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Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

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Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#51

Post by whimsicalism »

disgruntledphd2 wrote: post #37
whimsicalism wrote: post #22

Earlier quoted context omitted.

Monetizing a debt of this magnitude would be disastrous, but agreed this appears to be the path we are going on by default - given that we are consistently above the inflation mandate yet still lowering rates. It's no longer the early 20th, there are other competitive & well-run jurisdictions for creditors to dump their money in if they lose faith in the US.

> It's no longer the early 20th, there are other competitive & well-run jurisdictions for creditors to dump their money in if they lose faith in the US. Where, pray tell are these competitive and well-run jurisdictions? China has capital controls so that probably won't work. The EU might work if they ever get their sh*t together and centralise their bonds and markets, otherwise no. Like, I too believe that the US is…

I think there are many smaller jurisdictions that are getting their shit together and might absorb demand - southeast Asia, Singapore obviously (but small), the Gulf. Some subsets of the EU, particularly Eastern Europe.

Plus, even worse-run higher yield jurisdictions become more appealing as the US fails.

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#52

Post by Pxtl »

whimsicalism wrote: post #13
Pxtl wrote: post #7

Seems obvious. AI is useful. But it's not trillion-dollars useful, and it probably won't be.

Why is that obvious? Even with effectively complete stagnation and just existing technology + limited RLVR, I can see how this could be trillion-dollars level useful.

I can't think of any tech with this kind of crazy yearly investment in infrastructure with no success stories.

Maybe it's because I find writing easy, but I find the text generation broadly useless except for scamming. The search capabilities are interesting but the falsehoods that come from LLM questions undermine it.

The programming and visual art capabilities are most impressive to me... but where's the companies making killings on those? Where's the animation studio cranking out Pixar-quality movies as weekly episodes?

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#53

Post by lm28469 »

whimsicalism wrote: post #13
Pxtl wrote: post #7

Seems obvious. AI is useful. But it's not trillion-dollars useful, and it probably won't be.

Why is that obvious? Even with effectively complete stagnation and just existing technology + limited RLVR, I can see how this could be trillion-dollars level useful.

Where is all the productivity ? Everyone says they became a 100x employee thanks to LLMs yet not one company has seen any out of the ordinary growth or profit besides AI hyped companies.

What if the amount of slop generated counteracts the amount of productivity gained ? For every line of code it writes it also writes some BS paragraph in a business plan, a report, &c.

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#54

Post by marbro »

CraigJPerry wrote: post #24
whimsicalism wrote: post #14

AI is a risk. The thing we know is going to bite us in the butt is our continued massive sovereign debt burden and lack of any political will whatsoever to either increase taxes or reduce spending. The dollar is not going to do well this century and creditors confidence is already starting to decline. In fact, the further we go into debt - the more we are implicitly betting our society on an AI hail mary.

>> sovereign debt burden So all the entities that want to hold the debt (social security administration, mutual funds, pension funds etc) where should they go instead? Riskier assets is what you're saying right? Is that a great idea?

All investors should choose gold over the dollar because paper money is always debased. Organizations like Apple, Microsoft, and Google bought government bonds 10 years ago when the price of gold was $1100 and have watched their investments erode while gold has increased to $4000.

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#56

Post by lm28469 »

whimsicalism wrote: post #36
an0malous wrote: post #31

Earlier quoted context omitted.

The existing technology can’t even replace customer support systems, which seems like the lowest bar for a role that’s perfectly well suited to LLMs. How are you justifying the trillion dollar value?

I think with a bit of engineering, the existing tech can replace customer support systems - especially as the boomers are going away. But I realize this is an uphill battle on HN

> I think with a bit of engineering, the existing tech can replace customer support system

That's the lowest of the low and even you accept it doesn't work (yet), how can LLMs be worth 50% of the last years of gdp growth if it's that bad. Do you think customer support represents 50% of newly created value ? I bet it isn't event .5%

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#57

Post by kragen »

throwacct wrote: post #27

This is fair. We're now evaluating open-source LLMs to develop our in-house solutions, adding them to our products and services. As soon as they released the models, the moat was, depending on the context, somewhat gone.

Which models have you found most valuable? Are they still worse than the proprietary ones?

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#58

Post by ghaff »

Esophagus4 wrote: post #48
ghaff wrote: post #39

Earlier quoted context omitted.

One can be skeptical about the overall value of various technologies while also being conservative about specific bets in specific timeframes against them.

I think you’re making my point without realizing it. If you are skeptical but also not willing to place a bet, you shouldn’t say “AI is overvalued” because you don’t actually believe it. You should say, “I think it might be overvalued, but I’m not really sure? And I don’t have enough experience in markets or confidence to make a bet on it, so I will go with everyone else’s sentiment and make the ‘safe’ bet of being l…

Not at all. I may think $TECH is overvalued but some companies may well make it out the other side, some aspects of the $TECH may play out (or not), and the bubble may pop in 1 year or 5. So the sensible process may be to invest in broader indexes and let things play out at the more micro level (that may not be possible to invest in anyway).

I certainly had unease about the dot-com market and should have shifted more investments to the conservative side. But I made the "‘safe’ bet of being long the market" even after things started going south.

FWIW, I do think AI is overvalued for the relatively near term. But I'm not sure what to do about that other than being fairly conservatively invested which makes sense for me at this point anyway.

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#59

Post by Pxtl »

whimsicalism wrote: post #36
an0malous wrote: post #31

Earlier quoted context omitted.

The existing technology can’t even replace customer support systems, which seems like the lowest bar for a role that’s perfectly well suited to LLMs. How are you justifying the trillion dollar value?

I think with a bit of engineering, the existing tech can replace customer support systems - especially as the boomers are going away. But I realize this is an uphill battle on HN

But the point is the tech obviously isn't there yet. LLMs are still too prone to giving falsehoods and in that case a raw text-search of the support DB would be more useful anyways.

Maybe if companies would wire up their "oh a customer is complaining try and talk them out of canceling their account offer them a mild discount in exchange for locking in for a year contract" API to the LLM? Okay, but that's not a trillion-dollar service.

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#60

Post by BenFranklin100 »

Current valuations are based on the belief genuine AGI is around the corner. It’s not. LLMs are an interesting technology with many use cases, but they can’t reason in the usual sense of the word and are a dead end for the type of AGI needed to justify current investments.

It’s going to be a gruesome train wreck.

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