Google boss says AI investment boom has 'elements of irrationality' • Hacker News Board

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

#21

Post by Xelbair » Tue, Nov 18, 2025, 9:50 AM UTC

StopDisinfo910 wrote: post #17

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 va…

Well it all started with usual SV style "growth hacking"(price dumping as a SaaS) of "gather users now, monetize later" by OpenAI - which works only if you attain virtual monopoly(basically dominance over segment of a market, with competition not really competing with you) over segment of the market.

The problem is no one attained that position, price expectations are set and it turns out that wishful thinking of reducing costs of running the models by orders of magnitude wasn't fruitful.

Is AI useful? of course.

Are the real costs of it justified? in most cases no.

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

#22

Post by nabla9 » Tue, Nov 18, 2025, 10:04 AM UTC

Google, Meta, Microsoft, and Amazon will get through easily. They don't have excessive debt. They can afford to lose their investments into AI. Their valuations will take a hit. Nvidia will lose revenue and profits, stock will go down by 60% or more, but it will also survive.

Oracle will likely fail. It funded its AI pivot with debt. The Debt-to-Revenue ratio is 1.77, the Debt-to-Equity ratio D/E is 520, and it has a free cash flow problem.

OpenAI, Anthropic, and others will be bought for cents on the dollar.

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

#23

Post by camillomiller » Tue, Nov 18, 2025, 10:11 AM UTC

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…

If it subsidized it's a problem because we're not talking about Uber trying to disrupt a clearly flawed system of transportation. We're talking about companies whose entire promise is an industrial revolution of a scale we've never seen before. That is the level of the bet. The fact they did much better than the average professional is also your own take and assessment that is purely self evident. Also, your example has fundamentally no value. You mentioned a marginal use case that doesn't scale. Personal websites will be quicker to make because you can get whatever the AI spews your way, you have basically infinite flexibility and the only contraints are "getting it done" and "looking ok/good". That is not how larger business work, at all. So there is a massive issue of scalability of this. Finally, OpenAI "states" a lot of things, and a lot of them have been proven to be flat out lies, because they're led by a man who has been proved to be a pathological narcissistic liar many times over. Yet you keep drinking the kool aid, inlcuding about inference. There are by the way reports that, data in hand, prove quite convincingly that "being profitable on inference" seems to be math gymnastics, and not at all the financial reality of OpenAI.

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

#24

Post by tow21 » Tue, Nov 18, 2025, 10:12 AM UTC

nabla9 wrote: post #22

Google, Meta, Microsoft, and Amazon will get through easily. They don't have excessive debt. They can afford to lose their investments into AI. Their valuations will take a hit. Nvidia will lose revenue and profits, stock will go down by 60% or more, but it will also survive. Oracle will likely fail. It funded its AI pivot with debt. The Debt-to-Revenue ratio is 1.77, the Debt-to-Equity ratio D/E is 520, and it has a…

Google, Meta, Microsoft and Amazon might get through easily as companies. I don't think all G/M/M/A staff will get through easily.

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

#25

Post by aurareturn » Tue, Nov 18, 2025, 10:14 AM UTC

camillomiller wrote: post #23

aurareturn wrote: post #10

Earlier quoted context omitted.

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…

If it subsidized it's a problem because we're not talking about Uber trying to disrupt a clearly flawed system of transportation. We're talking about companies whose entire promise is an industrial revolution of a scale we've never seen before. That is the level of the bet. The fact they did much better than the average professional is also your own take and assessment that is purely self evident. Also, your example…

The vast majority of highly valuable tech companies in the last 35 years have subsidized their products or services in the beginning as they grew. Why should OpenAI be any different? In particular the tokenomics is already profitable.

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

#26

Post by aurareturn » Tue, Nov 18, 2025, 10:15 AM UTC

qcnguy wrote: post #18

aurareturn wrote: post #10

Earlier quoted context omitted.

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 everyon…

  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.

Maybe it was because demand was so high that they didn't have enough GPUs to serve? Hence, the insane GPU demand?

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

#27

Post by conartist6 » Tue, Nov 18, 2025, 10:21 AM UTC

tow21 wrote: post #24

nabla9 wrote: post #22

Google, Meta, Microsoft, and Amazon will get through easily. They don't have excessive debt. They can afford to lose their investments into AI. Their valuations will take a hit. Nvidia will lose revenue and profits, stock will go down by 60% or more, but it will also survive. Oracle will likely fail. It funded its AI pivot with debt. The Debt-to-Revenue ratio is 1.77, the Debt-to-Equity ratio D/E is 520, and it has a…

Google, Meta, Microsoft and Amazon might get through easily as companies . I don't think all G/M/M/A staff will get through easily.

Microsoft is in a pickle. They put AI lipstick on top of decades of unfixed tech debt and their relationship with their userbase isn't great. Their engineering culture is clearly not healthy. For their size and financial resources, their position in the market right now is very delicate.

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

#28

Post by aurareturn » Tue, Nov 18, 2025, 10:29 AM UTC

TrackerFF wrote: post #20

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.

Well, do you have a model for this? Or is it just regurgitating mass media that it's a bubble?

If hyperscalers keep buying GPUs and Chinese companies keep saying they don't have enough GPUs, especially advanced ones, why should we believe someone that it's a bubble based on "feel"?

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

#29

Post by nabla9 » Tue, Nov 18, 2025, 10:30 AM UTC

tow21 wrote: post #24

nabla9 wrote: post #22

Google, Meta, Microsoft, and Amazon will get through easily. They don't have excessive debt. They can afford to lose their investments into AI. Their valuations will take a hit. Nvidia will lose revenue and profits, stock will go down by 60% or more, but it will also survive. Oracle will likely fail. It funded its AI pivot with debt. The Debt-to-Revenue ratio is 1.77, the Debt-to-Equity ratio D/E is 520, and it has a…

Google, Meta, Microsoft and Amazon might get through easily as companies . I don't think all G/M/M/A staff will get through easily.

I cry for Elon, that precious jewel of a human being.

Tesla (P/E: 273, PEG: 16.3) the car maker without robots, robotaxis is less than 15% of the Tesla valuation at best. When the AI hype dies, selloff starts and negative sentiment hits, we have below $200B market cap company.

It will hurt Elon mentally. He will need a hug.

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

#30

Post by jmpman » Tue, Nov 18, 2025, 10:32 AM UTC

qcnguy wrote: post #18

aurareturn wrote: post #10

Earlier quoted context omitted.

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 everyon…

I’ve wondered if it makes sense to buy Intel along with Cerebrus in order to use Intels newest nodes while under development to fab the Cerebrus wafer level inference chips which are more tolerant of defects. Overall that seems like the cheapest way to perform inference - if you have $100B.