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The AI bubble is popping; we just don't know it yet

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Re: The AI bubble is popping; we just don't know it yet

#101

Post by LogicFailsMe »

delfinom wrote: post #31
inigyou wrote: post #27

Earlier quoted context omitted.

It's holding up the entire US stock market and therefore the entire US economy and the dollar value. You probably don't want this particular Atlas to shrug.

It's inevitable though. The funny-money has outpaced actual money by lightyears at this point. On the plus side, our interest rates aren't 0% right now, so there's some room there. On the down side, our national debt generation now exceeds 125% of GDP and bond rates are shooting up because nobody wants to buy our debt.

This guy makes a decent argument that the funny money party doesn't really get started until Q3 2027. To which I would respond probably, but also probably not if another coding agent sized market opens up between now and then. But predicting the future is hard and all that.

https://overweightskepticism.substack.com/p/ais-cash-cushion...

Re: The AI bubble is popping; we just don't know it yet

#102

Post by LogicFailsMe »

horsawlarway wrote: post #55
digitcatphd wrote: post #14

I would argue we still have not even really gotten started. What do we have in the decade ahead? Robotics in every household, models 10x+ faster and more intelligent than today. Really no significant impact in life sciences, R&D, and 'offline' world / robotics today as of yet, which is where most of the value will live.

Even if we agree with this take (and I do think it's a likely take that you're right on the long term), it doesn't change that it seems likely we're in a bubble, and it probably will pop. We see a similar paradigm with lots of revolutionary technology. The initial promise is high, people get very excited, lots of money pours in, and.... 15-30 years go by before we start seeing real impact across the economy at large.…

Yes, PEs of 400 turned out to be unsustainable. Quelle Surprise?

Re: The AI bubble is popping; we just don't know it yet

#103

Post by palmotea »

LogicFailsMe wrote: post #98
inigyou wrote: post #27

Earlier quoted context omitted.

It's holding up the entire US stock market and therefore the entire US economy and the dollar value. You probably don't want this particular Atlas to shrug.

TSLA's 400 PE ratio (along with Elon Musk's trillionaire status) was never sustainable. Where I disagree is with companies running market average PE ratios supposedly being doomed as well. But also, don't count out OpenAI and Anthropic, no matter how shaky the numbers. The market has also demonstrated how to price SPCX so if they IPO, they will see their true FMV and I'm sure it's >0 and much much less than what they…

> But also, don't count out OpenAI and Anthropic, no matter how shaky the numbers. The market has also demonstrated how to price SPCX so if they IPO, they will see their free market FMV and I'm sure it's >0 and much much less than what they believe. For even in the worst case scenarios, they have valuable personnel, experience, and IP deploying AI at scale for what is to come, even if it's based on Chinese open weight models. RIP lightcone of all future value though.

You know what I'd like to see? OpenAI going bankrupt, wiping out its investors, then being bought up by IBM for a nickel. Ditto with Anthropic, but ending up with Oracle (if it's still around after running up so much debt).

Re: The AI bubble is popping; we just don't know it yet

#104

Post by soco »

inigyou wrote: post #94
theideaofcoffee wrote: post #44

Earlier quoted context omitted.

I do. The faster it happens, the faster a recovery begins and we can devote resources back to doing more practical things. Get it over with as soon as possible, rip the bandaid off, insert your idiom of choice.

Have you converted all your dollars to other currencies and non-financial assets?

But what is the point of this discussion? That we deny a possible burst because we stand to lose personally? Or is it, we believe it could burst because reasons?

Re: The AI bubble is popping; we just don't know it yet

#105

Post by palmotea »

bonoboTP wrote: post #68
habinero wrote: post #61

Earlier quoted context omitted.

We don't have sci-fi AI, and in any case "this thing is now possible, therefore [much more difficult thing] will be possible soon" is not a rational thought.

> We don't have sci-fi AI Current frontier models are absolutely sci-fi AI by any measure that existed up until the late 2010s. If you showed a current frontier agentic AI, with bidirectional speech, tool use etc. to a person from 2010, they'd say it can't be real, there must be a person inside that mechanical turk.

> Current frontier models are absolutely sci-fi AI by any measure that existed up until the late 2010s.

Sci-fi is Lt. Cmdr. Data, HAL, Skynet, Culture Minds...

> Current frontier models are absolutely sci-fi AI by any measure that existed up until the late 2010s. If you showed a current frontier agentic AI, with bidirectional speech, tool use etc. to a person from 2010, they'd say it can't be real, there must be a person inside that mechanical turk.

It wasn't a natural language chat interface that makes stupid mistakes a noticeable fraction of the time and can execute command line programs.

Re: The AI bubble is popping; we just don't know it yet

#106

Post by simianwords »

InsideOutSanta wrote: post #99
simianwords wrote: post #64

Earlier quoted context omitted.

Do you first agree that not only is the cost-per-token going down, cost per task is going down which obviously encourages people to use it more? If a car company releases a new car with higher mileage, would you suggest that cars are getting costlier?

No, cost per task is probably not going down on average. The underlying issue is that LLMs are still bad at most tasks they could be used for, so as their contexts get larger and they're able to run longer without becoming incoherent, more tokens are spent on tasks to improve the quality of output. So cost per task is probably going up on average, but so is the quality of the output.

I obviously mean cost per fixed task. Do you agree that if you fix a task, the cost is going down? Meaning you get more work done from the same cost over the years.

Re: The AI bubble is popping; we just don't know it yet

#107

Post by dwaltrip »

blanched wrote: post #96
NoDodgeQuestion wrote: post #30

Earlier quoted context omitted.

This is something I have been pondering recently. If I compare the cost of a plunger ($23.99 on Amazon) to a median plumber salary ($62,970 per year per BLS), the difference is orders of magnitude. This feels like a gap that needs to close. I suspect plungers are too cheap right now but will raise their prices to a point where only big companies will be able to afford subscriptions to use them. I think soon we will s…

Just because you can mad-lib something that makes sense at the surface doesn’t make it insightful. How are plungers comparable to LLMs?

They are both products with multiple sellers competing on price. If one seller raises their price, people can switch to the other seller.

You can't only look at how much "value" the buyer gets from the product. That's the mistake made by the original comment.

You might ask "why don't all of the LLM providers just raise their prices?". That's called price fixing or collusion, and is generally illegal.

Re: The AI bubble is popping; we just don't know it yet

#108

Post by LogicFailsMe »

palmotea wrote: post #103
LogicFailsMe wrote: post #98

Earlier quoted context omitted.

TSLA's 400 PE ratio (along with Elon Musk's trillionaire status) was never sustainable. Where I disagree is with companies running market average PE ratios supposedly being doomed as well. But also, don't count out OpenAI and Anthropic, no matter how shaky the numbers. The market has also demonstrated how to price SPCX so if they IPO, they will see their true FMV and I'm sure it's >0 and much much less than what they…

> But also, don't count out OpenAI and Anthropic, no matter how shaky the numbers. The market has also demonstrated how to price SPCX so if they IPO, they will see their free market FMV and I'm sure it's >0 and much much less than what they believe. For even in the worst case scenarios, they have valuable personnel, experience, and IP deploying AI at scale for what is to come, even if it's based on Chinese open weigh…

The karmic Schadenfreude of those outcomes would be delicious. And while Sam Altman has long been out as a lucky fool, until recently, I thought more of Dario Amodei. Not anymore.

Re: The AI bubble is popping; we just don't know it yet

#109

Post by jatora »

cmiles8 wrote: post #12

Outside a relatively small world of circular investment and FOMO feeding FOMO the general consensus seems to be “let it burn.” It appears very unlikely we will ever see an IPO of OpenAI. Anthropic appears less doomed, but still iffy at best. Tons of other large, but little discussed, AI startups are just dead-companies-walking at this point. The likes of AWS are showing good headline numbers but are taking out massiv…

"increasingly unneeded"?

In what way/shape/form is the infrastructure showing signs that are contrary to growth in need/demand? I'd really like to know if there's something I'm missing that I should keep my eye on, thanks

Re: The AI bubble is popping; we just don't know it yet

#110

Post by morkalork »

habinero wrote: post #61
sumedh wrote: post #52

Earlier quoted context omitted.

> Robotics in the household has been the realm of science fiction for decades and it still hasn't happened. Wasnt AI science fiction (research) for decades but just took couple of years after Chatgpt to become mainstream. Why do you that wont happen to robotics?

We don't have sci-fi AI, and in any case "this thing is now possible, therefore [much more difficult thing] will be possible soon" is not a rational thought.

Depends on what sci-fi you choose. We could definitely hook up an LLM to the controls for an elevator, swap out the panel of buttons with a voice interface and give it a depressed, snarky prompt and voilà we've got one of the AIs from Hitchhikers Guide to the Galaxy
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