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Google boss says AI investment boom has 'elements of irrationality'

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Re: Google boss says AI investment boom has 'elements of irrationality'

#11

Post by aurareturn »

watwut wrote: post #8
aurareturn wrote: post #4

Is it really a bubble about to burst when literally everyone is talking about AI being in a bubble and maybe bursting soon? To me, we're clearly not peak AI exuberance. AI agents are just getting started and getting so freaking good. Just the other day, I used Vercel's v0 to build a small business website for a relative in 10 minutes. It looked fantastic and very mobile friendly. I fed the website to ChatGPT5.1 and a…

> Is it really a bubble about to burst when literally everyone is talking about AI being in a bubble and maybe bursting soon? Yes, it is even one of necessary components. Everybody is twitchy afraid of the pop, but immediate returns are too tempting so they keep money in. The bubble pops when something happens and they all start to panicking at the same time. They all need to be sufficiently stressed for that mass ru…

So after the bubble pops, do you think the AI market will still be bigger in November 2025?

In other words, do you think we're in 1995 of the dotcom or 2000?

Re: Google boss says AI investment boom has 'elements of irrationality'

#13

Post by ido »

aurareturn wrote: post #10
camillomiller wrote: post #9

Earlier quoted context omitted.

This is a very biased example. Also, it is possible only because right now the tools you've used are heavily subsidised by investors' money. A LOT of it. Nobody questions the utility of what you just mentioned, but nodoby stops to ask if this would be viable if you were to pay the actual cost of these models, nor what it means for 99.9% of all the other jobs that AI companies claim can be automated, but in reality ar…

Why is it biased? So what if it's subsidized and companies are in market share grab? Is it going to cost $40 instead of $20 that I paid? Big deal. It still beats the hell out of $2k - $3k that it would have taken before and weeks in waiting time. 100x cheaper, 1000x faster delivery. Further more, v0 and ChatGPT together for sure did much better than the average web designer and copy writer. Lastly, OpenAI has already…

LLMs are particularly good at web development (granted that's a big market), probably due to a lot of the training material being that.

Re: Google boss says AI investment boom has 'elements of irrationality'

#14

Post by marcyb5st »

rvz wrote: post #5

Most of all of Big Tech, especially Google are doing just fine, making $100B a quarter. Startups and other unprofitable companies however...

After COVID they were still making a killing, but axed 12k people anyway. So, if someone starts doing layoffs and the market reacts well profitable companies will do layoffs as well

Re: Google boss says AI investment boom has 'elements of irrationality'

#17

Post by StopDisinfo910 »

aurareturn wrote: post #4

Is it really a bubble about to burst when literally everyone is talking about AI being in a bubble and maybe bursting soon? To me, we're clearly not peak AI exuberance. AI agents are just getting started and getting so freaking good. Just the other day, I used Vercel's v0 to build a small business website for a relative in 10 minutes. It looked fantastic and very mobile friendly. I fed the website to ChatGPT5.1 and a…

I think you are missing the fundamental point here. The question is not really if AI has some value. That much is obvious and the exemple you give, increasing developer productivity, is a good one.

The question is: is the value generated by AI aligned with the market projected value as currently priced in AI companies valuation? That's what's more difficult to assess.

The gap between fundamental financial data and valuations is very large. The risk is a brutal reassessment of these prices. That's what people call a bubble bursting and it doesn't mean the underlying technology has no value. The internet bubble burst yet the internet is probably the most significant innovation of the past twenty years.

Re: Google boss says AI investment boom has 'elements of irrationality'

#18

Post by qcnguy »

aurareturn wrote: post #10
camillomiller wrote: post #9

Earlier quoted context omitted.

This is a very biased example. Also, it is possible only because right now the tools you've used are heavily subsidised by investors' money. A LOT of it. Nobody questions the utility of what you just mentioned, but nodoby stops to ask if this would be viable if you were to pay the actual cost of these models, nor what it means for 99.9% of all the other jobs that AI companies claim can be automated, but in reality ar…

Why is it biased? So what if it's subsidized and companies are in market share grab? Is it going to cost $40 instead of $20 that I paid? Big deal. It still beats the hell out of $2k - $3k that it would have taken before and weeks in waiting time. 100x cheaper, 1000x faster delivery. Further more, v0 and ChatGPT together for sure did much better than the average web designer and copy writer. Lastly, OpenAI has already…

We don't know what AI should cost but if you look at the numbers then 2x more expensive is much too low.

Think about the pricing. OpenAI fixed everyone's prices to free and/or roughly the cost of a Netflix subscription, which in turn was pinned to the cost of a cable TV subscription (originally). These prices were made up to sound good to his friends, they weren't chosen based on sane business modelling.

Then everyone had to follow. So Anthropic launched Claude Code at the same price point, before realizing that was deadly and overnight the price went up by an order of magnitude. From $20 to $200/month, and even that doesn't seem to be enough.

If the numbers leaked to Ed Zitron are true then they aren't profitable on inference. But even if that were true, so what? It's a meaningless statement, just another way of saying they're still under-pricing their models. Inferencing and model licensing are their only revenue streams! That has to cover everything including training, staff costs, data licensing, lawsuits, support, office costs etc.

Maybe OpenAI can launch an ad network soon. That's their only hope of salvation but it's risky because if they botch it users might just migrate to Grok or Gemini or Claude.

Re: Google boss says AI investment boom has 'elements of irrationality'

#20

Post by TrackerFF »

aurareturn wrote: post #4

Is it really a bubble about to burst when literally everyone is talking about AI being in a bubble and maybe bursting soon? To me, we're clearly not peak AI exuberance. AI agents are just getting started and getting so freaking good. Just the other day, I used Vercel's v0 to build a small business website for a relative in 10 minutes. It looked fantastic and very mobile friendly. I fed the website to ChatGPT5.1 and a…

It's not that the AI models or products don't work.

It's how much money is being poured into it, how much of the money that is just changing hands between the big players, the revenue, and the valuations.

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