Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

ft.com

Post reply on HN
Print view View original

61–70 of 192 posts

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

#61

Post by gjsman-1000 »

alphazard wrote: post #29
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.

> either increase taxes or reduce spending I see this sentiment a lot, they are not equivalent. The US must reduce spending, if it wants to protect the dollar. Tax increases may also help. The relationship between tax rates, GDP, government revenue, the market value of new US debt, and the value of the dollar, is complicated and depends on uncertain estimates and models of the economy. Increasing taxes can reduce GDP…

> Tax increases may also help.

I don't live in a costal state, but when I do consulting work typically at charity rates alongside my standard full-time job, I have to pay 24% federal tax, 15.3% FICA, and 7.85% state tax. I am already taxed whenever I want to help anyone at 47.15%. That's before the required tax structures and consulting for doing all the invoicing legally. God himself only wanted 10%, so it seems a government playing God is awfully expensive.

You can't raise taxes any further before I'm done, and I don't think I'm alone, businesses and consultants are already crushed in taxes. I have to bill $40K to hopefully take home $20K; at which point, is it even worth my time? But if I don't consult because it isn't worth it, are small businesses suddenly going to afford an agency or a dedicated software developer? Of course not, so their growth is handicapped, and I wonder what the effects of that tax-wise are.

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

#62

Post by regularfry »

an0malous wrote: post #40
estomagordo wrote: post #17

Earlier quoted context omitted.

What's a sign it's going to happen ever?

I used to believe in AGI but the more AI has advanced the more I’ve come to realize that there’s no magic level of intelligence that can cure cancer and figure out warp drives. You need data, which requires experimentation, which requires labor and resources of which there is a finite supply. If you had AGI tomorrow and asked it to cure cancer, it would just ask for more experimental data and resources. Isn’t that wh…

AGI isn't a synonym for smarter-than-human.

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

#63

Post by vuggamie »

Esophagus4 wrote: post #45
bartlettD wrote: post #42

Earlier quoted context omitted.

Have you ever heard that "the market can stay irrational longer that you can stay solvent"? The thing about bubbles is, you can often easily spot them, but can't so easily say when they'll pop.

No. Then you haven’t spotted a bubble. You’ve just made a comment that “wow, things are going up!” That’s not spotting bubble, that’s my non-technical uncle commenting at a dinner party, “wow this bitcoin thing sure is crazy huh?” Talk is cheap. You learn what someone really believes by what they put their money in. If you really believe we’re in a bubble, truly believe it based on your deep understanding of the mark…

I truly believe we are in a bubble. I truly believe that AI will exist on the other side of that bubble, just as internet companies and banks existed on the other side of the dotcom crash and the housing crisis.

I don't know how to invest to avoid this bubble. My money is where my mouth is. My investments are conservative and long-term. Most in equity index funds, some bonds, Vanguard mutual funds, a few hand-picked stocks.

No interest in shorting the market or trying to time the crash. I would say I 90% believe a correction of 25% or more will happen in the next 12 months. No idea where my money might be safe. Palantir? Northrup Grumman?

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

#64

Post by whimsicalism »

gjsman-1000 wrote: post #61
alphazard wrote: post #29

Earlier quoted context omitted.

> either increase taxes or reduce spending I see this sentiment a lot, they are not equivalent. The US must reduce spending, if it wants to protect the dollar. Tax increases may also help. The relationship between tax rates, GDP, government revenue, the market value of new US debt, and the value of the dollar, is complicated and depends on uncertain estimates and models of the economy. Increasing taxes can reduce GDP…

> Tax increases may also help. I don't live in a costal state, but when I do consulting work typically at charity rates alongside my standard full-time job, I have to pay 24% federal tax, 15.3% FICA, and 7.85% state tax. I am already taxed whenever I want to help anyone at 47.15% . That's before the required tax structures and consulting for doing all the invoicing legally. God himself only wanted 10%, so it seems a…

You're talking about your marginal rate and we simply are far to the left on the laffer curve, raising taxes will raise revenue. I'm not unsympathetic, my marginal is close to the same - but generally I think people's claims that they will stop working are generally more bark than bite and the evidence largely backs that up.

If you don't want a tax-based solution, I do hope you are agitating for SS and medicare cuts.

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

#65

Post by lm28469 »

NoMoreNicksLeft wrote: post #35
estomagordo wrote: post #17

Earlier quoted context omitted.

What's a sign it's going to happen ever?

Humans. There are arrangements of atoms that if constructed and activated, act perfectly like human intelligence. Because they are human intelligence. Human intelligence must be deterministic, any other conclusion is equivalent to the claim that there is some sort of "soul" for lack of better term. If human intelligence is deterministic, then it can be written in software. Thus, if we continue to strive to design/cre…

> Thus, if we continue to strive to design/create/invent such, it is inevitable that eventually it must happen.

~200 years of industrial revolution and we already fucked up beyond the point of no return, I don't think we'll have resources to continue on this trajectory for 1m years. We might very well be accelerating towards a brick wall, there is absolutely no guarantee we'll hit AGI before hitting the wall

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

#66

Post by Pxtl »

whimsicalism wrote: post #26
Delphiza wrote: post #20

Earlier quoted context omitted.

It is the financial risk that is obvious. The big players are struggling to show meaningful revenue from the investment. Because the investment is so high, the revenue numbers need to be equally high, and growing fast. The 'correction' is when (ok, if) the markets realise that the returns aren't there. The worldwide risk is that AI-led growth has been a large chunk of the US stock market growth. If it 'corrects' US g…

I think we have only scratched the surface of what we can do with the existing technology. A much more present risk from stagnation IMO is that if we stagnate, it is almost certain that the value of the tech will not be able to be enclosed /captured by its creators.

Imho it will take off in animation/illustration as soon as Adobe (or some competitor) figures out how to make good tooling for artists. Not for idiot wantrepeneurs who want to dump fully-generated-slop onto Amazon, but so that a person can draw rough pencil sketches and storyboards and reference character sheets and get back proper illustrations. Basically, don't replace the penciler but replace the inker and the colourist (and, in animation, the in-betweener).

That's more of a UI problem than a limitation in Diffusion tech.

That's a customer who'll pay, it might be worth a lot. But a $trillion per year?

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

#67

Post by johnny_canuck »

Scott Galloway had a podcast episode about this topic just over a week ago. https://www.youtube.com/watch?v=Oeepx2ZLrCA

I used to scoff at the idea of the AI-bubble (or any recently called-for tech bubble) being like the 90s given the way technology/the internet is now so integrated into our lives, but the way he spelled it out it does seem similar.

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

#68

Post by jf22 »

lm28469 wrote: post #53
whimsicalism wrote: post #13

Earlier quoted context omitted.

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.

How are you evaluating the phrase "yet not one company?"

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

#69

Post by kranke155 »

Pxtl wrote: post #52
whimsicalism wrote: post #13

Earlier quoted context omitted.

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…

The animation stuff is about to happen but not there yet.

I work in the industry and I know that ad agencies are already moving onto AI gen for social ads.

For VFX and films the tech is not there yet, since OpenAI believes they can build the next TikTok on AI (a proposition being tested now) and Google is just being Google - building amazing tools but with little understanding (so far) of how to deploy them on the market.

Still Google is likely ahead in building tools that are being used (Nano Banana and Veo 3) while the Chinese open source labs are delivering impressive stuff that you run locally or increasingly on a rented H100 on the cloud.

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

#70

Post by jf22 »

Pxtl wrote: post #52
whimsicalism wrote: post #13

Earlier quoted context omitted.

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…

You can easily google "generative AI success stories" and read about them.

There are always a few comments that make it seem like LLMs have done nothing valuable despite massive levels of adoption.

Post reply on HN