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Apple Will 'Watch Everything Burn' When the AI Bubble Bursts

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Re: Apple Will 'Watch Everything Burn' When the AI Bubble Bursts

#241

Post by telesilla »

throwaway63467 wrote: post #106
cmiles8 wrote: post #78

Apple looks better and better as every day passes. Other players going deeply into debt to build out massive infrastructure, VCs pumping up the model ecosystem that is now a total commodity. Apple’s just been sitting there with solid cashflow waiting for all this to implode and then have on-device models with their own chips. Apple will own the end device while the rest of the world is fighting over a pure commodity.…

Isn’t Apple potentially under a lot of pressure due to the DRAM prices as well as having to compete with AI for fab capacity? Before all the price hikes their products were already priced at the top of the market so I would assume that memory getting more expensive will impact their sales or margin quite a bit as they can’t subsidize hardware like AI companies do (they can of course eat into their own margins a bit w…

Couldn't Apple afford to make it's own RAM fab etc at this point and have a dedicated pipeline of parts for its own products?

Re: Apple Will 'Watch Everything Burn' When the AI Bubble Bursts

#242

Post by CoolestBeans »

throwaway63467 wrote: post #106
cmiles8 wrote: post #78

Apple looks better and better as every day passes. Other players going deeply into debt to build out massive infrastructure, VCs pumping up the model ecosystem that is now a total commodity. Apple’s just been sitting there with solid cashflow waiting for all this to implode and then have on-device models with their own chips. Apple will own the end device while the rest of the world is fighting over a pure commodity.…

Isn’t Apple potentially under a lot of pressure due to the DRAM prices as well as having to compete with AI for fab capacity? Before all the price hikes their products were already priced at the top of the market so I would assume that memory getting more expensive will impact their sales or margin quite a bit as they can’t subsidize hardware like AI companies do (they can of course eat into their own margins a bit w…

Sure, but DRAM is a commodity and is classically cyclical. This is a particularly large cycle but so long as the historic pattern holds (and there's not a ton of reason to think it won't unless the hyperscalars can go into greater debt indefinitely which given inflation and interest rates they can't) Apple just needs to get through this peak in prices, which they have a LOT of ammunition to do so.

Having to raise prices isn't a great look but when they come out the other side they can drop pirces and get a boost in volume or they can keep them high and enjoy a bigger profit margin.

Re: Apple Will 'Watch Everything Burn' When the AI Bubble Bursts

#243

Post by bigstrat2003 »

satvikpendem wrote: post #124
anthonyrstevens wrote: post #42

Earlier quoted context omitted.

>> LLM technology doesn't work very well for software development This comment is so obviously false (in my experience) I'm wondering what sort of niche environment you're working in

As I mentioned in this thread the other day, it's not worth debating AI skeptics anymore in 2026, with step changes like Fable and Sol. Maybe it was the case in 2025 and before but the field has improved rapidly that it doesn't make sense to listen to people with AI experiences prior to that who haven't touched it since. Does AI make mistakes, sure, but increasingly fewer. https://news.ycombinator.com/item?id=4905136…

My dude. People like you have been making this same claim for literally years now. We've been getting it for every single model that came out ever since 2023. It's never yet been true. Don't act like it's the fault of your interlocutors when they are skeptical of a claim you make, instead pay attention to the fact that you are following up many people who falsely claimed the same thing. It's perfectly rational to be skeptical under those conditions.

Re: Apple Will 'Watch Everything Burn' When the AI Bubble Bursts

#244

Post by NordSteve »

awakeasleep wrote: post #12
bananamogul wrote: post #2

I don't know if Ed Zitron is right about allhis analysis, but it's nice to have an alternative, well-argued narrative to the gushing torrent of AI company propaganda.

Read a little more of what he's written before you praise him, so you don't end up looking as dumb as I did. Ed may be right about some of his claims, but he is 100% a crank, and he makes so many incoherent claims I'd say that if he's right, it's in the nature of a broken clock.

Ed's not a crank, but you need to pay close attention to the topic of his proclamations to separate the wheat from the chaff.

He's right about some things -- off the top of my head:

-- OAI's perpetual fundraising, due to their losses

--Coreweave

--Circular financing

--Revenue/capex imbalance

...all forensic economics analyses.

He's often wrong when on the topic of capabilities and adoption -- he mistakes a snapshot for a trajectory, and treats current limitations as permanent:

--Hallucination/unreliability an unsolvable problem

--OpenAI failing

--AI capabilities have plateaued / models will stop getting better

--Saying Microsoft's cancelled leases meant the bubble was popping

--Agents a marketing fad

--Gross miscalculation of OAI 2025 revenue

--Lack of adoption

--AI not getting more efficient (compared to 10-40x reduction in inference costs YoY)

--Repeating "95% of pilots fail" but ignoring massive bottoms-up adoption

Christensen got this right when he had the insight to judge a technology by its rate of improvement relative to what a market needs, not by whether it's good enough today.

Put Zitron back at the early days of the integrated circuit and imagine what he would have written about the technology.

Some open predictions:

--Bubble is going to burst -- I tend to agree with the thesis that "there is some marginal capacity being planned/built today that will never pay back its capex"

--Losses mean there's no viable business here -- the recent moves by all of the players to some form of usage based pricing show there's price discovery occurring. I don't know of anyone who is stopping using LLMs because of the pricing changes...it's just changing their behavior.

Re: Apple Will 'Watch Everything Burn' When the AI Bubble Bursts

#245

Post by duhhhhh1212 »

simonw wrote: post #108
jayd16 wrote: post #68

Earlier quoted context omitted.

Well hold on. "They" also thought tokenmaxxing was a good idea, until they didn't. Whether companies pay will come down to the bottom line once the hype around the country club dies down a bit and for that it's still TBD on the actual product cost impact.

Yeah, tokenmaxxing was obviously stupid. Setting a limit is what happens when the adults in the room stop being stupid.

It's hard to read this take seriously, when you promoted a company spending $1k per engineer per day on LLM usage.

Re: Apple Will 'Watch Everything Burn' When the AI Bubble Bursts

#246

Post by bigstrat2003 »

satvikpendem wrote: post #129
simonw wrote: post #108

Earlier quoted context omitted.

Yeah, tokenmaxxing was obviously stupid. Setting a limit is what happens when the adults in the room stop being stupid.

Not sure about that. As I replied elsewhere, it's a forcing function: > People misunderstand the point of the tokenmaxxing time period, it was to force people to use AI so as to not have them stuck in their way, as some people are, and then to evaluate how it can help the company. https://news.ycombinator.com/item?id=49047448#49047826

That is a truly commendable steelman. But let's be honest, there's basically no chance that was true. Management is frequently stupid enough to not think through the second order effects of their policies, and that is likely what happened this time as well.

Re: Apple Will 'Watch Everything Burn' When the AI Bubble Bursts

#247

Post by keeda »

cmiles8 wrote: post #78

Apple looks better and better as every day passes. Other players going deeply into debt to build out massive infrastructure, VCs pumping up the model ecosystem that is now a total commodity. Apple’s just been sitting there with solid cashflow waiting for all this to implode and then have on-device models with their own chips. Apple will own the end device while the rest of the world is fighting over a pure commodity.…

Curious, why would Apple want to wait for "all this" to implode? They've had on-device silicon for AI for eons now (in AI-years), so they could have been executing their strategy, whatever it is, all this time, no?

My outsider take is that Apple leadership never really believed in the capability of GenAI, and hence kept pursuing their pre-LLM strategy. An interesting signal about how that's working out now is that their AI org leadership was overhauled recently.

Re: Apple Will 'Watch Everything Burn' When the AI Bubble Bursts

#248

Post by tim333 »

PaulRobinson wrote: post #232
tim333 wrote: post #222

Earlier quoted context omitted.

An example of him in July 2024: https://www.wheresyoured.at/pop-culture/ >And yes, that sound you hear is the slow deflation of the bubble I've been warning you about since March... >How does GPT – a transformer-based model that generates answers probabilistically (as in what the next part of the generation is most likely to be the correct one) based entirely on training data – do anything more than generate paragrap…

He's not wrong about the numbers, and you may be seeing what you want to see a little, here. Fable scoring OK on some benchmarks does not the mean the investment has financially paid off, because that's not how ROI works. You're right that no bubble has deflated, but I think we can all see that a) there seems to be a bubble - I'm old enough to remember the dot-com era bubble, and this definitely feels like that, b) t…

I agree it's a bit like the dot com bubble and I don't think he's wrong about everything but he seems to think it's a bit more like the NFT craze with nothing there rather than dot coms where the web/internet was of real importance.

Re: Apple Will 'Watch Everything Burn' When the AI Bubble Bursts

#249

Post by SllX »

telesilla wrote: post #241
throwaway63467 wrote: post #106

Earlier quoted context omitted.

Isn’t Apple potentially under a lot of pressure due to the DRAM prices as well as having to compete with AI for fab capacity? Before all the price hikes their products were already priced at the top of the market so I would assume that memory getting more expensive will impact their sales or margin quite a bit as they can’t subsidize hardware like AI companies do (they can of course eat into their own margins a bit w…

Couldn't Apple afford to make it's own RAM fab etc at this point and have a dedicated pipeline of parts for its own products?

RAM production is historically not a great business to be in. It’s a mint today, but it’s an incredibly tough business to break into & by the time any hypothetical Apple RAM fab is up & running, it will already be losing money.

To give you some idea, here’s an Asianometry video describing Taiwan’s prior DRAM attempts: https://youtu.be/ehT3U935Pww

Re: Apple Will 'Watch Everything Burn' When the AI Bubble Bursts

#250

Post by sodapopcan »

LogicFailsMe wrote: post #226
sodapopcan wrote: post #204

Earlier quoted context omitted.

> But I think AI is here to stay and it has already proven useful. Yes, I said as much. I've said this is two other places in this thread, but when they are talking AI being useful, they aren't just talking about for software development. The software industry is seeing far more AI adoption, by a very large margin, than any other industry, and the success of the current companies hinges on it being heavily adopted ev…

So then what is the deadline for AI reaching into all these new industries (or are you asserting it will never happen)? And you're right, technical people latch onto him sounding like a horse's ass on technical subjects and why shouldn't they? IMO this isn't the same as Elon's endless empty FSD promises (which I called out the whole danged time from the beginning FWIW), but I get why people assume it is, I just don't…

Sorry, you're taking this up way too many notches for me to want to continue this convo. But as I said, I have no interested in defending Zitron in general, I made no claims about him being groundbreaking, and I don't even take him too seriously. I was responding to your points around AI's usefulness and how the discussion is almost always localized around "AI as a software development tool" here on HN. For me he's just a soothing counter-voice to the awful and inescapable hype and doomerism coming straight from the American AI companies themselves (as well as people I've been forced to interact with in the programming community). He does show numbers about why he thinks some of them aren't aren't going to survive. This is all speculative (not sure why I feel I have to say this but I feel I do).

> So then what is the deadline for AI reaching into all these new industries?

Obviously the "deadline" would before the US companies go bust (again, IF they do). And I'm confused about your use of "new" here but I'm going to assume you mean "other existing industries that haven't adopted yet." The discussions around this are that several industries already jumped on AI then walked it back, so it's more that we're already past the "reaching in" stage. I don't have links for you but there have been several articles about companies firing people "because AI" then hiring them back. I suppose AI drive-thru order takers would work as another example. Again, I don't have the numbers on this myself. And again-again, none of this is "in defence of Ed Zitron" or "this is why Ed Zitron is great" or any such thing, but these are the things he talks about (and once again, no, it's nothing groundbreaking).

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