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How the AI Bubble Bursts

martinvol.pe

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Re: How the AI Bubble Bursts

#261

Post by skeeter2020 »

Throaway1975123 wrote: post #218
drakythe wrote: post #216

Earlier quoted context omitted.

I say this as someone who has used them to boilerplate/scaffold a bit of code by this point: Economic Value of LLMs is debatable, if only because they're being too broadly applied.

Debatable sure. Not 0. Tulips are 0. They add nothing to anyone's output. LLM's are not. LLM's are not tulips.

This is changing the narative. Nobody really cares about tulips and some dumb throwaway comparison. Unless LLMs are worth an awful lot the math here does not make sense. That is both debatable and important.

Re: How the AI Bubble Bursts

#262

Post by martinvol »

hyperpape wrote: post #233

> Magnificent 7 companies are increasing capex to their biggest ever to differentiate their tech from each other and the big AI labs, but the key realization is that they don’t have to spend it to win. It’s a defensive move for them, if they commit $50B, OpenAI and Anthropic need to go raise $100B each to stay competitive, which makes them reliant on investors’ money. Stay competitive how? If the Magnificent 7 aren't…

they have to fight to stay competitive because mag7 can outspend them, but my hypothesis is that they wont need to ultimately.

Re: How the AI Bubble Bursts

#263

Post by classified »

vekker wrote: post #251
hirako2000 wrote: post #117

Earlier quoted context omitted.

Tulips sales also skyrocketed. Seriously, what value are tokens providing other than justifying layoffs. Concretely. Today. Not in the speculating scenario that cardiologist could be replaced with models. We see this new trend of agentic coding, again a promise software will be written that way going forward, despite the number of fiasco already experienced when trusting a model turned bad. The use case may provide v…

> Seriously, what value are tokens providing other than justifying layoffs Like the OP said, it's incredible how polarizing this debate is. When I read comments like yours, I feel like a significant part of the global workforce in IT must be living on another planet? Or they never really used Claude Code, Codex, OpenCode, ... intensively before because of company policies? I legitimately am at least 10x more producti…

> 10x more productive

That claim is totally worthless without you providing concrete information how you measured that.

Re: How the AI Bubble Bursts

#264

Post by infecto »

drakythe wrote: post #247
paulddraper wrote: post #202

Earlier quoted context omitted.

You can rent a H100 GPU for $4/hour. [1] 300k tokens for that hour. OpenAI charges $6. Those are pessimistic assumptions. [1] https://lambda.ai/instances

3.99 at 8x instances, with a minimum 2 week commitment. Good luck getting 70% usage average during that time. Useful when you're running a training round and can properly gauge demand, not so great when you're offering an API.

Is it not a good penciled number? It helps set the directional tone that at inference cost is being covered.

Re: How the AI Bubble Bursts

#265

Post by shimman »

thereitgoes456 wrote: post #70
shimman wrote: post #47

Earlier quoted context omitted.

How? They're already burning $2 bills to make $1, court documents shown that Anthropic has already been lying around revenue (claimed to have made $19 billion when it's actually $5 billion to date [1]). Not hard to believe they're lying about other things when they've been lying about the capability of their products since inception. [1] https://www.reuters.com/commentary/breakingviews/anthropic-g...

That is not what the article says, it says $19B ARR. I don’t necessarily see a contradiction. $19B run rate, achieved very recently, is actually consistent with $5B lifetime earnings, because their growth curve is so sharp. Zitron is not good at math.

Didn't link to Zitron site but if you can't see how dishonest it is to say you have $19b ARR when the reality is you have only a total of $5b IDK what to tell you. Says more about how you think and why you think it's okay for corporations to be misleading.

Re: How the AI Bubble Bursts

#266

Post by tapoxi »

piker wrote: post #144
tapoxi wrote: post #122

Earlier quoted context omitted.

The state of GitHub and Windows 11 certainly qualify as sub-par.

There are some frustrating parts, but subpar is an odd way to describe GitHub to me. I’m pretty happy with what they’re doing, and find the UX super helpful. I do agree Actions needs a debug mode but otherwise I get a ton of value out of the service for $20/month?

Specifically their failure to meet reasonable uptime requirements. I can't run a 99.9 service on a 99.0 platform.

Re: How the AI Bubble Bursts

#267

Post by nopinsight »

beepbooptheory wrote: post #59
baq wrote: post #32

Earlier quoted context omitted.

If they shut down all training today they’d be absolutely printing money for the next couple quarters and then die with a bang once the other lab releases the next frontier to the public.

I don't really get the last bit. It's hard to imagine what a new fangled "frontier model" could do that would blow anyone out of the water. Like what does this look like? Really good benchmarks? Who cares about that anymore?

[dead]

Re: How the AI Bubble Bursts

#268

Post by shimman »

MattRix wrote: post #82
shimman wrote: post #47

Earlier quoted context omitted.

How? They're already burning $2 bills to make $1, court documents shown that Anthropic has already been lying around revenue (claimed to have made $19 billion when it's actually $5 billion to date [1]). Not hard to believe they're lying about other things when they've been lying about the capability of their products since inception. [1] https://www.reuters.com/commentary/breakingviews/anthropic-g...

This is not lying, that is just what run rate revenue means! It makes sense to use as a metric when a company’s user base is growing as fast as Anthropic’s is.

It makes sense to be extremely misleading about actual accounting figures? In what world is it okay to say you have $19b in ARR when you have only ever generated $5b for the entire duration of your company's existence?

Did Enron start a business school I'm unaware of something?

Re: How the AI Bubble Bursts

#269

Post by wavemode »

H8crilA wrote: post #90
schnitzelstoat wrote: post #28

It's a winner-takes-all market and everyone wants to be the next Google and not the next Lycos or AskJeeves etc. It'd be interesting to see what they spend all the money on though as we seem to be hitting diminishing returns and I'm not sure if the typical enterprise user really cares about small improvements on benchmarks. It seems like it'd probably be better to spend all that on marketing, free trials, exclusivity…

Where to go next? I don't think anyone has gotten close to automating everyday PC usage, likely via screen capture and raw keyboard+mouse inputs. Imagine how much bigger would that market be than vibecoding.

tbh I don't think this use case is going to be as big as people seem to think

there are a lot of reasons, but in brief - I think AI desktop use is a product that the average person isn't going to get much value out of. to make an analogy - the creators of Segway thought people would buy them in large numbers, but it turned out most people don't mind walking manually (or at least, don't mind it enough to spend money on a scooter). I think makers of AI Desktop Use products are going to find out the same thing as it relates to everyday tasks like checking email and shopping.

Re: How the AI Bubble Bursts

#270

Post by infecto »

skeeter2020 wrote: post #257
sempron64 wrote: post #173

Earlier quoted context omitted.

It's ridiculous to call this tulips, in the sense of a speculative asset whose price depends on resale. A more similar recent example is the dotcom boom and bust based on building internet infrastructure, or the 2008 crash which was based on cyclical infrastructure overinvestment. These crashes were characterized by demand growth not keeping up with investment because the target markets were tapped out. Not clear whe…

dotcom was maybe 100B a year focused on the US and mostly VCs. AI is perhaps 250B global VC (with more than half of ALL VCs concentrated in one sector) and another 800B+ from non-VC. These numbers are basically a guess but structurally we are set up for something much, much worse.

But unlike the dot com boom, demand for tokens has not let up and there is increasing demand. I don’t know where it falls, certainly companies don’t get or right and they either over or under build. With the current demand rate changes it’s hard to understand why you would stop building today.
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