Boom, bubble, bust, boom. Why should AI be different?

You're missing the point. Those kind of narrow AI applications are not the motivation for the trillions of dollars being poured into AI. Of course AI has a variety of applications many disciplines, as it has for decades. The motivation behind the massive investment in AI is as forgetfulness said, reap the benefits from "revolutionizing the workplace"

The value of LLM is reliable high quality translation between all languages. The economic value of this is at least trillions of dollars per year. The cultural and humanitarian value is equally gigantic, even if it can't be measured in dollars and cents.

As someone working in a field that has used NLP for quite some time - yeah, I generally agree that those investments are worth their weight in gold... which is unfortunate because before ChatGPT came along they were viewed as niche unprofitable money-sinks. The astronomical investments we've seen lately have been in general models which can be leveraged to outperform some of our older models but had we wanted purely to improve those models there were much more efficient ways to do so.

Hopefully we can retain a lot of this value when the bubble bursts but I just haven't seen any really good success stories of converting these models into businesses. If you try and build as a middleman where you leverage a model to solve someone's problem they can always just go to the model runner and get the same results for cheaper - and the model runners seem (so far - this may change) to be unable to price model usage at a level that actually makes it sustainable.

Those older models running specialized tasks seem to be trucking along just fine for now - but I remain concerned that when the bubble bursts it's going to starve these necessary investments of capital.

You can have brilliant technology and still go broke.

The internet was amazingly valuable, but many of the early companies failed. Investing in internet companies was hardly a sure bet.

I grew up in the 90's and remember being a computer nerd BEFORE the .com bubble, and starting my career precisely after it burst. Let me tell you one difference I personally am experiencing that differentiates the two. Note, this is a pro-'we're in a bubble' stance:

In the late 90's and early 2000's, businesses were SALIVATING to get online, individuals were finding new ways to benefit and profit from it, and massive investment was being made to facilitate what was inevitable: an interconnected network of everything. Do you remember faxing things ? Paper mail? People half in the know were pushing the Boomers and older Gen-X types to get on with it and modernize.

Now? Not only are people not CLAMORING for more AI, it's that The Powers that Be are forcing it down our throats. At work, we have mandatory AI training, we have people getting promoted for promoting extremely dubious AI solutions both internally and on our product. I log into ANY web site now, whether I'm shopping for a vacuum cleaner or logging into a vendor website, and I get AI shoved in my face, from from "assistant" I have to interact with before typing "agent" to new features I don't care about.

Is there some truth, some merit? Absolutely. But my red flag I'm trying to raise is this: never did it feel FORCED in the 90's, there was a salivation from individuals to get more online, and a reluctance from institutions like elementary and high schools to get with the program.

Now? Corporations large and small are shoving it down our throats. Why? Well, to justify the crazy spending.

I'm no prophet and the world (and economy) are fundamentally unpredictable. But I'll say this. I'm putting my money where my mouth is, and I've put in an order to buy a 5 digit dollar amount of puts on a big 'AI' type ETF, that'll expire in the Spring. It's already wobbling and if you can't beat them, profit off of them when they stumble.

There's absolutely something wrong in the current moment, even if AI is somehow the future. For one thing, the U.S. economy would probably be in a recession right now if it weren't for this insane AI spending. It's wobbled with the recent Nvidia earnings release, and I think it is going to dip (not crash, but start dipping) soon.

The author wrote:

"None of these companies has proven yet that AI is a good enough business to justify all this spending. But the first four are now each spending $70 billion to $100 billion a year to fund data centers and other capital intensive AI expenses. Oracle is spending roughly $20 billion a year. "

In my opinion it's a theoretical arms race 'just because my competitor might win', and not based on anything certain.