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

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

#31

Post by nonameiguess »

mmooss wrote: post #2

To say whether it's a bubble, we need to know the value of the technology. The value of modern AI seems very high. That nobody knows how high, that they still haven't figured out applications, and that the technology and its tools are still far from refined, is normal for any new technology. If you add the value of the potential political power gained by controlling AI, then the value to the owners and investors is a…

Arguably, it's exactly this mindset creating the problem. It's not the value of the technology that matters. It's the value of the companies. If one company was the only one that had a particular valuable technology, then that would matter, but otherwise 90% of them likely end up worthless even if the sector itself doesn't.

How that washes out on net we'll have to see. I'm not gonna pretend I know more than anyone else. Just keep in mind that a major difference between now and 2000 is companies stay private a lot longer. An IPO forces you to open the books and sustain public scrutiny of the broad investor class. A still-private startup only needs to convince one funder of their value. That inevitably leads to higher variance and a greater risk of failure. That doesn't mean the whole sector is necessarily a bubble, but if it is, it can be sustained a lot longer without us knowing. A small number of people with $50 billion they need to park somewhere and no other obvious options can keep shitty ideas afloat in a way that wouldn't be possible if they had to be subjected to broader exposure. We like to believe people with $50 billion can't be wrong, but the wisdom of crowds always beats the wisdom of individual genius.

Heck, AI itself taught us that same lesson!

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

#32

Post by munk-a »

carlosjobim wrote: post #23
forgetfulness wrote: post #6

Earlier quoted context omitted.

The implied promise was that these things were going to “revolutionize the workplace” i.e. massively automate middle class office jobs A couple of years down the road, their useful applications still are summarizing text, transferring style to text, generating code under strict supervision, and generating images that need retouching. That’s a lot to get out of a tool, but it’s dubious that investors were pouring tril…

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.

That is of immense social value - but manual translation services for commercial projects (like application localization) is already dirt cheap to do and automatic casual translation services for consumers would be incredibly difficult to monetize.

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

#33

Post by digdugdirk »

mmooss wrote: post #2

To say whether it's a bubble, we need to know the value of the technology. The value of modern AI seems very high. That nobody knows how high, that they still haven't figured out applications, and that the technology and its tools are still far from refined, is normal for any new technology. If you add the value of the potential political power gained by controlling AI, then the value to the owners and investors is a…

Alternate viewpoint - The value of modern AI seems very high. That nobody knows how high, that they still haven't figured out applications, and that the technology and its tools are still far from refined, might be a sign that the technology shouldn't be valued this highly at all

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

#34

Post by usrnm »

mmooss wrote: post #2

To say whether it's a bubble, we need to know the value of the technology. The value of modern AI seems very high. That nobody knows how high, that they still haven't figured out applications, and that the technology and its tools are still far from refined, is normal for any new technology. If you add the value of the potential political power gained by controlling AI, then the value to the owners and investors is a…

Absolutely nothing in your list prevents the AI from being a bubble. The Internet is an absolute marvel of engineering that completely changed the life of the majority of people in the world, and yet it crashed 25 years ago, and crashed hard. Both can be true at the same time.

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

#36

Post by hyperbovine »

mmooss wrote: post #2

To say whether it's a bubble, we need to know the value of the technology. The value of modern AI seems very high. That nobody knows how high, that they still haven't figured out applications, and that the technology and its tools are still far from refined, is normal for any new technology. If you add the value of the potential political power gained by controlling AI, then the value to the owners and investors is a…

> The value of modern AI seems very high. That nobody knows how high, that they still haven't figured out applications, and that the technology and its tools are still far from refined, is normal for any new technology.

The same could be said for the internet. But, and I know this will be hard for younger readers to believe, I seem to recall the value proposition of the Internet being more immediately apparent at the time.

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

#38

Post by ben_w »

forgetfulness wrote: post #6
mmooss wrote: post #2

To say whether it's a bubble, we need to know the value of the technology. The value of modern AI seems very high. That nobody knows how high, that they still haven't figured out applications, and that the technology and its tools are still far from refined, is normal for any new technology. If you add the value of the potential political power gained by controlling AI, then the value to the owners and investors is a…

The implied promise was that these things were going to “revolutionize the workplace” i.e. massively automate middle class office jobs A couple of years down the road, their useful applications still are summarizing text, transferring style to text, generating code under strict supervision, and generating images that need retouching. That’s a lot to get out of a tool, but it’s dubious that investors were pouring tril…

How many people graduate from a US software engineering degree each year? About 100k? If they (the 100k in the US) earn $100k each in the first year, before gaining the skills to earn more, that's $10 billion a year, every year. If you can capture that market for next 20 years, it's worth $200 billion.

Except… can you capture it? A junior dev is… not exactly someone you want connecting to your business-critical database without supervision, and a real human dev will get better with a predictable rate. Will LLMs get better? The makers are betting on that, but we'll only know after the model releases, and even then after we play with them for a bit to differentiate between the record performance on whichever benchmark and the actual work we want them to do.

Then there's the question of can you really keep an edge for 20 years with investments today: Sometime between 2030-2035, there's likely to be models matching 2025-SOTA performance that run on ${year}'s high-end smartphone.

(Well, unless we all die in WW3 because of Russia getting desperate from its failure to remove Ukraine's sovereignty, or because China has a hot war with Taiwan and/or the USA messing with global consumer electronics supplies, but I don't think those get priced into the market…).

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

#39

Post by coffeebeqn »

baxtr wrote: post #35

No, it doesn’t. Go and actually read the crazy story about startups like Global Crossing. Crazy amount of funding, little to no revenue, no competitive moat, no demand. Compare that to today, and you see only the crazy amount of funding part is the same.

How are the revenues these days? Let’s not count Nvidia since they’re the ones selling the shovels. How are the moats?

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

#40

Post by hyperbovine »

lagosfractal42 wrote: post #17
forgetfulness wrote: post #6

Earlier quoted context omitted.

The implied promise was that these things were going to “revolutionize the workplace” i.e. massively automate middle class office jobs A couple of years down the road, their useful applications still are summarizing text, transferring style to text, generating code under strict supervision, and generating images that need retouching. That’s a lot to get out of a tool, but it’s dubious that investors were pouring tril…

GPUs have massive applications such as Alphafold, CRISPR, Medical Imaging, Meteorology. The massive planetary investment is not to make more AI chats that summarize text. That's just short sighted.

Eh, those applications (incl. protein folding) existed for a decade-plus before LLMs came onto the scene, and there was absolutely nothing like the scale of capex that we're seeing right now. It's like literally 100-1000x larger than what GPU hosting providers were spending previously.
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