Live data from Hacker News

How the AI Bubble Bursts

martinvol.pe

341–350 of 557 posts

Re: How the AI Bubble Bursts

#341
post #115

Earlier quoted context omitted.

YouTube, Spotify, and most video steamers have zero ads on paid tiers. I never see video ads.

I don't paid anything to YouTube and I don't see any ads. Because I block ads.

Do you feel good about YouTube spending money on hosting and video producers spending time/money on content that you're paying nothing for? How is that sustainable?

Re: How the AI Bubble Bursts

#342
In general:

Cynicism makes you sound smart. Optimism makes you successful.

The cynicism around this technology is everywhere, even though it clearly has real power to solve problems. It is a technology which enables so many use cases that were impossible before, that makes it very highly hyped/expected. And that is causing an immune (over) reaction by natural skeptics, that's an error.

People need to take a measured, reality based, view of how the technology is being used today, the adoption curve, and the increase in capabilities over time.

It's clearly being used strongly, and may even be revolutionary.

Bubbles burst when there's no 'there' there. AI has an undeniable 'there'—the only question is the timing of the ROI.

Re: How the AI Bubble Bursts

#343
post #296

Earlier quoted context omitted.

Isn't salary a proxy of how hard to replace one person or a group of persons is or how valuable they are? There was a surge in demand for SWEs and scarcity brought salaries up. Are them too high? Hell no. On average, my colleagues and me generated ~2M$ each in 2025 for our company, while we get payed a fraction of that (grants and bonuses included). If you look at net income per employee we are at around 700k each in…

>There was a surge in demand for SWEs and scarcity brought salaries up. Are them too high? Hell no. On average, my colleagues and me generated ~2M$ each in 2025 for our company, while we get payed a fraction of that (grants and bonuses included). If you look at net income per employee we are at around 700k each in 2025. So by that logic, housing in coastal cities also aren't "overinflated"? After all, like SWEs, they…

Ya, that sounds right to me. Coastal city housing is very supply constrained, part of why it's so expensive, but it is hugely in demand and provides tons of value to many by letting them live near high paying companies. Unless by "overinflated" you mean a constrained supply/demand curve?

Re: How the AI Bubble Bursts

#344
post #170

This article tries to build upon a lot of half-truths or incorrect facts, like this: > OpenAI is struggling to monetize. They turned to showing ads in ChatGPT, The ads aren’t going into your paid plans (except maybe a highly discounted tier, depending on the market). The ads are a play to offer a free version. Having an ad-supported free tier isn’t new. The discussion about being unprofitable also repeats the reducti…

I've heard "They're losing money" since the 1990s. About Amazon and nearly every other tech company. The strategy is always: * Build something useful * Give it away for free to get people exited * Convince investors that this is going to rule the world * Grow to dominate the world * Enshittify

The difference is switching costs and the viability of alternatives. Even open source models are only a few months behind the frontier labs, which is a long time in tech but practically no time at all in the eyes of a business consumer. At best, one of the frontier labs will survive and get to flex its hegemonic muscle. But billions and billions of dollars worth of investments still get wiped out in that scenario, which I would still qualify as the bubble popping. This would be doubly true if the winner winds up being Google or Microsoft.

Re: How the AI Bubble Bursts

#345
post #337

Earlier quoted context omitted.

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.

One idea I've heard is prototype-first design reviews. If the cost of code genuinely trends to zero, there's no reason why most technical disagreements about product functionality couldn't come with prototypes to illustrate each side of the debate. Today, that's not always practical between token costs and usage limits.

Re: How the AI Bubble Bursts

#346
post #9

Earlier quoted context omitted.

Why?

You have to be uneducated to even read an “AI is bubble article”. Anyone working this stuff knows how much more compute we need.

> Anyone working this stuff...

Things look different from within a bubble, you need an outside perspective.

Re: How the AI Bubble Bursts

#347
post #32
post #20

Earlier quoted context omitted.

But are they actually profitable, or do they employ creative accounting where only parts of overhead expenses are counted against all of inference revenue, similar to what Uber did? OpenAI's numbers show that they definitely are not profitable on inference, and even worse, revenue growth scaled linearly with inference cost from 2024 to 2025, which means they can't outgrow this problem. See https://www.wheresyoured.at…

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.

So just ignoring the link entirely, cool cool cool

Re: How the AI Bubble Bursts

#348

Earlier quoted context omitted.

I’m not disagreeing with you, but consumer RAM prices are lagging indicators. If commercial RAM prices are dropping then consumers will see those price drops last, especially given the fact that several consumer manufacturers turned to commercial only.

If they see them. Plenty of businesses are still charging pandemic prices for all kinds of goods and simply pocketing the difference. Cars come to mind instantly. Prices exploded in 2020/1, due to legitimate shortages, most of which have been plus or minus resolved, but the prices for new (and used!) cars never came back down.

While the pandemic chip shortage resolved around 2024, a new chip shortage started in 2025 when the Dutch government took control of Nexperia (who are owned by China's Wingtech) and China retaliated by creating export restrictions. Honda, Nissan, Mercedes-Benz and others cut production. With less inventory, manufacturers and dealers are raising prices to compensate.

Also the cost of shipping never came down and lots of cars and/or their components need to cross oceans. Plus we have a new energy crisis...

Re: How the AI Bubble Bursts

#349
post #255

Earlier quoted context omitted.

Overinflated relative to the wet dreams of the ownership class.

It's not exactly stuff of "wet dreams of the ownership class" to say that of the possible white collar careers, software engineering is pretty hard to beat in terms of salary vs work you need to put in.

This is a story of other careers having salaries pushed down relative to inflating essentials and the resulting economic surplus being squeezed into asset portfolios. It's a story of rich people getting paid for being rich in proportion to how rich they are and soaking up more than 100% of economic growth for the last 50 years. Not a story of software engineers working for a living and getting what would have been a blue-collar salary for it.

Re: How the AI Bubble Bursts

#350
The thing I am struggling with is where is the impact of LLM tools, especially given the massive increase in token consumption from 2025 to now and the saturated presence of LLMs everywhere.

Naively speaking, I have so many expectations for the impact of this tech.

I'd expect a noticeable uptick in applications published on Google, Apple and Microsoft app stores. I'd also expect an uptick of games published to Steam. I'd expect an uptick in Github repos and libraries on PyPi.

I'd also expect some impact on the GDP ⸻ a non-negligible part of running a business is communication, planning, ads. Naively, I'd expect that LLMs should be able to both speed some of these things up and lubricate others.

I'd also expect that large corpos like Microsoft and Apple would have more resources to spare on the essential details of their OS like having a functioning taskbar or a predictable, consistent GUI.

I'd expect increased SAT scores or improved PISA results. Maybe even improved mental health, let's go wild.

It's strikes me as a reasonably useful tool, personally.

Yet, where are the goods in the aggregate?

Post reply on HN