Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How the AI Bubble Bursts

martinvol.pe

Post reply on HN
Print view View original

331–340 of 557 posts

Re: How the AI Bubble Bursts

#331

Post by baq »

shimman wrote: post #268
MattRix wrote: post #82

Earlier quoted context omitted.

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?

sir if you say a number is $19B and everyone who is invested knows what it means, is there a problem?

Re: How the AI Bubble Bursts

#332

Post by hirako2000 »

skeeter2020 wrote: post #261
Throaway1975123 wrote: post #218

Earlier quoted context omitted.

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.

Since I brought up the tulips: People do care about Tulips. They do have value. So do LLMs. How many people will remain willing to pay for them, and how much, is what we call speculation.

Re: How the AI Bubble Bursts

#333

Post by FiberBundle »

wongarsu wrote: post #166
boriskourt wrote: post #48

Earlier quoted context omitted.

> The cost to serve tokens is absolutely profitable today and that’s been true for at least a year. > For the data center build outs, demand for tokens is still exceeding supply. Can you provide any numbers for this?

I can get Kimi K2.5 inference on openrouter for about $0.5/MTok input + $2.5/MTok output, from six providers that have no moat besides efficiently selling GPU time. We can assume they are doing so at a profit (they have no incentive to do this at a loss), giving us those numbers as the cost to serve a 1T-a32b model at scale. Now we don't know the true size of any of the proprietary models, but my educated guess is th…

This is like saying that innovative medical drugs could be sold at a profit if only there was no patent protection and the innovative companies would still invest in R&D. Yes, on a token level pure inference costs might be profitable, but the frontier Ai labs will surely have to recoup their R&D investments at some point.

Re: How the AI Bubble Bursts

#334

Post by lnfromx »

martinvol wrote: post #277
lnfromx wrote: post #235

Okay lets suppose all those companies are profitable if training would stop today. What if token demand is shrinking ? I think big parts of the current demand is artificially build by e.g. FOMO and marketing without real value generated by them. There is no indication in economic data about some productivity boom resulting from AI usage. Next thing is Energy costs - that will soon eat into profitability too. I don't…

I don't think token demand will shrink because we're still just learning how to use it, demand will skyrocket. The problem is what price we'll be willing to pay for it, specially if competition keeps soaring.

But are we really still learning ? I feel like we already converge to a set of use cases. Also I am always wondering if LLMs are what they promise to be, why is it so difficult to find sources of real (measurable) value ? Wouldn't a disillusion of those overpromises trigger a reduction in demand ?

Re: How the AI Bubble Bursts

#335

Post by LarsDu88 »

The world has seen this play out before. Launch a service, sell it at a loss to achieve hypergrowth, raise prices add ads and enshittify.

The thing that is difference is the scale and the hardware. When Britain underwent its rail building boom in the 1850s, the bubble bursting left the kingdom with 150 years worth of infrastructure. Unless we invest in energy buildouts, we will be left with billions in rapidly depreciating GPUs

Re: How the AI Bubble Bursts

#336

Post by Marha01 »

pydry wrote: post #153
amelius wrote: post #97

Earlier quoted context omitted.

> Now if that means RAM prices come down (as speculated, not reported on, in the link) or the AI companies just do more things with their extra ram is yet to be determined. I think it is determined: https://en.wikipedia.org/wiki/Jevons_paradox

Jevons paradox only applies if demand hasnt already been saturated. The fact that public LLM usage is leveling off at a price of $0 and Jensen "we make the shovels in this gold rush" Huang is rather desperately claiming that you need to spend $250k/year in tokens to be taken seriously suggests that demand saturation may not be that far off. Whether Jevons' Paradox applies to software engineers I think is another open…

Demand for top models is definitely not saturated, at least when it comes to programming. If I could afford to use 5x more Claude Opus 4.6 tokens, I would!

Re: How the AI Bubble Bursts

#337

Post by flir »

raincole wrote: post #286
pydry wrote: post #153

Earlier quoted context omitted.

Jevons paradox only applies if demand hasnt already been saturated. The fact that public LLM usage is leveling off at a price of $0 and Jensen "we make the shovels in this gold rush" Huang is rather desperately claiming that you need to spend $250k/year in tokens to be taken seriously suggests that demand saturation may not be that far off. Whether Jevons' Paradox applies to software engineers I think is another open…

It is quite hard to imagine how the demand is saturated now. I think any company that uses a sliver of AI will happily increase their token consumption 100x if it's free.

Are you assuming a brute force "burn tokens until it passes the tests" model, or is there a really sweet approach on the horizon that is impractical at current token costs?

I'm asking 'cos while I'm philosophically opposed to the first option, but I'd love to hear about anything that resembles the second.

Re: How the AI Bubble Bursts

#338

Post by arctic-true »

aurareturn wrote: post #139
ainch wrote: post #128

Earlier quoted context omitted.

Do you have any evidence that inference revenue is growing faster than training costs? RLVR is significantly less compute-efficient than token-prediction pretraining - especially as labs are trying to train models to achieve agentic tasks which take tens of minutes per rollout.

I don't have any evidence. You'll have to believe what Anthropic and OpenAI CEOs say publicly. However, it seems to make a lot of sense. Anthropic literally added $6b ARR in February 2026 alone. I doubt training costs go up that fast.

But this is exactly the problem - we have to take it on faith that inference is profitable because nobody actually knows. It’s hard to even define what that would mean, and while I am suspicious of claims that frontier lab CEOs are just out-and-out liars or bad people, defining and calculating the real cost of inference would be time- and labor-intensive in its own right and there is no strong incentive to do it other than “tech reporters are curious.” Until the IPO, we just won’t know.

Re: How the AI Bubble Bursts

#339

Post by bluedays »

Tade0 wrote: post #161
infecto wrote: post #30

It’s incredible how polarizing the AI rush is. I keep the perspective that the technology is an absolute step change but I have no idea where the cards will fall. I take a lot of issue with these style of articles. I get a sense that the authors are being overly defensive. The cost to serve tokens is absolutely profitable today and that’s been true for at least a year. What’s unclear is how R&D and capex fit into the…

My main worry is - once this is all over, the market consolidates and using LLMs will become a requirement in job listings, what's the highest price per million tokens companies will be able to charge us? Currently on a given day I'm chewing through approximately the equivalent of my lunch money, but where there's opportunity to extract wealth, someone will find a way to do it.

It's already a job requirement for a bunch of places, they're just not listing it. I lost out on a job recently because I haven't used cursor ai.

Re: How the AI Bubble Bursts

#340

Post by citrin_ru »

ffsm8 wrote: post #317
drakythe wrote: post #160

Earlier quoted context omitted.

Is there a source that says commercial RAM prices are dropping? I was recently told (without a source, so I am not sure if it is true or not) that OpenAI never even bought any of the RAM they signed deals on last year, and that those deals were just letters of intent. So if prices are coming down I wouldn't be shocked but the economy is pretty well vibe coded these days so who even knows.

Well, all manufacturers of ram have publicly stated that they're sold out for 2026 RAM prices falling during 2026 is insanely unlikely unless AI crashes so hard it starts to actually kill companies. And not just any but big tech I'm not seeing that in 2026. Maybe 2027 (I'd sincerely doubt that too, honestly), but definitely not within the next 9 months. Their runway is _way_ too large for things to spiral out of cont…

> unlikely unless AI crashes so hard it starts to actually kill companies. And not just any but big tech. I'm not seeing that in 2026

A month ago AI crash we looking unlikely but with the strait of Hormuz being de-facto blocked many predict a global stagflation which could affect AI too.

Post reply on HN