgallon 2mo ago

minimaxir 2mo ago
> The other problem is the monstrous and abusive marketing campaign from the AI industry itself, and those who use AI on a regular basis. If you are against the consensus that AI will grow ever-larger every single quarter forever, you will be harassed and dogpiled across multiple social media platforms by everyone from AI influencers to actual journalists. The fact that it’s more professionally dangerous to critique the powerful than it is to align with them is disgusting, but I should be clear that these tactics only reinforce that I’m on the right track. > As Nik Suresh noted in his recent piece, refusing to say that AI is giving you massive productivity benefits will lead to actual professional consequences, because so much is riding on the overall grift about what AI can do (which is much, much less than the boosters will promise). This runs antithetical to productivity or good sense, and everybody involved in it should be both eternally shamed and shunned from any sensible business. > And while the AI industry and its fandom will claim that people like me are “skeptics” and “haters,” the outright hatred and vitriol that they spew for not falling in line behind a nakedly false narrative built on outright disinformation is disgraceful. sigh
- MrDrMcCoy 2mo ago
  Whether wrong or profound, it probably deserves a bit of actual discourse.
  - minimaxir 2mo ago
    The most charitable way I can read those paragraphs is that he's vaguely alluding to a nebulous conspiracy by a cabal of elites, which evokes a specific ideology that cannot be discussed constructively. Ed has repeatedly done the "why are people using LLMs?" bit but ignores what well-respected software engineers have actually said about them because he thinks they're AI boosters and they are just lying. At the least, it's an obvious blind spot to explain how the AI industry is what it is despite the numbers he reports arguing otherwise, and many of his industry trend predictions have been incorrect as a direct result.
    - crote 2mo ago
      > a nebulous conspiracy by a cabal of elites You are reading way too much into it. The truth is far simpler: when someone's salary depends on AI being a success, you'll have a really hard time getting them to openly say anything negative about AI. A huge portion of those "well-respected software engineers" work at companies which have pivoted to make AI an essential part of their strategy - because every company has. We're seeing companies where leadership explicitly says that anyone not enthusiastically making AI a core part of their workflow will get fired. It is literally forbidden to doubt AI. Want a promotion? Better start tokenmaxxing - your manager will be looking at your usage stats! And it's going to be the same at the higher levels. A "CTO of $company says $100M AI investment was a massive waste" headline is obviously unacceptable. You've already burned the money, so why ruin your stock price by being "the only company too incompetent to properly use AI" rather than slowly and silently scaling it down while pretending everything is fine and parroting all the buzzwords your peers are using on LinkedIn? The actual results are irrelevant. It does not matter if your AI results are mediocre, or "good in some edge cases", or "can speed up some easier work". The market has decided that AI is huge and a massive success, so anyone not adopting it and having extreme successes with it is a failure and will be punished. There's no need to invent a conspiracy here. Simple self-preservation will do.
      - fragmede 2mo ago
        Ah, yes. Because someone owns NVDA in their retirement account, they're going to intellectually bankrupt themselves and totally lie about being able to use an LLM to generate code feels faster than writing it manually. No conspiracy at all!
        ragall 2mo ago
        This isn't a conspiracy, which requires coordination between the co-conspirators: it's just old-fashioned common interest in propping up a bubble.
    - disgruntledphd2 2mo ago
      > The most charitable way I can read those paragraphs is that he's vaguely alluding to a nebulous conspiracy by a cabal of elites, which evokes a specific ideology that cannot be discussed constructively. If the markets/finance people reward you for saying you are all-in on AI, people with much of their compensation dependent on the markets (i.e. executives) will claim that AI is driving amazing results. Like, I find AI useful in lots of places and use these tools daily, but I don't see how the pure play model companies can deliver a good return for their investors. Unlike ed though, I do think that we'll find good uses for all the compute and (hopefully) the energy infrastructure being built out for this compute.
ofjcihen 2mo ago
Again, Zitron provides the numbers for his theories and they’re very compelling. I’m still not seeing any equally compelling arguments as to why this is not the case. Only accusations of doomerism and links to him calling the bubble collapse early.
- cogman10 2mo ago
  > I’m still not seeing any equally compelling arguments as to why this is not the case. Zitron relies too heavily on how big the numbers are and not how workable the numbers are. Further, he seems to think that it will all just implode, which is pretty unlikely. AI companies are making money. 1T in purchase negotiations is something that can be renegotiated if the numbers don't improve. And there's actually a pretty good chance that these AI companies sell the US federal government on AI being a strategic advantage which can ultimately gets a nice federal funding source. Even in the worst case of what ed predicts, the more likely outcome is that the AI companies slow rollouts and purchases. The general market takes a hit, but it's ultimately not the end of the world. But further, even with AI reducing their consumption, that doesn't mean chip manufacturers are hosed, we've already built up huge demand for things like RAM which are supremely supply constrained. That' has slowed the sale of consumer and enterprise electronics. Easing back on the AI market means those markets will likely pick up the slack again. Especially because I suspect businesses will be seriously thinking about things like "Why don't we deploy deepseek locally to save on compute cost?". I suspect that prices for AI will ultimately increase before any of this happens and with those price increases that's where I can see there being more a demand to break ties with the bigger AI companies. What Ed misses is that big business has much MUCH more flexibility when it comes to financing than even a midsize corperation. They have direct lines to bank presidents.
  - CoolestBeans 2mo ago
    I agree the issue is not the scale but you're missing the reason the scale has allowed to inflate to these proportions is through purchase agreements that are enabled by other purchase agreements. Yes banks, other funders, and even the cash flow of the largest companies can provide lifelines, but why would they if the pullback begins? The problem with circular purchase agreements is the mechanism that allowed them to grow rapidly would also force them to shrink rapidly and most funders aren't going to want to catch that falling knife unless profit is near guaranteed, which it isn't. The numbers are still deeply in the world of speculative. Doesn't matter if you have a line to a bank president, they don't want to bail you out for free. The point is that the numbers as they exist now require the industry to shoot the moon. It's not impossible, maybe the technology really is that revolutionary. But the margin for error is microscopic.
npilk 2mo ago
Ctrl-F “amortiz”: Not Found Microsoft’s total depreciation and amortization in Q2 2027 was $11B - not clear how much of this is AI related. Apparently they had $34B in AI ARR as of May. So let’s say their AI capex amortization and revenue are about equal. Not amazing, obviously they’re relying on continued growth, but doesn’t seem like the end of the world? Compare that to Ed’s framing - Microsoft has $34B in revenue but spent $116B in capex last year to “make it”. They’re doomed! But that capex spend is to make future revenue. Clearly he assumes demand won’t increase in the future, and that future projected revenue is “fake”. And sure, it definitely might not increase enough to make profitability. But his whole analysis hinges on that one assumption. The entire article, all the numbers he gish gallops at you, could basically be replaced with “I don’t think AI demand and revenue will increase much beyond today.” Yeah, we know.
- ofjcihen 2mo ago
  So where would this increased demand come from? We see that these companies have no moat. We see that companies are already balking at the cost and are increasingly looking at what the actual return of their current spend is, let alone when these prices have been increasing. Where is the increase in demand going to be coming from? Especially the increase needed to make this make sense?
  - npilk 2mo ago
    My personal hunch is that the “diffusion curve” for AI is slower than most people in this space think. Most businesspeople I talk to have only tried a basic Copilot chat and/or free ChatGPT. Many still haven’t used anything “AI” at all. As more use cases become practicable and cost-effective, more software will include AI, and more people will use AI with or without knowing. Also: note that the Wall Street analyst estimates Ed cites (and then declares impossible targets) are predictions by serious people with a lot of money at stake. Of course they could be wrong, but they’re not made up.
    - cogman10 2mo ago
      > Also: note that the Wall Street analyst estimates Ed cites (and then declares impossible targets) are predictions by serious people with a lot of money at stake. I think Ed is wrong. But I have to push back. Wall street analysts are more likely to misrepresent precisely because they have money at stake. Much like ed has a pretty vested interest in saying the sky is falling (that's his brand at this point) the analysts have vested interests in saying everything is fine and keep investing. We can see similar behaviors with analysts like zero hedge, which every week write a new "the bubble is about to pop" article. A lot of this, IMO, is similar to a fact about the weather I'm probably misremember from stats. If you always predict "it will be sunny tomorrow" almost anywhere in the world you'll be right something like 80 to 90% of the time (citation needed). Analysts who always say "things are great and stocks will go up" will be right most of the time. The tricky thing has always been predicting when and if a pop will happen.
shiandow 2mo ago
I get the feeling the author had a very simple and clear idea and then spent a lot of time fumbling about trying to present it clearly. At one point I'm pretty sure there are six paragraphs shortly after each other that are all trying to restate the paragraphs before it. Since nothing seemed to become much clearer I kind of gave up at that point.
- ofjcihen 2mo ago
  This seems to be the standard response to Ed’s work. He presents facts and figures that backup his theories in a painstaking manner and then detractors reply with something like this. Following HNs guidelines, my most charitable interpretation of your response is that you don’t understand the arguments or numbers behind them and you aren’t just dismissing the arguments because you don’t like them. For that I’m saying you need to feed the article to the LLM of your choice and work back and forth until you get to an understanding of what’s being argued.
  - bbor 2mo ago
    A simpler answer to why people always accuse him of being a bad writer is that he’s a bad writer, not that they’re too dumb for his genius. > For that I’m saying you need to feed the article to the LLM of your choice Ahh, the daily cry of the AntiAI crusader. Pretty fun to see it over here, tho! Usually it’s confined to reddit and bsky.
  - minimaxir 2mo ago
    > Following HNs guidelines, my most charitable interpretation of your response is that you don’t understand the arguments or numbers behind them and you aren’t just dismissing the arguments because you don’t like them. For that I’m saying you need to feed the article to the LLM of your choice and work back and forth until you get to an understanding of what’s being argued. That definitely does not follow HN guidelines.
  - shiandow 2mo ago
    You can call it painstaking but I mostly found it painful to read. I mean you don't need that much text or numbers to argue most of the AI hardware spend seems driven by two companies, who likely need to spend more next year to match projected growth. But then there's a lot of repetition and calling those two companies unprofitable and unsustainable, which I really hoped he would expand upon but he didn't get that far before I gave up.
bbor 2mo ago
The use of this phrase by the science denial side of this debate is, so infuriating that I must simply end my comment here. Look up, Ed. I know you know.

61 points by thelastgallon 2mo ago

> The other problem is the monstrous and abusive marketing campaign from the AI industry itself, and those who use AI on a regular basis. If you are against the consensus that AI will grow ever-larger every single quarter forever, you will be harassed and dogpiled across multiple social media platforms by everyone from AI influencers to actual journalists. The fact that it’s more professionally dangerous to critique the powerful than it is to align with them is disgusting, but I should be clear that these tactics only reinforce that I’m on the right track. > As Nik Suresh noted in his recent piece, refusing to say that AI is giving you massive productivity benefits will lead to actual professional consequences, because so much is riding on the overall grift about what AI can do (which is much, much less than the boosters will promise). This runs antithetical to productivity or good sense, and everybody involved in it should be both eternally shamed and shunned from any sensible business. > And while the AI industry and its fandom will claim that people like me are “skeptics” and “haters,” the outright hatred and vitriol that they spew for not falling in line behind a nakedly false narrative built on outright disinformation is disgraceful. sigh

MrDrMcCoy 2mo ago
Whether wrong or profound, it probably deserves a bit of actual discourse.
- minimaxir 2mo ago
  The most charitable way I can read those paragraphs is that he's vaguely alluding to a nebulous conspiracy by a cabal of elites, which evokes a specific ideology that cannot be discussed constructively. Ed has repeatedly done the "why are people using LLMs?" bit but ignores what well-respected software engineers have actually said about them because he thinks they're AI boosters and they are just lying. At the least, it's an obvious blind spot to explain how the AI industry is what it is despite the numbers he reports arguing otherwise, and many of his industry trend predictions have been incorrect as a direct result.
  - crote 2mo ago
    > a nebulous conspiracy by a cabal of elites You are reading way too much into it. The truth is far simpler: when someone's salary depends on AI being a success, you'll have a really hard time getting them to openly say anything negative about AI. A huge portion of those "well-respected software engineers" work at companies which have pivoted to make AI an essential part of their strategy - because every company has. We're seeing companies where leadership explicitly says that anyone not enthusiastically making AI a core part of their workflow will get fired. It is literally forbidden to doubt AI. Want a promotion? Better start tokenmaxxing - your manager will be looking at your usage stats! And it's going to be the same at the higher levels. A "CTO of $company says $100M AI investment was a massive waste" headline is obviously unacceptable. You've already burned the money, so why ruin your stock price by being "the only company too incompetent to properly use AI" rather than slowly and silently scaling it down while pretending everything is fine and parroting all the buzzwords your peers are using on LinkedIn? The actual results are irrelevant. It does not matter if your AI results are mediocre, or "good in some edge cases", or "can speed up some easier work". The market has decided that AI is huge and a massive success, so anyone not adopting it and having extreme successes with it is a failure and will be punished. There's no need to invent a conspiracy here. Simple self-preservation will do.
    - fragmede 2mo ago
      Ah, yes. Because someone owns NVDA in their retirement account, they're going to intellectually bankrupt themselves and totally lie about being able to use an LLM to generate code feels faster than writing it manually. No conspiracy at all!
      - ragall 2mo ago
        This isn't a conspiracy, which requires coordination between the co-conspirators: it's just old-fashioned common interest in propping up a bubble.
  - disgruntledphd2 2mo ago
    > The most charitable way I can read those paragraphs is that he's vaguely alluding to a nebulous conspiracy by a cabal of elites, which evokes a specific ideology that cannot be discussed constructively. If the markets/finance people reward you for saying you are all-in on AI, people with much of their compensation dependent on the markets (i.e. executives) will claim that AI is driving amazing results. Like, I find AI useful in lots of places and use these tools daily, but I don't see how the pure play model companies can deliver a good return for their investors. Unlike ed though, I do think that we'll find good uses for all the compute and (hopefully) the energy infrastructure being built out for this compute.

ofjcihen 2mo ago

Again, Zitron provides the numbers for his theories and they’re very compelling. I’m still not seeing any equally compelling arguments as to why this is not the case. Only accusations of doomerism and links to him calling the bubble collapse early.

cogman10 2mo ago
> I’m still not seeing any equally compelling arguments as to why this is not the case. Zitron relies too heavily on how big the numbers are and not how workable the numbers are. Further, he seems to think that it will all just implode, which is pretty unlikely. AI companies are making money. 1T in purchase negotiations is something that can be renegotiated if the numbers don't improve. And there's actually a pretty good chance that these AI companies sell the US federal government on AI being a strategic advantage which can ultimately gets a nice federal funding source. Even in the worst case of what ed predicts, the more likely outcome is that the AI companies slow rollouts and purchases. The general market takes a hit, but it's ultimately not the end of the world. But further, even with AI reducing their consumption, that doesn't mean chip manufacturers are hosed, we've already built up huge demand for things like RAM which are supremely supply constrained. That' has slowed the sale of consumer and enterprise electronics. Easing back on the AI market means those markets will likely pick up the slack again. Especially because I suspect businesses will be seriously thinking about things like "Why don't we deploy deepseek locally to save on compute cost?". I suspect that prices for AI will ultimately increase before any of this happens and with those price increases that's where I can see there being more a demand to break ties with the bigger AI companies. What Ed misses is that big business has much MUCH more flexibility when it comes to financing than even a midsize corperation. They have direct lines to bank presidents.
- CoolestBeans 2mo ago
  I agree the issue is not the scale but you're missing the reason the scale has allowed to inflate to these proportions is through purchase agreements that are enabled by other purchase agreements. Yes banks, other funders, and even the cash flow of the largest companies can provide lifelines, but why would they if the pullback begins? The problem with circular purchase agreements is the mechanism that allowed them to grow rapidly would also force them to shrink rapidly and most funders aren't going to want to catch that falling knife unless profit is near guaranteed, which it isn't. The numbers are still deeply in the world of speculative. Doesn't matter if you have a line to a bank president, they don't want to bail you out for free. The point is that the numbers as they exist now require the industry to shoot the moon. It's not impossible, maybe the technology really is that revolutionary. But the margin for error is microscopic.

npilk 2mo ago

Ctrl-F “amortiz”: Not Found Microsoft’s total depreciation and amortization in Q2 2027 was $11B - not clear how much of this is AI related. Apparently they had $34B in AI ARR as of May. So let’s say their AI capex amortization and revenue are about equal. Not amazing, obviously they’re relying on continued growth, but doesn’t seem like the end of the world? Compare that to Ed’s framing - Microsoft has $34B in revenue but spent $116B in capex last year to “make it”. They’re doomed! But that capex spend is to make future revenue. Clearly he assumes demand won’t increase in the future, and that future projected revenue is “fake”. And sure, it definitely might not increase enough to make profitability. But his whole analysis hinges on that one assumption. The entire article, all the numbers he gish gallops at you, could basically be replaced with “I don’t think AI demand and revenue will increase much beyond today.” Yeah, we know.

ofjcihen 2mo ago
So where would this increased demand come from? We see that these companies have no moat. We see that companies are already balking at the cost and are increasingly looking at what the actual return of their current spend is, let alone when these prices have been increasing. Where is the increase in demand going to be coming from? Especially the increase needed to make this make sense?
- npilk 2mo ago
  My personal hunch is that the “diffusion curve” for AI is slower than most people in this space think. Most businesspeople I talk to have only tried a basic Copilot chat and/or free ChatGPT. Many still haven’t used anything “AI” at all. As more use cases become practicable and cost-effective, more software will include AI, and more people will use AI with or without knowing. Also: note that the Wall Street analyst estimates Ed cites (and then declares impossible targets) are predictions by serious people with a lot of money at stake. Of course they could be wrong, but they’re not made up.
  - cogman10 2mo ago
    > Also: note that the Wall Street analyst estimates Ed cites (and then declares impossible targets) are predictions by serious people with a lot of money at stake. I think Ed is wrong. But I have to push back. Wall street analysts are more likely to misrepresent precisely because they have money at stake. Much like ed has a pretty vested interest in saying the sky is falling (that's his brand at this point) the analysts have vested interests in saying everything is fine and keep investing. We can see similar behaviors with analysts like zero hedge, which every week write a new "the bubble is about to pop" article. A lot of this, IMO, is similar to a fact about the weather I'm probably misremember from stats. If you always predict "it will be sunny tomorrow" almost anywhere in the world you'll be right something like 80 to 90% of the time (citation needed). Analysts who always say "things are great and stocks will go up" will be right most of the time. The tricky thing has always been predicting when and if a pop will happen.

shiandow 2mo ago

I get the feeling the author had a very simple and clear idea and then spent a lot of time fumbling about trying to present it clearly. At one point I'm pretty sure there are six paragraphs shortly after each other that are all trying to restate the paragraphs before it. Since nothing seemed to become much clearer I kind of gave up at that point.

ofjcihen 2mo ago
This seems to be the standard response to Ed’s work. He presents facts and figures that backup his theories in a painstaking manner and then detractors reply with something like this. Following HNs guidelines, my most charitable interpretation of your response is that you don’t understand the arguments or numbers behind them and you aren’t just dismissing the arguments because you don’t like them. For that I’m saying you need to feed the article to the LLM of your choice and work back and forth until you get to an understanding of what’s being argued.
- bbor 2mo ago
  A simpler answer to why people always accuse him of being a bad writer is that he’s a bad writer, not that they’re too dumb for his genius. > For that I’m saying you need to feed the article to the LLM of your choice Ahh, the daily cry of the AntiAI crusader. Pretty fun to see it over here, tho! Usually it’s confined to reddit and bsky.
- minimaxir 2mo ago
  > Following HNs guidelines, my most charitable interpretation of your response is that you don’t understand the arguments or numbers behind them and you aren’t just dismissing the arguments because you don’t like them. For that I’m saying you need to feed the article to the LLM of your choice and work back and forth until you get to an understanding of what’s being argued. That definitely does not follow HN guidelines.
- shiandow 2mo ago
  You can call it painstaking but I mostly found it painful to read. I mean you don't need that much text or numbers to argue most of the AI hardware spend seems driven by two companies, who likely need to spend more next year to match projected growth. But then there's a lot of repetition and calling those two companies unprofitable and unsustainable, which I really hoped he would expand upon but he didn't get that far before I gave up.

bbor 2mo ago

The use of this phrase by the science denial side of this debate is, so infuriating that I must simply end my comment here. Look up, Ed. I know you know.