How the AI Bubble Bursts • Hacker News Board

Re: How the AI Bubble Bursts

#31

Post by piker » Mon, Mar 30, 2026, 1:06 PM UTC

> They lose a big customer for their cloud services. Even worse considering that now, using the AI they helped fund, everyone can compete with their sub-par products. GitHub is a good candidate for disruption, and that’d be just the start.

Look, I'm a Microsoft hater like the rest of us, but calling Microsoft's products sub-par discredits the author a good bit. I invite anyone who thinks this to try and compete with them. Go after something like Word, for example. Then prepare to be awed by what some of the most brilliant programming minds ever can produce after grinding for four decades.

Re: How the AI Bubble Bursts

#32

Post by baq » Mon, Mar 30, 2026, 1:06 PM UTC

atwrk wrote: post #20

nopinsight wrote: post #11

> nobody is sure if even their metered pricing is profitable This is most likely wrong. Lab executives insist that serving tokens is profitable. It's the cost of training next-gen models that requires them to keep raising ever larger rounds. More importantly, many independent providers price tokens of open-weight models at a fraction of Anthropic's prices.

But are they actually profitable, or do they employ creative accounting where only parts of overhead expenses are counted against all of inference revenue, similar to what Uber did? OpenAI's numbers show that they definitely are not profitable on inference, and even worse, revenue growth scaled linearly with inference cost from 2024 to 2025, which means they can't outgrow this problem. See https://www.wheresyoured.at…

If they shut down all training today they’d be absolutely printing money for the next couple quarters and then die with a bang once the other lab releases the next frontier to the public.

Re: How the AI Bubble Bursts

#33

Post by _puk » Mon, Mar 30, 2026, 1:06 PM UTC

256BitChris wrote: post #3

I could see OpenAI hitting financial issues which triggers some media induced panic and for people to claim the AI bubble has popped. However, the core utility of the best AI (read: Anthropic's ATM, by miles), will still exist and be leveraged by those who have learned to use it well. I could also see the exponentially declining power requirements offsetting the exponential-but-slower rate of AI compute demand, which…

A lot of anthropic's recent improvements are coming from the task focus and improved orchestration around the models, not purely massive changes in the models themselves.

This bodes well for us being at a point that even if the bubble burst, we'd still have usable AI going forward.

Re: How the AI Bubble Bursts

#34

Post by jqpabc123 » Mon, Mar 30, 2026, 1:06 PM UTC

256BitChris wrote: post #3

I could see OpenAI hitting financial issues which triggers some media induced panic and for people to claim the AI bubble has popped. However, the core utility of the best AI (read: Anthropic's ATM, by miles), will still exist and be leveraged by those who have learned to use it well. I could also see the exponentially declining power requirements offsetting the exponential-but-slower rate of AI compute demand, which…

I think of it like the old mainframes in the 70s

I think this is a good comparison to current AI.

billions of them in our pockets.

AI in your pocket (but first on the desktop) is a real possibility.

Re: How the AI Bubble Bursts

#35

Post by phantom784 » Mon, Mar 30, 2026, 1:06 PM UTC

nopinsight wrote: post #11

> nobody is sure if even their metered pricing is profitable This is most likely wrong. Lab executives insist that serving tokens is profitable. It's the cost of training next-gen models that requires them to keep raising ever larger rounds. More importantly, many independent providers price tokens of open-weight models at a fraction of Anthropic's prices.

Do tokens just cover ongoing operating costs, or are they also able to pay back the cost of training that model originally?

Re: How the AI Bubble Bursts

#36

Post by myspy » Mon, Mar 30, 2026, 1:07 PM UTC

general_reveal wrote: post #15

myspy wrote: post #9

Earlier quoted context omitted.

Why?

You have to be uneducated to even read an “AI is bubble article”. Anyone working this stuff knows how much more compute we need.

Thanks for clearing this up, as I don't work in that area.

Personally I'd say that it's a problem that prices of consumer goods go up that far to satisfy this part of the market. We could need a more sensible way to advance the technology.

Re: How the AI Bubble Bursts

#37

Post by gedy » Mon, Mar 30, 2026, 1:07 PM UTC

nopinsight wrote: post #11

> nobody is sure if even their metered pricing is profitable This is most likely wrong. Lab executives insist that serving tokens is profitable. It's the cost of training next-gen models that requires them to keep raising ever larger rounds. More importantly, many independent providers price tokens of open-weight models at a fraction of Anthropic's prices.

Buying and driving a new car off the lot costs the manufacturer nothing at that moment, but what happens before that is important to account for.

Re: How the AI Bubble Bursts

#38

Post by mrob » Mon, Mar 30, 2026, 1:08 PM UTC

Chance-Device wrote: post #18

From the beginning of this I’ve wondered the same question: how do these companies justify spending such massive amounts now (and 3 or 4 years ago) when software and hardware efficiencies will bring down the cost dramatically fairly soon? They basically decided that scaling at any cost was the way to go. This only works as a strategy if efficiency can’t work, not if you simply haven’t tried. Otherwise, a few breakthr…

Because whoever wins the AI race (assuming they don't overshoot and trigger the hard takeoff scenario) becomes a living god. Everybody else becomes their slave, to be killed or exploited as they please. It's a risky gamble, but in the eyes of the participants the upside justifies it. If they don't go all in they're still exposed to all the downside risk but have no chance of winning.

I don't expect hardware prices to go down unless the third option (economic collapse) happens before somebody triggers the dystopia/extinction option.

Re: How the AI Bubble Bursts

#39

Post by techpression » Mon, Mar 30, 2026, 1:08 PM UTC

nopinsight wrote: post #11

> nobody is sure if even their metered pricing is profitable This is most likely wrong. Lab executives insist that serving tokens is profitable. It's the cost of training next-gen models that requires them to keep raising ever larger rounds. More importantly, many independent providers price tokens of open-weight models at a fraction of Anthropic's prices.

I wouldn't trust those claims from any private companies, even public ones play the most insane tricks in earnings calls to inflate numbers or heck, just make up new ones.

I'm not saying they're wrong, but I don't take much stock in their words.

Re: How the AI Bubble Bursts

#40

Post by baggachipz » Mon, Mar 30, 2026, 1:08 PM UTC

elorant wrote: post #6

I feel that even if the bubble bursts hardware prices will still take years to normalize. So no clear benefit for the average consumer here.

Consumers and retail investors will bear most of the brunt from this bubble. Even taxpayers, as the government will most likely bail out the "too big to fail" ai companies in the "race against China". All based on bullshit, hype, and greed.