I've been talking about the limited bandwidth of investors as a major problem with capital allocation for some time so it's good to see this idea acknowledged in this context. This problem will only get bigger and more obvious with increasing inequality. It is massive scale capital misallocation whereby the misallocation yields more nominal ROI than optimal allocation (if you were to consider real economic value and not numbers in dollars). Facilitated by the design of the monetary system as the value of dollars is kept decoupled from real economic value due to filter bubbles and dollar centralization.
How the AI Bubble Will Pop
81–90 of 531 posts
Re: How the AI Bubble Will Pop
#82Earlier quoted context omitted.
Where's the business value? Right now it doesn't really exist, adoption is low to nonexistent outside of programming and even in programming it's inconclusive as to how much better/worse it makes programmers. I have a friend who works at PwC doing M&A. This friend told me she can't work without ChatGPT anymore. PwC has an internal AI chat implementation. Where does this notion that LLMs have no value outside of progr…
The recent MIT report on the state of AI in business feels relevant here [0]: > Despite $30–40 billion in enterprise investment into GenAI, this report uncovers a surprising result in that 95% of organizations are getting zero return. There's no doubt that you'll find anecdotal evidence both for and against in all variations, what's much more interesting than anecdotes is the aggregate. [0] https://mlq.ai/media/quart…
No. The aggregate is useless. What matters is the 5% that have positive return.
In the first few years of any new technology, most people investing it lose money because the transition and experimentation costs are higher than the initial returns.
But as time goes on, best practices emerge, investments get paid off, and steady profits emerge.
Re: How the AI Bubble Will Pop
#83I think these articles slightly miss the point.
Sure, AI as a tool, as it currently is, will take a very long time to earn back the $B being invested.
But what if someone reaches autonomous AGI with this push?
Everything changes.
So I think there's a massive, massive upside risk being priced into these investments.
Re: How the AI Bubble Will Pop
#84Earlier quoted context omitted.
So just the “it’s different this time” mentality shared by all bubbles. Some things never change.
The final AI push that doesn't lead to a winter will look like a bubble until it hits. We're realistically ~3 years away from fully autonomous software engineering (let's say 99.9% for a concrete target) if we can shift some research and engineering resources towards control, systems and processes. The economic value of that is hard to overstate.
> We're realistically ~3 years away from fully autonomous software engineering
We had Waymo cars about 18 years ago, and only recently they started to roll out commercially. Just saying.
Re: How the AI Bubble Will Pop
#85The most frustrating thing to me about this most recent rash of biz guy doubting the future of AI articles is the required mention that AI, specifically an LLM based approach to AGI, is important even if the numbers don't make sense today. Why is that the case? There's plenty of people in the field who have made convincing arguments that it's a dead end and fundamentally we'll need to do something else to achieve AGI…
FWIW Derek Thompson (the author of this blogpost) isn't exactly a 'business guy'
If I'm not mistaken he's working with Ezra Klein to push the Democrats to embrace racism instead of popular economic measures.
Edit: I expect that these guys will try to make a J.D. Vance style Republican pivot in the next 4-8 years.
Second Edit:
Ezra Klein's recent interview with Ta-Nehisi Coates is very specifically why I expect he will pivot to being a Republican in the near future.
Listen closely. Ezra Klein will not under any circumstances utter the words "Black People".
Again and again, Coates brings up issues that Black People face in America, and Klein diverts by pretending that Coates is talking about Marginalized Groups in general or Trans People in particular.
Klein's political movement is about eradicating discussion of racial discrimination from the Democratic party.
Third Edit:
@calmoo: I think you're not listening to the nuances of my opinion, and instead having an intense emotional reaction to my well-justified claims of racism.
Re: How the AI Bubble Will Pop
#86Earlier quoted context omitted.
What makes you think we'll have fusion reactors in the 21st century?
I don’t think we’ll have the choice.
> I like fusion, really. I’ve talked to some of luminaries that work in the field, they’re great people. I love the technology and the physics behind it.
> But fusion as a power source is never going to happen. Not because it can’t, because it won’t. Because no matter how hard you try, it’s always going to cost more than the solutions we already have.
https://matter2energy.wordpress.com/2012/10/26/why-fusion-wi...
Re: How the AI Bubble Will Pop
#87> Some people think artificial intelligence will be the most important technology of the 21st century. I don’t, I think a workable fusion reactor will be the most important technology of the 21st century.
We'll finally have electricity that's too cheap to meter.
As we have more and more solars, we see rises for being connected to the grid more and more while electricity stays relatively cheap. Fusion won't change that, somebody has to pay for the guy reconnecting cables after a storm
Re: How the AI Bubble Will Pop
#88It reminds me what I said to somebody recently: All my friends and family are using the free version of ChatGPT or something similar. They will never pay (although they have enough money to do so). Even in my very narrow subjective circles it does not add up. Who pays for AI and how? And when in the future?
People are always so fidegty about this stuff — for super understandable reason, to be clear. People not much smarter than anyone else try to reason about numbers that are hard to reason about.
But unless you have the actual numbers, I always find it a bit strange to assume that all people involved, who deal with large amounts of money all the time, lost all ability to reason about this thing. Because right now that would mean at minimum: All the important people at FAANG, all the people at OpenAI/Anthropic, all the investors.
Of course, there is a lot of uncertainty — which, again, is nothing new for these people. It's just a weird thing to assume that.
Re: How the AI Bubble Will Pop
#89The most frustrating thing to me about this most recent rash of biz guy doubting the future of AI articles is the required mention that AI, specifically an LLM based approach to AGI, is important even if the numbers don't make sense today. Why is that the case? There's plenty of people in the field who have made convincing arguments that it's a dead end and fundamentally we'll need to do something else to achieve AGI…
> adoption is low to nonexistent outside of programming In the last few months, every single non-programmer friend I've met has ChatGPT installed on their phone (N>10). Out of all the people that I know enough to ask if they have ChatGPT installed, there is only one who doesn't have it (my dad). I don't know how many of them are paying customers though. IIRC one of them was using ChatGPT to translate academic writing…
I’ve been trying out locally run models on my phone. The iPhone 17 is able to run some pretty nice models, but they lack access to up to date information from the web like ChatGPT has. Wonder if some company like Kagi would offer some api to let your local model plug in and run searches.
Re: How the AI Bubble Will Pop
#90The most frustrating thing to me about this most recent rash of biz guy doubting the future of AI articles is the required mention that AI, specifically an LLM based approach to AGI, is important even if the numbers don't make sense today. Why is that the case? There's plenty of people in the field who have made convincing arguments that it's a dead end and fundamentally we'll need to do something else to achieve AGI…
Where's the business value? Right now it doesn't really exist, adoption is low to nonexistent outside of programming and even in programming it's inconclusive as to how much better/worse it makes programmers. I have a friend who works at PwC doing M&A. This friend told me she can't work without ChatGPT anymore. PwC has an internal AI chat implementation. Where does this notion that LLMs have no value outside of progr…
> This friend told me she can't work without ChatGPT anymore.
This isn't a sign that ChatGPT has value as much as it is a sign that this person's work doesn't have value.