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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'

#171

Post by whattheheckheck »

wavemode wrote: post #162
techblueberry wrote: post #88

Earlier quoted context omitted.

I've been trying to grok this idea of - when does a bubble pop. Like in theory if everyone knows it's a bubble, that should cause it to pop, because people should be making their way to the exists, playing music chairs to get their money out early. But as I try to sort of narrative the ideas behind bubbles and bursts, one thing I realize, is that I think in order for a bubble to burst, people essentially have to want…

It's important to keep in mind the difference between the stock market and the economy. Economically, AI is a bubble, and lots of startups whose current business model is "UI in front of the OpenAI API" are likely doomed. That's just economic reality - you can't run on investor money forever. Eventually you need actual revenue, and many of these companies aren't generating very much of it. That being said, most of th…

I think the targeted ad revenue all of the llm providers will get using everyones regular chat data + credit card dataset for training is going to be insanely good.

Plus the information they can provide to the State on the sentiment of users is also going to be greatly valued

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

#173

Post by thewebguyd »

aurareturn wrote: post #31
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…

OpenAI, Anthropic, and others will be bought for cents on the dollar. OpenAI is existential threat to all big tech including Meta, Google, Microsoft, Apple. Hence, they're all spending lavishly right now to not get left behind. Meta --> GenAI Content creation can disrupt Instagram. ChatGPT likely has more data on a person than Instagram does by now for ads. 800 million daily active users for ChatGPT already. Google -…

> I'm betting that OpenAI will emerge bigger than current big tech in ~5 years or less.

I seriously doubt it. If this bubble pops, the best OpenAI can hope for is they just get absorbed into Microsoft.

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

#174

Post by ben_w »

thewebguyd wrote: post #136
OptionOfT wrote: post #114

Interestingly I think if the AI succeed at the level that a lot of these CEOs hope we're not much better off either. And the sentiment that goes around is more: reduce the amount of people needed to do the same amount of work: https://www.theregister.com/2025/10/09/mckinsey_ai_monetizat... > McKinsey says, while quoting an HR executive at a Fortune 100 company griping: "All of these copilots are supposed to make work…

> Who is going to be buying the products and services if no-one has money to throw around? The same people who are buying products and services right now. Just 10% of the US population is responsible for nearly 50% of consumption. We are just going to bifurcate even more into the haves and have-nots. Maybe that 10% now becomes responsible for 70+% of consumption and everyone else is fighting for scraps. It won't be s…

The top 10% income bracket of the US is broad enough to include basically all US software developers, isn't it?

If all jobs evaporate, what does the economy look like when just based on interest and dividend payments?

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

#175

Post by jimbokun »

ben_w wrote: post #174
thewebguyd wrote: post #136

Earlier quoted context omitted.

> Who is going to be buying the products and services if no-one has money to throw around? The same people who are buying products and services right now. Just 10% of the US population is responsible for nearly 50% of consumption. We are just going to bifurcate even more into the haves and have-nots. Maybe that 10% now becomes responsible for 70+% of consumption and everyone else is fighting for scraps. It won't be s…

The top 10% income bracket of the US is broad enough to include basically all US software developers, isn't it? If all jobs evaporate, what does the economy look like when just based on interest and dividend payments?

It looks like Mad Max.

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

#176

Post by jimbokun »

FloorEgg wrote: post #146
cedws wrote: post #137

Earlier quoted context omitted.

I don't even know what the selling point of AI is for regular people. In the 60s it was possible for a man to work an ordinary job, buy a house, settle down with a wife and support two or three children. That's completely out of the realm of reality for many young people now and the plummeting birth rates show it. The middle class have financially benefited very little from the past 20+ years of productivity gains. S…

To me this all just looks like a big frothy chemical reaction playing out far beyond any one person's control. With that view, many things oscillate over time, including game theory patterns (average interaction intentions of win-win, win-lose, lose-lose), and integration / mitosis (unions, international treaties, civil wars),etc. So my optimistic view is that inevitably we will get more tech whether we want it or no…

Either that or the AI robots kill us all.

Could go either way.

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

#177

Post by thewebguyd »

StopDisinfo910 wrote: post #32
conartist6 wrote: post #27

Earlier quoted context omitted.

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.

I don't think so. They are one of the few companies actually making money with AI as they have intelligently leveraged the position of Office 365 in companies to sell Copilot. Their AI investment plans are, well, plans which could be scaled down easily. Worst case scenario for them is their investment in OpenAI becoming worthless. It would hurt but is hardly life threatening. Their revenue driver is clearly their pos…

> Worst case scenario for them is their investment in OpenAI becoming worthless.

And even then, if that happens when the bubble pops, they'll likely just acquire OpenAI on the cheap. Thanks to the current agreement, it already runs on Azure, they already have access to OpenAI's IP, and Microsoft has already developed all their Copilots on top of it. It would be near-zero cost for Microsoft at that point to just absorb them and continue on as they are today.

Microsoft isn't going anywhere, for better or for worse.

Despite them pissing off users with Windows, what HN forgets, is they aren't Microsoft's customer. The individual user/consumer never was. We may not want what MS is selling, but their enterprise customers definitely do.

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

#178

Post by thewebguyd »

ben_w wrote: post #174
thewebguyd wrote: post #136

Earlier quoted context omitted.

> Who is going to be buying the products and services if no-one has money to throw around? The same people who are buying products and services right now. Just 10% of the US population is responsible for nearly 50% of consumption. We are just going to bifurcate even more into the haves and have-nots. Maybe that 10% now becomes responsible for 70+% of consumption and everyone else is fighting for scraps. It won't be s…

The top 10% income bracket of the US is broad enough to include basically all US software developers, isn't it? If all jobs evaporate, what does the economy look like when just based on interest and dividend payments?

Pretty much yeah, I believe it's around $200k/year puts you in that bracket.

If all jobs evaporate, then only asset owners will have money to spend, everyone else is left to fight for scraps so we either all die off or we get mad max.

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

#179

Post by jimbokun »

Demiurge wrote: post #147
cedws wrote: post #137

Earlier quoted context omitted.

I don't even know what the selling point of AI is for regular people. In the 60s it was possible for a man to work an ordinary job, buy a house, settle down with a wife and support two or three children. That's completely out of the realm of reality for many young people now and the plummeting birth rates show it. The middle class have financially benefited very little from the past 20+ years of productivity gains. S…

> In the 60s it was possible for a man to work an ordinary job, buy a house, settle down with a wife and support two or three children. Every kind of a man, or woman? > Do people really think more technology is going to be the path to a better society? Because to me it looks like the opposite. Well, this probably why statistics exist.

> Every kind of a man, or woman?

Why do so many people miss the point on this?

Instead of making this dream true for all the people who were previously excluded, we have pursued equality by making this dream accessible to NO ONE.

> Well, this probably why statistics exist.

Like the statistics on plummeting mental health and happiness, an obesity epidemic, increases in "deaths of despair", and plateauing or decreasing life expectancy?

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

#180

Post by mrguyorama »

TulliusCicero wrote: post #144
nicce wrote: post #77

Earlier quoted context omitted.

More like that when it happens, how big the pop is.

It's also possible it'll be more of a deflation than a pop. That's what I'm personally hoping for anyway, would rather the economy avoid a big recession.

Without AI bubble the economy is already mostly in a recession.
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