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I'm tired of "AI" products wrapped over and selling at high rates

news.ycombinator.com

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Re: I'm tired of "AI" products wrapped over and selling at high rates

#11

Post by burutthrow1234 »

I think the current LLM trend is way overhyped. The thing these companies are doing, crucially, is extracting money from technologically unsophisticated companies and funnelling it into VC pockets. Silicon Valley bubbles are frequently incestuous. You make an HR platform and you sell it to other tech companies. You do sales analytics for tech companies. You make a bank that caters to only tech companies. The problem is that your customers all have the same risk profile as you - if interest rates go up and funding dries up you're all fucked at once. You're all just passing VC dollars back and forth.

The AI trend is luring in a wide range of non-tech businesses that aren't VC backed (ex. car dealerships). This is the golden goose for tech companies in a tough macro climate.

To be clear I think it's not adding real value for these buyers, but there's a tremendous amount of FOMO. The media has been complicit in selling AI as a panacea for small businesses in a tough climate, and the ultimate beneficiaries will be people grifting off AI hype.

Re: I'm tired of "AI" products wrapped over and selling at high rates

#12

Post by light_triad »

The hype cycle repeats again this time with AI. There will be a lot of noise and fury (after blockchain, nocode, big data, cloud etc etc). The good part is that consumers will vote with their attention and wallets. Only the products that bring real value based on non trivial insights into specific markets will survive. The rest will slowly die off and be forgotten.

Also a lot of the VC money just ends up going back to the big players that have monopolized the channels to reach customers and the systems to run those ‘businesses’.

Here’s a good overview of the scaling difficulties with AI: ‘Most AI systems today aren’t quite software, in the traditional sense. And AI businesses, as a result, don’t look exactly like software businesses. They involve ongoing human support and material variable costs. These traits make AI feel, to an extent, like a services business’ https://a16z.com/the-new-business-of-ai-and-how-its-differen...

Re: I'm tired of "AI" products wrapped over and selling at high rates

#13

Post by Workaccount2 »

PaulHoule wrote: post #6

These are expensive because ChatGPT is expensive. If you really can’t tell the difference between competitors they must compete on price so they aren’t taking a fat slice of profits either. Even if they were doing the same thing as the others but developing their own model with a better cost structure that would be innovative. To that they have to get some money together somehow, probably from investors. Two steps up…

I can't help but feel that a lot of these AI SaaS "start-ups" are just single dev or a small team running a flight by night operation to grab whatever they can before the giants come around and squash them.

A flashy platform with crafty prompt injection to hopefully net a few thousand in low effort recurring revenue.

Re: I'm tired of "AI" products wrapped over and selling at high rates

#15

Post by dvfjsdhgfv »

light_triad wrote: post #12

The hype cycle repeats again this time with AI. There will be a lot of noise and fury (after blockchain, nocode, big data, cloud etc etc). The good part is that consumers will vote with their attention and wallets. Only the products that bring real value based on non trivial insights into specific markets will survive. The rest will slowly die off and be forgotten. Also a lot of the VC money just ends up going back t…

> Only the products that bring real value based on non trivial insights into specific markets will survive.

True, but this can easily take decades - vide Uber.

Re: I'm tired of "AI" products wrapped over and selling at high rates

#16

Post by jsheard »

light_triad wrote: post #12

The hype cycle repeats again this time with AI. There will be a lot of noise and fury (after blockchain, nocode, big data, cloud etc etc). The good part is that consumers will vote with their attention and wallets. Only the products that bring real value based on non trivial insights into specific markets will survive. The rest will slowly die off and be forgotten. Also a lot of the VC money just ends up going back t…

> The hype cycle repeats again this time with AI. There will be a lot of noise and fury (after blockchain, nocode, big data, cloud etc etc).

It's often literally the same people who were riding the last hype cycle, too. The guys behind the Rabbit R1 AI wearable were NFT metaverse grifters before they became AI grifters, for example. All the annoying tech influencers who wanted you to subscribe to their blockchain newsletter are now suddenly AI experts.

Re: I'm tired of "AI" products wrapped over and selling at high rates

#18

Post by dvfjsdhgfv »

burutthrow1234 wrote: post #11

I think the current LLM trend is way overhyped. The thing these companies are doing, crucially, is extracting money from technologically unsophisticated companies and funnelling it into VC pockets. Silicon Valley bubbles are frequently incestuous. You make an HR platform and you sell it to other tech companies. You do sales analytics for tech companies. You make a bank that caters to only tech companies. The problem…

Yeah, there is a kind of hysteria regarding AI and it looks like traditional business fear that if they don't use it somehow they will perish. But there are so many traps here, such as your customers not wanting interaction with your "AI chatbots", the issues of quality (vide the Sports Illustrated scandal), and the question of whether your niche needs any "AI" at all.
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