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How the AI Bubble Will Pop

derekthompson.org

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Re: How the AI Bubble Will Pop

#141

Post by [deleted] »

bakugo wrote: post #90
aurareturn wrote: post #11

Earlier 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…

> 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.

[deleted]

Re: How the AI Bubble Will Pop

#142

Post by maeln »

cornholio wrote: post #64
hemloc_io wrote: post #7

The 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…

It's silly to say that the only objective that will vindicate AI investments is AGI. Current batch of deep learning models are fundamentally a technology for labor automation. This is immensely useful in itself, without the need to do AGI. The Sora2 capabilities are absolutely wild (see a great example here of what non-professional users are already able to create with it: https://www.youtube.com/watch?v=HXp8_w3XzgU…

> Current batch of deep learning models are fundamentally a technology for labor automation. This is immensely useful in itself, without the need to do AGI. The Sora2 capabilities are absolutely wild (see a great example here of what non-professional users are already able to create with it: https://www.youtube.com/watch?v=HXp8_w3XzgU )

> So only looking at video capabilities, or at coding capabilities, it's already ready to automate and upend industries worth trillions in the long run.

Can Sora2 change the framing of a picture without changing the global scene ? Can it change the temperature of a specific light source ? Can it generate a 8k HDR footage suitable for re-framing and color grading ? Can it generate minute long video without loosing coherence ? Actually, can it generate a few seconds without having to reloop with the last frame and have these obnoxious cuts that the video you pointed has ? Can it reshoot the same exact scene with just one element altered ?

All the video models right now are only good at making short, low-res, barely post-processable video. The kind of stuff you see on social media. And considering the metrics on ai-generated video on social media right now, for the most part, nobody want to look at them. They might replace the bottom of the barrel of social media posting (hello cute puppy videos), but there is absolutely nothing indicating that they migth automate or upend any real industry (be used in the pipeline, yeah maybe, why not, automate ? Won't hold my breath).

And the argument of their future capabilities, well ... It's been 50+ years that we should have fusion in 20 years.

Btw, the same argument can be made for LLM and image-gen tech in any creative purposes. People severly underestimate just how much editing, re-work, purpose and pre-production steps are involved in any major creative endeavor. Most model are just severly ill suited for that work. They can be useful for some stuff (specificaly, for editing images, ai-driven image fill do work decently for exemple), but overall, as of right now, they are mostly good at making low quality content. Which is fine I guess, there is a market for it, but it was already a market that was not keen on spending money.

Re: How the AI Bubble Will Pop

#143

Post by Wowfunhappy »

jennyholzer wrote: post #85
calmoo wrote: post #69

Earlier quoted context omitted.

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…

We're very off topic, but if you're truly interested in Ezra Klein's worldview, I highly recommend his recent interview with Ta-Nehisi Coates. At minimum, I think you'll discover that Ezra's feelings are a lot more nuanced than you're making them out to be.

https://www.nytimes.com/2025/09/28/opinion/ezra-klein-podcas...

Re: How the AI Bubble Will Pop

#144

Post by lm28469 »

CuriouslyC wrote: post #10

I don't think it'll contract. The people dumping their money into AI think we are at end of days, new order for humanity type point, and they're willing to risk a large part of their fortune to ensure that they remain part of the empowered elite in this new era. It's an all hands on deck thing and only hard diminishing returns that make the AI takeoff story look implausible are going to cause a retrenchment.

It's probably exacerbated by the fact that everyone invest money now, I get daily ads from all my banking apps telling me to buy stocks and cryptos. People know they'll never get anywhere by working or saving, so they're more willing to gamble, high risk high reward, but they have nothing to lose

Re: How the AI Bubble Will Pop

#145

Post by uladzislau »

Calling this an “AI bubble” reads like pure sour grapes from folks who missed the adoption curve. Real teams are already banking gains - code velocity up, ticket resolution times down, and marketing lift from AI-assisted creative while capex always precedes revenue in platform shifts (see cloud 2010, smartphones 2007). The “costs don’t match cash flow” trope ignores lagging enterprise procurement cycles and the rapid glide path of unit economics as models, inference, and hardware efficiency improve. Habit formation is the moat: once workers rely on AI copilots, those workflows harden into paid seats and platform lock-in. We’re not watching a bubble pop; we’re watching infrastructure being laid for the next decade of products.

Re: How the AI Bubble Will Pop

#146

Post by alpineman »

jstummbillig wrote: post #63

> It’s not clear that firms are prepared to earn back the investment I am confused by a statement like this. Does Derek know why they are not? If hes does, I would love to hear the case (and no, comparisons to a random countries GDP are not an explanation). If he does not, I am not sure why we would not assume that we are simply missing something, when there are so many knowledgable players charting a similar course,…

It’s in the article. AI globally made 12bn USD of revenues in 2025, yet Capex next year is expected to be almost 50X that at 500bn USD

Re: How the AI Bubble Will Pop

#147

Post by xiphias2 »

donatj wrote: post #123

I feel kind of like a Luddite sometimes but I don't understand why EVERYONE is rushing to use AI? I use a couple different agents to help me code, and ChatGPT has largely replaced Google in my everyday use, but I genuinely don't understand the value proposition of every other companies offerings. I really feel like we're in the same "Get it out first, figure out what it is good for later" bubble we had like 7 years a…

Just you switching away from Google is already justifying 1T infrastructure spend.

Just think about how much more effective advertisements are going to be when LLMs start to tell you what to buy based on which advertiser gave the most money to the company.

Re: How the AI Bubble Will Pop

#148

Post by Cthulhu_ »

hemloc_io wrote: post #7

The 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…

Why would we want AGI? I've yet to read a convincing argument in favor (but granted, I never looked into it, I'm still at science-fiction doomerism). One thing that irks me is that people see it as inevitable, and that we have to pursue AGI because if we don't, someone else will. Or more bleak, if we don't actively pursue us, our malignant future AGI overlords will punish us for not bringing it into existence (roko's basilisk, the thing Musk and Grimes apparently bonded over because they're weird)

Re: How the AI Bubble Will Pop

#149

Post by ivape »

donatj wrote: post #123

I feel kind of like a Luddite sometimes but I don't understand why EVERYONE is rushing to use AI? I use a couple different agents to help me code, and ChatGPT has largely replaced Google in my everyday use, but I genuinely don't understand the value proposition of every other companies offerings. I really feel like we're in the same "Get it out first, figure out what it is good for later" bubble we had like 7 years a…

AI figured out something on my mind that I didn’t tell it about yesterday (latest Sonnet). My best advice to you is to spend time and allow the AI to blow your mind. Then you’ll get it.

Sometimes I sit in wonder at how the fuck it’s able to figure out that much intent without specific instructions. There’s no way anyone programmed it to understand that much. If you’re not blown away by this then I have to assume you didn’t go deep enough with your usage.

Re: How the AI Bubble Will Pop

#150

Post by emp17344 »

donatj wrote: post #123

I feel kind of like a Luddite sometimes but I don't understand why EVERYONE is rushing to use AI? I use a couple different agents to help me code, and ChatGPT has largely replaced Google in my everyday use, but I genuinely don't understand the value proposition of every other companies offerings. I really feel like we're in the same "Get it out first, figure out what it is good for later" bubble we had like 7 years a…

Agreed… I feel increasingly alienated because I don’t understand how AI is providing enough value to justify the truly insane level of investment.
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