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The warning signs the AI bubble is about to burst

telegraph.co.uk

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Re: The warning signs the AI bubble is about to burst

#21

Post by rootnod3 »

pembrook wrote: post #17

A good sign the bubble is not actually bursting: a mainstream news publication predicting it. [1] It's still 1994. We won't be near the top until the Telegraph publishes an article overly exuberant about AI and saying AGI is here. If every idiot commenting on Reddit, HN, X, and mainstream news publications is pessimistic and constantly shouting "bubble!," then definitionally, we have not reached irrational exuberance…

Ah, so we are only 5 years away from he whole thing bursting? So, the papers in '94 warning about the dangers were just pessimistic idiot outlets? See ya in 5 years then.

Re: The warning signs the AI bubble is about to burst

#22

Post by timmg »

The funny thing about bubbles is that they are impossible to predict. My sense is that they always go on longer than is at all rational. (Assuming this is a bubble, who knows.)

I’m still waiting for the crypto “bubble” to burst. Seems like we are years overdue ;)

Re: The warning signs the AI bubble is about to burst

#23

Post by abullinan »

verbify wrote: post #8

The article claims that: a) AI is a bubble b) It's about to burst This is based on a study that "just 5pc of integrated AI pilots are extracting millions in value, while the vast majority remain stuck with no measurable P&L [profit and loss] impact". I think the conclusions (while possibly true) are not supported here. By comparison, in the stock market in general, just a handful of stocks provide most of the returns…

The stock market has been a bubble since the 90’s but the bursts have been minimal because the elite class uses the stock market to extract wealth from normal people. Once they find something new (enshittification) they will suck all the value out of the market and leave its husk to peasants and their meager 401ks (if they even have that). I say this because there are so many millionaires in the US, and we can’t have too many people with extra wealth or it ruins things for the elite. The 0.01% must extract every penny from the 10%, too. It used to be every millionaire felt entitled to be a billionaire, but now centibillionaires feel entitled to be trillionaires and who do you think that money is stolen from?

Re: The warning signs the AI bubble is about to burst

#24

Post by turnsout »

dharmatech wrote: post #15
deng wrote: post #10

Earlier quoted context omitted.

Fortunately, there are open-end put options, so the timing doesn't have to be THAT accurate. EDIT: to be precise: I mean open-end turbo put, which have no expiration but a knock-out.

Put options have an expiration. So I'm curious what you mean by "open-end"?

Yeah, not a thing. You can short a stock long-term, but that's an easy way to become insolvent.

Re: The warning signs the AI bubble is about to burst

#26

Post by gboss »

mrbungie wrote: post #18
anothermathbozo wrote: post #12

Given how much capital has already been committed to infrastructure development I find it very unlikely that even a Black Monday style market correction will do much to alter the medium and long term outlook for ai development and investment. Too many people talk about a bubble almost wish-casting that such a thing will make this all go away. It’s probably safest to assume your political enemies won’t be hoisted on t…

> Given how much capital has already been committed to infrastructure development I find it very unlikely that even a Black Monday style market correction will do much to alter the medium and long term outlook for ai development and investment. So let's bet on sunken cost fallacy? That didn't work out during the dotcom era. When people talk about the bubble is mostly about ending the LLM hype, not making everything a…

It kind of did, Facebook, YouTube, Google, were all enabled by the massive internet cable infrastructure investment laid in the 90s.

Re: The warning signs the AI bubble is about to burst

#27

Post by crystaln »

anothermathbozo wrote: post #12

Given how much capital has already been committed to infrastructure development I find it very unlikely that even a Black Monday style market correction will do much to alter the medium and long term outlook for ai development and investment. Too many people talk about a bubble almost wish-casting that such a thing will make this all go away. It’s probably safest to assume your political enemies won’t be hoisted on t…

Yeah. This time it’s different.

Re: The warning signs the AI bubble is about to burst

#28

Post by rootnod3 »

turnsout wrote: post #19

> “When will the internet bubble burst?” the cover story of Barron’s asked on March 20 2000. “That unpleasant popping sound is likely to be heard before the end of this year.” Again—the internet was a bubble, and yet it eventually far surpassed even the frothiest expectations. If you're investing for the short-term, do what you gotta do. The AI bubble will burst and lots of superficial companies will be washed away.…

The internet as a platform or network survived, but most of the big players in the bubble went down. Only the veeeeery big ones survived due to enough residual funds and the smaller players that didn't have a big enough claim yet.

Re: The warning signs the AI bubble is about to burst

#29

Post by gjsman-1000 »

anothermathbozo wrote: post #12

Given how much capital has already been committed to infrastructure development I find it very unlikely that even a Black Monday style market correction will do much to alter the medium and long term outlook for ai development and investment. Too many people talk about a bubble almost wish-casting that such a thing will make this all go away. It’s probably safest to assume your political enemies won’t be hoisted on t…

> Given how much capital has already been committed to infrastructure development

Here’s the stupid thing about that infrastructure: This isn’t railroads. This isn’t skyscrapers. This isn’t underseas fiber optic. These are, at the end of the day, data center GPUs that can and will start failing en-masse on normal hardware timelines.

When that happens, they will all need to be replaced, at whatever rate NVIDIAs selling at - or can sell at, if there’s any geopolitical incidents. If there aren’t enough customers, capacity shrinks, and the remaining customers must foot the bill for the new system and the previous round of investment, causing a death loop wherever there isn’t profitable use feeding into the system.

A clearer comparison: It’s like if airlines had to replace their entire fleet every 3-4 years while selling $20 tickets to anywhere; and the growth metrics look incredible when everyone’s flying at that rate. So much so, that investors paid for the first fleet round calling it “infrastructure.” Meanwhile the amount of ticket sales keeps growing when everyone finds amazing use cases and new business models from the $20 tickets. Surely, this can only get better from here, and justifies even more fleet investment.

Re: The warning signs the AI bubble is about to burst

#30

Post by century19 »

pembrook wrote: post #17

A good sign the bubble is not actually bursting: a mainstream news publication predicting it. [1] It's still 1994. We won't be near the top until the Telegraph publishes an article overly exuberant about AI and saying AGI is here. If every idiot commenting on Reddit, HN, X, and mainstream news publications is pessimistic and constantly shouting "bubble!," then definitionally, we have not reached irrational exuberance…

Maybe it is 2000 in your analogy.
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