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The biggest sign of an AI bubble is starting to appear – debt

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Re: The biggest sign of an AI bubble is starting to appear – debt

#101

Post by infecto »

algorithmmonkey wrote: post #80
infecto wrote: post #53

Earlier quoted context omitted.

Inference costs are largely break even and profitable. Now yes there is absolutely questions on the training side. You could turn off the switch today though and most of your leading models could keep the lights on.

I keep seeing everyone guessing what the margin is on inference. You say that it's largely break even. We have this person in the thread claim 80% margin ( https://news.ycombinator.com/item?id=45462442 ). These numbers are complete make believe.

Why would they be make believe? I am generalizing across multiple companies and simplifying it as much as possible as we won’t know all the cost buckets but we do know at current costs the bare inference cost of keeping the machines running is being covered.

Re: The biggest sign of an AI bubble is starting to appear – debt

#102

Post by diggan »

tencentshill wrote: post #93
diggan wrote: post #74

Earlier quoted context omitted.

> ChatGPT still lags for me daily What exactly are you referring to? Their UI seems to have troubles to load the list of conversations since like a week back, otherwise it seems fine? I mean, UX could be a lot better, but I'm experiencing anything I'd describe as "lag".

>list of conversations How many bytes could that entire list possibly be? Surely less than your average webpage ad.

Yeah, especially considering it's only fetching ~10 items at a time :) I'm guessing some index somewhere is wrong or something, as I probably have a couple of conversations through the years of using it almost daily...

Re: The biggest sign of an AI bubble is starting to appear – debt

#103

Post by emilecantin »

infecto wrote: post #67
emilecantin wrote: post #51

Earlier quoted context omitted.

Both can be true at the same time. Similar to the early days of the Internet, the dot-com bubble eventually popped, but the Internet (and dot-coms, for that matter) didn't go away. What people are saying is that this mad race to throw cash at anything that has "AI" in it will eventually stop, and what will remain are the useful things.

No the tone is generally that some mythic AI winter is going to happen because of current valuations and that AI is simply the current crypto grift.

Yeah, I saw "AI winter" mentioned elsewhere in the thread...

IMO there is a real qualitative difference between AI and crypto in terms of the durable impact it's going to have on the world. Does that mean I've bought into the AI hype? Maybe. But I think the signs are there.

Re: The biggest sign of an AI bubble is starting to appear – debt

#104

Post by dragonwriter »

infecto wrote: post #67
emilecantin wrote: post #51

Earlier quoted context omitted.

Both can be true at the same time. Similar to the early days of the Internet, the dot-com bubble eventually popped, but the Internet (and dot-coms, for that matter) didn't go away. What people are saying is that this mad race to throw cash at anything that has "AI" in it will eventually stop, and what will remain are the useful things.

No the tone is generally that some mythic AI winter is going to happen because of current valuations and that AI is simply the current crypto grift.

AI winters are a recurring phenomenon, not a myth, and, like the dotcom bust, involve a collapsing hype bubble, reductions in focussed speculative investment in the field, but the technologies that were big during the preceding hype cycle continuing to be important, and develop, though in the case of AI winters often they stop being thought of as AI and just get referred to with a name for the specific technology (often a different one than the main one they were known by in the hype cycle, e.g. “expert systems” from th blast hype cycle are largely “business rules engines” now.)

Re: The biggest sign of an AI bubble is starting to appear – debt

#105

Post by reaperducer »

JCM9 wrote: post #4

The current bubble is getting scary. When this thing pops the blast it’s going to be a real mess. The big tech firms will hurt, fire some execs in a show of “making changes,” do a bunch of layoffs across “AI” teams to show the market they’re pivoting and getting costs in order, and move on. The startups ecosystem will suffer extensive and catastrophic damage. The funding ecosystem will be set back years as this wipes…

Some of the “AI startups” will be sold in fire sales for parts so investors can at least minimize losses and most of the rest will vaporize

Sometimes literally.

Every time a tech bubble pops, it's an opportunity to upgrade your work-from-home furniture cheap.

I've gotten some nice chairs and even have a nice coffee table that used to grace an office lobby in the old WaMu tower in Seattle.

I guess that makes me a home furnishings vulture.

Re: The biggest sign of an AI bubble is starting to appear – debt

#106

Post by toomuchtodo »

diggan wrote: post #11
JCM9 wrote: post #4

The current bubble is getting scary. When this thing pops the blast it’s going to be a real mess. The big tech firms will hurt, fire some execs in a show of “making changes,” do a bunch of layoffs across “AI” teams to show the market they’re pivoting and getting costs in order, and move on. The startups ecosystem will suffer extensive and catastrophic damage. The funding ecosystem will be set back years as this wipes…

> I hope I’m wrong I kind of hope you're right. Any "hyped" industry/sector is bound to eventually needing to get back to reality, and focus on things that actually work, rather than spraying and praying prototypes and over-hyping them. The individuals and companies building real products that actually improve something will stick around, either as they are, or at least as ideas, and most of the interesting stuff ten…

Your comment made me think of this post:

https://www.palladiummag.com/2025/10/03/how-gdp-hides-indust...

Re: The biggest sign of an AI bubble is starting to appear – debt

#107

Post by tim333 »

diggan wrote: post #11
JCM9 wrote: post #4

The current bubble is getting scary. When this thing pops the blast it’s going to be a real mess. The big tech firms will hurt, fire some execs in a show of “making changes,” do a bunch of layoffs across “AI” teams to show the market they’re pivoting and getting costs in order, and move on. The startups ecosystem will suffer extensive and catastrophic damage. The funding ecosystem will be set back years as this wipes…

> I hope I’m wrong I kind of hope you're right. Any "hyped" industry/sector is bound to eventually needing to get back to reality, and focus on things that actually work, rather than spraying and praying prototypes and over-hyping them. The individuals and companies building real products that actually improve something will stick around, either as they are, or at least as ideas, and most of the interesting stuff ten…

I think it would be better to have a bust now when the actual sums that have already been spend are relatively modest (~100bn?) rather than the $1tn over the next couple of years people are talking about.

Re: The biggest sign of an AI bubble is starting to appear – debt

#108

Post by tim333 »

fhd2 wrote: post #20
JCM9 wrote: post #4

The current bubble is getting scary. When this thing pops the blast it’s going to be a real mess. The big tech firms will hurt, fire some execs in a show of “making changes,” do a bunch of layoffs across “AI” teams to show the market they’re pivoting and getting costs in order, and move on. The startups ecosystem will suffer extensive and catastrophic damage. The funding ecosystem will be set back years as this wipes…

What about the rest of the economy? Deutsche Bank recently said that the AI hype is the only thing holding the US stock market together. And if that crashes, it tends to ripple world wide. Scary stuff, at least to someone who doesn't know all that much about market resilience. With what little I know, I'm hoping for a soft pop with slow deflation. But big tech seems to just pump harder right now.

It doesn't have to be bad. Part of the weak jobs market is companies spending their money on GPUs rather than hiring humans. That could reverse.

Re: The biggest sign of an AI bubble is starting to appear – debt

#109

Post by nitwit005 »

JCM9 wrote: post #48
fhd2 wrote: post #20

Earlier quoted context omitted.

What about the rest of the economy? Deutsche Bank recently said that the AI hype is the only thing holding the US stock market together. And if that crashes, it tends to ripple world wide. Scary stuff, at least to someone who doesn't know all that much about market resilience. With what little I know, I'm hoping for a soft pop with slow deflation. But big tech seems to just pump harder right now.

Any big bust will have broader market implications, but I don’t think this has the broad systemic impact that the financial crisis did. It will likely be really ugly for those caught up in it, but a news story and minor blip to the 401k of everyone else. If you are well diversified keep your head down and keep going. If you’re a VC that heavily invested in AI, I suggest preparing for a Cat 5 hurricane now. The bigges…

I would caution that people who think they've diversified are not. A huge portion of the S&P 500 is the top handful of companies, so an index fund may mostly end up heavily invested in those firms.

Some people have shifted investments around to fix that, but I'm sure many people will be quite surprised.

Re: The biggest sign of an AI bubble is starting to appear – debt

#110

Post by nitwit005 »

TrackerFF wrote: post #16

The thing is, the models do work. They add value to me each and every day, to a degree almost no other tech has done before. But that doesn't take away the fact that this is extremely expensive stuff (not for me, but for the companies pushing the envelope), far too expensive. And it is really taking its toll on other resources, like electricity.

A bubble doesn't imply the product is bad. We all need homes, but there have definitely been housing bubbles.
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