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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'

#71

Post by arunabha »

aurareturn wrote: post #45
nabla9 wrote: post #44

Earlier quoted context omitted.

> Investors are lining up to give them money. When they IPO, they'll easily be worth over $1 trillion. Your premise is that there is no bubble. We are talking about what happens when bubble bursts. Without investor money drying out there is no bubble.

I think we are in 1995 of the dotcom bubble for AI.

Clearly, a lot of people here disagree with you. Doesn't mean you cannot be right, but in general, the HN crowd is a pretty good predictor of the trends in the tech industry.

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

#72

Post by pksebben »

ares623 wrote: post #58
burnte wrote: post #54

Earlier quoted context omitted.

Agreed, it's when. They're hoping to stave it off or maybe stretch out the pop into a correction by all hedging together with all these incestuous deals, but you can't hold back the tide. They debuted this tech way too early, promised way too much, and now the market is wary about buying AI products until more noise settles out of the system.

It’s going to pop as soon as they get confirmation the govt will bail them out. Until then they’re going to give it their all to keep it growing.

I think they already have that confirmation. When we bailed the banks out in 08 we basically said "If you're big enough that we'd be screwed without you then take whatever risks you like with impunity".

That's a reduction of complexity, of course, but the core of the lesson is there. We have actually kept on with all the practices that led to the housing crash (MBS, predatory lending, Mixing investment and traditional banking).

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

#74

Post by hypeatei »

giancarlostoro wrote: post #69

I think it will pop but not in the way everyone thinks it will pop. There's plenty that's not going to go away / anywhere, but I'm sure lots of startups will fail and close their doors.

What way do you envision it popping? Nvidia has tons of investments on their books in smaller companies. If a couple of them start showing poor earnings, it could cause a death spiral for NVDA because 1) their investment just tanked, and 2) those companies are no longer buying chips from them therefore reducing revenue.

Nvidia also makes up ~7% of the S&P 500 so if their stock price falls substantially, that's a big chunk of capital just... gone for a lot of people.

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

#75

Post by nitwit005 »

Zaskoda wrote: post #70
ghostpepper wrote: post #51

Does anyone really think it’s “if” and not “when” ?

Sort of? My thoughts are that there's something of an AI arms race and the US doesn't want to lose that race to another country... so if the AI bubble pops too fiercely, there may likely be some form of intervention. And any time the government intervenes, all bets are off the table. Who knows what they will do and what the impact will be.

I can see them intervening to preserve AI R&D of some sort, but many of the current companies are running consumer oriented products. Why care if some AI art generation website goes bust?

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

#78

Post by jordanb »

clickety_clack wrote: post #48

Sounds like something an extortionist would say in a movie. “We’re all dirty here!”

They really are shameless aren't they?

Makes one think that this was the plan all along. I think they saw how SVB went down and realize that if they're reckless and irresponsible at a big enough scale they can get the government to just transfer money to them. It's almost like this is their new business model "we're selling exposure to the $XX trillion dollar bailout industry."

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

#79

Post by zdragnar »

clickety_clack wrote: post #48

Sounds like something an extortionist would say in a movie. “We’re all dirty here!”

Hasn't it been pretty widely acknowledged that AI funding has created a whirlpool of money cycling between a few players- cloud / datacenter hosts / operators (oracle), GPU (nvidia) and model operators (openai).

To pile on, there's hardly a product being developed that doesn't integrate "ai" in some way. I was trying to figure out why my brand new laptop was running slowly, and (among other things) noticed 3 different services running- microsoft copilot, microsoft 365 copilot (not the same as the first, naturally) and the laptop manufacturer's "chat" service. That same day, I had no fewer than 5 other programs all begging me to try their AI integrations.

Job boards for startups are all filled with "using AI" fluff because that's the only thing investors seem to want to put money into.

We really are all dirty here.

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

#80

Post by rchaud »

Most bubbles occur due to excessive levels of credit offered too cheaply, resulting in a whole bunch of defaults happening at the same time. All the major AI players have borrowed money to buy GPUs and build data centers and have used Special Purpose Vehicles to do it so the debt doesn't fall on their own balance sheet, probably using a certain amount of stock as collateral. If the SPV defaults, could that trigger a big sell-off?
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