What’s really scary is the money that’s being invested vs the .COM bubble. In the end 90s 100 million was a huge investment. Now it seems every AI company immediately a billion dollar and more valuation. There was a time when this was called “unicorn”.
Boom, bubble, bust, boom. Why should AI be different?
41–50 of 215 posts
Re: Boom, bubble, bust, boom. Why should AI be different?
#42Fundamentally they seem different. The web looked like it had the potential to make lots of money but no one knew exactly how.
AI literally does people's jobs for them. There's not much imagination required.
Re: Boom, bubble, bust, boom. Why should AI be different?
#43Fundamentally they seem different. The web looked like it had the potential to make lots of money but no one knew exactly how. AI literally does people's jobs for them. There's not much imagination required.
But currently, nobody's actually making money on AI.
It's also not doing peoples' jobs for them, for the most part. AI's supporters do very loudly proclaim this, though.
Re: Boom, bubble, bust, boom. Why should AI be different?
#44To 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…
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.
There was a recent Bezos talk about the fact that (much like the dot-com) we've overspending on infrastructure that'll bubble and implode but then we'll have all this amazing infra for companies to build off of... but the process of that overspend and implosion is essentially a massive debt erasure - a lot of people are currently propping up this market with their capital and the companies they're propping up will collapse and those obligations liquidated - and that will result in massive society-wide pain. We may end up in a better place for the next generation because of this investment - but if you're a retail investor don't expect your 401k accounts to weather that burst gracefully... and, unlike the boomers, this will largely hit Millenials and Gen Z both of whom are currently under massive financial stress.
Re: Boom, bubble, bust, boom. Why should AI be different?
#45No, 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.
> Crazy amount of funding, little to no revenue, no competitive moat, no demand.
Doesn't this also describe Thinking Machines Lab?
Re: Boom, bubble, bust, boom. Why should AI be different?
#46Earlier quoted context omitted.
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.
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…
> converting these models into businesses.
I think it's pretty clear to all the big operators that they will need to go whole hog into ads and take some of the Google/Meta pie. It's just a matter of time.
Re: Boom, bubble, bust, boom. Why should AI be different?
#47Ok, so if that prediction is true what actions did you take? Identify the therefore part of the prediction and enumerate the three highest priority steps. Have you determined that the stock market will crash and bought positions accordingly? Have you sold all your nvidia stock? What are the implications in the broader economy and what steps have you taken?
Do you have to? I'll be 45 in a few days, but even at that age, I'm still not expecting to need anything I have invested for at least 20 years, the ratio of the value of the broad overall market then to now is still likely to be a larger multiple than for any other asset class I can expose myself to. If there's really a bubble, maybe that won't be true in 5 years, but I've yet to see a downturn that didn't recover in 20. Even if your predictions are directionally correct eventually, if you're not clairvoyant, trying to time the market is still not a great idea.
Re: Boom, bubble, bust, boom. Why should AI be different?
#48Fundamentally they seem different. The web looked like it had the potential to make lots of money but no one knew exactly how. AI literally does people's jobs for them. There's not much imagination required.
But currently, nobody's actually making money on AI. It's also not doing peoples' jobs for them, for the most part. AI's supporters do very loudly proclaim this, though.
What would it take to make money? Double or triple the pricing. Most of these companies messed on pricing initially. ChatGPT Plus/ Claude Plus (or whatever it is called) are $20/month. These should be $80 to $100/month products. Probably even more, $200.
Re: Boom, bubble, bust, boom. Why should AI be different?
#49To 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 can be incredibly high... just like the value of the internet was incredibly high.. and it can still be a finanfial bubble. I feel like the people arguing against the bubble perspective are saying look the internet was actually valuable and so too will this.. and that's totally a valid perspective. The bubble is not about whether there's value but about whether or not the market will come down. All of the a…
Yep. It seems somewhat inevitable to have a readjustment at some point. Both Web 2.0 (online retail) and AI are (rightfully, I believe) creating a lot of buzz and stimulating a lot of investment. It's all very new and exciting and there is bound to be a lot of hit and miss activity. Once the dust settles, the misguided bets will become more obvious and there will be a culling, just as we had during the dot com bubble.
Re: Boom, bubble, bust, boom. Why should AI be different?
#50One difference is most of the companies listed are old, long standing, well-performing businesses. Pets.com had potential, Apple, Amazon, and Google had large amounts of revenue even 3 years ago.
The bubble may deflate but every company mentioned will still be standing, whereas in 1999 many of them were basically Ponzi schemes relying on further investor dollars to subsidize losses. All this AI spending will hurt some investors if the bubble pops but just make for a few bad quarters for the big tech cos.