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How the AI Bubble Bursts

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Re: How the AI Bubble Bursts

#291

Post by Forgeties79 »

sigmoid10 wrote: post #65
joshstrange wrote: post #53

> RAM prices are crashing because new models won’t need as much Reality begs to differ [0] and following the link for that text goes to an article [1] where they talk about Google's TurboQuant which supposedly will lower the RAM requirements. Now if that means RAM prices come down (as speculated, not reported on, in the link) or the AI companies just do more things with their extra ram is yet to be determined. The fa…

Yeah, I also stopped reading at that point. If I want a bunch of random, made up facts to sell lukewarm opinions or steer the uneducated masses, I'll tune in on a Trump press conference. Why does this feel like someone is desperately trying to make reality mirror his flailing market bets?

Sometimes it's real easy to see who has risky short positions right?

Re: How the AI Bubble Bursts

#292

Post by Throaway1975123 »

vekker wrote: post #251
hirako2000 wrote: post #117

Earlier quoted context omitted.

Tulips sales also skyrocketed. Seriously, what value are tokens providing other than justifying layoffs. Concretely. Today. Not in the speculating scenario that cardiologist could be replaced with models. We see this new trend of agentic coding, again a promise software will be written that way going forward, despite the number of fiasco already experienced when trusting a model turned bad. The use case may provide v…

> Seriously, what value are tokens providing other than justifying layoffs Like the OP said, it's incredible how polarizing this debate is. When I read comments like yours, I feel like a significant part of the global workforce in IT must be living on another planet? Or they never really used Claude Code, Codex, OpenCode, ... intensively before because of company policies? I legitimately am at least 10x more producti…

I created 5 websites this year and am working on 3 prototype games. For free. Without any knowledge of coding beforehand.

Re: How the AI Bubble Bursts

#293

Post by fsloth »

aurareturn wrote: post #230
rhaen wrote: post #175

Earlier quoted context omitted.

Tulip futures skyrocketed, it was economic speculation on a useless asset, not supply and demand. Crypto is the analogy, not AI. Given that the major AI labs other than GDM are private, this is even more true. Agentic coding absolutely blew up from demand , users are not being tricked into paying $200 a month, and they’re not complaining about hitting rate limits because it’s useless.

users are not being tricked into paying $200 a month I can't believe people actually believe that people and companies are tricked into paying for tokens. My $20 Codex subscription is so useful, I can easily see myself paying $200 for it. This belief is so common amongst AI collapse people online. I'm guessing these people have only used free ChatGPT or worse, they use Windows and get Copilot shoved down their throat…

I'm paying $20 for Codex and $90 for the Claude Max plan. They are a "pry from my cold dead fingers" product for me.

IMO if someone tried this tech last time 6 months ago, or their only exposure is eg. via MS copilot, they do have a rational reason for skepticism. No technology of this complexity has improved this rapidly in my memory (well, ok, we had the CPU speed races from 90's to early 2000's).

Re: How the AI Bubble Bursts

#294

Post by matheusmoreira »

hirako2000 wrote: post #117
Aperocky wrote: post #58

Earlier quoted context omitted.

Demand of tokens is absolutely skyrocketing. And unlike the traditional "this will replace humans right away", I think what this introduce is a lot of incentive to spread those token in places where there was never any incentive to hire a software engineer for previously. In turn, that will drive a lot of business activity in those area that will potentially fail given the current quality of the output. This feels li…

Tulips sales also skyrocketed. Seriously, what value are tokens providing other than justifying layoffs. Concretely. Today. Not in the speculating scenario that cardiologist could be replaced with models. We see this new trend of agentic coding, again a promise software will be written that way going forward, despite the number of fiasco already experienced when trusting a model turned bad. The use case may provide v…

> Seriously, what value are tokens providing other than justifying layoffs. Concretely. Today.

Claude helped me implement a ridiculous amount of features in my programming language. It's helped me migrate the heap to an easily moveable index-based object space. It's helped me implement generators. It's helped me implement a new memory allocator. It's helped me fix a ridiculous amounts of bugs and make a huge number of small improvements everywhere. Its ability to provide me repository wide code review was a game changer for a solo developer like me. And it's doing so much more than that. I got more things done in the past few weeks than previous months even though I'm evaluating, learning, understanding and rewriting the AI output.

It's actually addictive to build things with Claude. The usage limits are starting to make me anxious, just like withdrawal syndrome. I applied for their open source max subscription program even though I'm too small for it because who knows, I might get in anyway and it costs nothing.

AI is quite literally a world changing technology. I hope the open models keep steadily progressing and that hardware remains available to all so we can run our own models on our own computers one day.

Re: How the AI Bubble Bursts

#295

Post by H8crilA »

wavemode wrote: post #269
H8crilA wrote: post #90

Earlier quoted context omitted.

Where to go next? I don't think anyone has gotten close to automating everyday PC usage, likely via screen capture and raw keyboard+mouse inputs. Imagine how much bigger would that market be than vibecoding.

tbh I don't think this use case is going to be as big as people seem to think there are a lot of reasons, but in brief - I think AI desktop use is a product that the average person isn't going to get much value out of. to make an analogy - the creators of Segway thought people would buy them in large numbers, but it turned out most people don't mind walking manually (or at least, don't mind it enough to spend money o…

I was thinking more remotely managing the computer in a warehouse, replacing the mouse of an architect, or some physical object engineer. That your grandma can finally find Discord by speaking to such a bot is just a nice side effect.

Re: How the AI Bubble Bursts

#296

Post by gruez »

marcyb5st wrote: post #288
fcarraldo wrote: post #162

Earlier quoted context omitted.

Well, not GP, but I do. Let’s look at the numbers: Median senior SWE salaries in SF: https://www.levels.fyi/t/software-engineer/levels/senior/loc... Median income in metro areas: https://www.cnbc.com/2024/07/11/the-median-salary-for-the-25... Engineering salaries are significantly higher than nearly every other industry on average and on median. Much of this is driven by VC funding rather than sound, profitable, boot…

Isn't salary a proxy of how hard to replace one person or a group of persons is or how valuable they are? There was a surge in demand for SWEs and scarcity brought salaries up. Are them too high? Hell no. On average, my colleagues and me generated ~2M$ each in 2025 for our company, while we get payed a fraction of that (grants and bonuses included). If you look at net income per employee we are at around 700k each in…

>There was a surge in demand for SWEs and scarcity brought salaries up. Are them too high? Hell no. On average, my colleagues and me generated ~2M$ each in 2025 for our company, while we get payed a fraction of that (grants and bonuses included). If you look at net income per employee we are at around 700k each in 2025.

So by that logic, housing in coastal cities also aren't "overinflated"? After all, like SWEs, they're they're also scarce and in demand. They're also providing enormous value to the people buying/living in them, otherwise they'd be living in Oklahoma or whatever and paying a fraction of the cost.

Re: How the AI Bubble Bursts

#297

Post by malfist »

naravara wrote: post #256
malfist wrote: post #209

Earlier quoted context omitted.

Thats like saying a restaurant is profitable because they're making money selling meals if you ignore the costs of ingredients. Of course they are profitable if you ignore their cost to bring a product to market.

That’s the wrong analogy. Model training is more like the setup costs of developing the menu and training staff. What’s driving the costs is important when talking about financial sustainability. If it’s mostly coming from optional R&D investments instead of the direct costs of producing the food then you can simply not exercise the option and be profitable. If it’s more coming as a variable cost that scales with eac…

These companies are continually training new models. This is not a long term amortized cost, it's actual COGS.

Yeah, sure you can ignore the cost of purchasing the building for the restaurant for most profitability calculations, but if every year or two you were tearing down your old building and building a new one, you better believe that has to be in your profitability calculations.

Re: How the AI Bubble Bursts

#298

Post by keybored »

9rx wrote: post #253
SirensOfTitan wrote: post #226

Earlier quoted context omitted.

I think calling it inflated is to play to a narrative that labor was overvalued broadly in tech. Salaries across industries in the US have remained flat since the 1970s. Calling the one sector that can provide access a middle class lifestyle inflated s to play into a narrative capital is eager to tell, even if OP didn't intend that.

> Salaries across industries in the US have remained flat since the 1970s What do you mean? The real (meaning adjusted for inflation) hourly wage in the US has increased by around 20% since 1970. What has changed since the 1970s is that wages are no longer coupled to productivity. Perhaps that is what you are thinking of? But that should be an obvious truism for anyone in tech. We create the very things that cause th…

> We create the very things that cause that to be the case!

What happened in the 1970’s was the NeoLiberal shift and wasn’t caused by software.

Re: How the AI Bubble Bursts

#299

Post by fsloth »

infecto wrote: post #270
skeeter2020 wrote: post #257

Earlier quoted context omitted.

dotcom was maybe 100B a year focused on the US and mostly VCs. AI is perhaps 250B global VC (with more than half of ALL VCs concentrated in one sector) and another 800B+ from non-VC. These numbers are basically a guess but structurally we are set up for something much, much worse.

But unlike the dot com boom, demand for tokens has not let up and there is increasing demand. I don’t know where it falls, certainly companies don’t get or right and they either over or under build. With the current demand rate changes it’s hard to understand why you would stop building today.

Yeah, this is the difference.

2000's tech bubble was caused among other things over-investment to infrastructure and technology that had no users yet.

Totally different setup.

Does not mean AI boom will not turn to bust, but weak analogues generally don't help with understanding complex systems.

Re: How the AI Bubble Bursts

#300

Post by [deleted] »

9rx wrote: post #236
lotsofpulp wrote: post #220

Earlier quoted context omitted.

That prices change from one point in time to another is a trivial fact. “Inflated due to a speculative environment” is not an accurate way to frame labor prices that held for many years. At that point, the prices were simply high due to high demand relative to supply (compared to other types of labor).

> At that point, the prices were simply high due to high demand relative to supply That goes without saying. The investigation here is into demand. Which was said to be overinflated due to speculation. As noted, many of the companies hiring the developers did not have viable businesses.

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