Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Is the A.I. Boom Turning Into an A.I. Bubble?

newyorker.com

Post reply on HN
Print view View original

81–90 of 117 posts

Re: Is the A.I. Boom Turning Into an A.I. Bubble?

#81

Post by abraxas »

jonfromsf wrote: post #65
koolba wrote: post #59

Earlier quoted context omitted.

> Diversify, be reasonable and be prepared for it to happen someday. Indeed, but even with something like SPY, there’s quite the concentration in tech: Top 10 Holdings (37.99% of Total Assets) NVDA 8.07% MSFT 7.37% AAPL 5.77% AMZN 4.11% META 3.12% AVGO 2.57% GOOGL 2.08% GOOG 1.68% BRK-B 1.61% TSLA 1.61% Now that’s intentional as it’s market cap weighted. But the investing world is in for a rude awakening if things st…

Just buy $RSP or a similar equal-weightage ETF.

Those techniques rarely worked in the past as the broad stock market retreat usually affects stocks across the board. The best diversification is into uncorrelated asset classes. But there is some art in determining what's likely to remain uncorrelated. Bonds and gold are usually decent guesses.

Re: Is the A.I. Boom Turning Into an A.I. Bubble?

#82

Post by ASalazarMX »

simianwords wrote: post #50
ausbah wrote: post #32

9 of the past 5 market crashes have been successfully predicted

they wouldn’t have happened if they were predicted largely by the market.

With MSFT being worth 4 trillions right now, it looks like a legitimate AI bubble. Those valuations have entered the realm of fantasy.

Re: Is the A.I. Boom Turning Into an A.I. Bubble?

#83

Post by ASalazarMX »

gervwyk wrote: post #78

was cloud computing ever a bubble. yes. did it stabilize. sure. but its a powerful utility that shifted and created new value. the only speculation is where and by how much. the rush of new tech is always confusing, new tools requires new skills and time to find its place in the world.

The AI bubble is, IMO, more like the DotCom bubble, where every startup believed having a modern website would return investments many times over. The only companies becoming rich are the ones selling shovels.

Re: Is the A.I. Boom Turning Into an A.I. Bubble?

#84

Post by strange_quark »

matthewdgreen wrote: post #66
hodgehog11 wrote: post #18

I get this sinking feeling that this "bubble" may never burst on its own, since the political environment now is different from the 2000s. Inequality is much higher post-COVID, with the ultra-wealthy sucking up the assets of the middle class. Those assets are going into the stock market for AI companies with the objective of eventually replacing people so they never need to pay the working or middle class ever again.…

I saw a figure yesterday showing that current AI data center investment exceeds all consumer spending in terms of GDP. This is important, because consumer spending is normally 2/3rds of GDP. This means consumer spending isn't great, and data center investments probably can't sustain this pace forever. It's also not clear that there will be a return on these investments (one that flows to the specific companies seeing…

I think the figure wasn't that data center capex exceeded consumer spending, but that data center capex contributed more to GDP growth than consumer spending did. Still really really bad and indicative of a bubble, but an important difference.

Re: Is the A.I. Boom Turning Into an A.I. Bubble?

#85

Post by marcosdumay »

seanmcdirmid wrote: post #68
marcosdumay wrote: post #60

Earlier quoted context omitted.

The finance bubble is pretty much a post-ChatGTP phenomenon. There was some hype about AI before it, for completely unrelated products, with varying levels of real value behind them. What bubble there was about those has already popped long ago, missing the headlines because of the crypto hype.

If you've been with HN for awhile, or you search the archives, similar topics to "Is the AI booming turning into an AI bubble" kept popping up long before CHatGPT came out. And this was DNNs, and it was same people (e.g. Hinton and his students) who were at the forefront of that also. And no, their previous projects didn't go bust.

Well, ok, good point.

There has been people claiming that "their work will stop scaling any time now" for some 12 years. (To be fair, it can't scale forever and seems to have stopped scaling by now.)

That is a hype bubble. I maintain that it's not the bubble the article and everybody is talking about. People are talking about the billions (but the plural doesn't do it justice) running around looking for a return. A lot of their earlier projects weren't even supposed to make a profit.

Re: Is the A.I. Boom Turning Into an A.I. Bubble?

#86

Post by strange_quark »

NitpickLawyer wrote: post #45
mumbisChungo wrote: post #6

No matter how right the AI crowd is, elements of it are/will be a bubble. No matter how right the bubble crowd is, the market becoming irrationally exuberant for a brief period of time does not invalidate the technology or the rapid change we'll see as a result of it.

Yeah, this is what all the bubbleists miss. We got FAANG++ out of the last bubble, and they literally rule the world with the tech that was promised during said bubble. Catsdotcom and dogsdotcom failing had 0 impact on the tech itself. It's the same today. A lot of the hyperVCfunded startups will fail, without a doubt. But the tech giants will get their money from this tech, and it will be ubiquitous in ways we can't…

I'm not sure that the dotcom bubble leaving behind the web means that AI (and by AI I mean LLMs) are going to be transformative in the same way the internet was. Just because it happened once doesn't necessarily mean it's going to happen again.

To be clear, I don't think LLMs are going to vanish, there's clearly some things they're good for, but there's also some really big differences between the AI bubble and the dotcom bubble. People are very skeptical and worried about AI, they (the general public) aren't really using it for anything more than search, there hasn't been any clear economic data indicating that it improves productivity in a meaningful way, and a killer app hasn't really emerged that isn't a free chatbot. Plus, the majority of the money is concentrated in the same 5 or 10 companies just passing it back and forth between each other before eventually handing it over to NVIDIA. Maybe I was just too young to pay attention to the dotcom bubble, but the vibe seems completely different.

Re: Is the A.I. Boom Turning Into an A.I. Bubble?

#87

Post by jsbisviewtiful »

it_citizen wrote: post #13

> The global pandemic will tank the stock market > War in Ukraine will tank the stock market > High interest rates will tank the stock market > Tariffs will tank the stock market > IA will tank the stock market All those statements made sense to me at the time. And I have no doubt that one of these days, someone will make a correct prediction. But who the hell know what and when. Diversify, be reasonable and be prepa…

There was an article I saw this morning saying only the very top of the S&P 500 are the stocks showing substantive growth in recent years, companies below that have been relatively slow to show growth. Additionally, since the pandemic and Ukraine war started global cost of goods have been rapidly increasing, much faster than they should be. Now with AI, the market in the US is losing a lot of jobs - both entry level and above. The latest US job numbers were so terrible Trump fired someone to try and cover it up.

I'm not sure what else needs to happen to show the economy has been doing poorly for all but the richest segments. The return of a blatant and severe caste system and mass starvation?

Re: Is the A.I. Boom Turning Into an A.I. Bubble?

#89

Post by scyzoryk_xyz »

iaaan wrote: post #52
crystal_revenge wrote: post #36

Earlier quoted context omitted.

Yea, after the pandemic I've stopped making any predictions about the stock market and bubbles. It's clear we're living in an illusion, but I'm pretty sure there are enough people invested in that illusion that it won't stop until it is no longer physically possible to maintain. I'm increasing convinced that when whatever dream we're living in ends, it will end catastrophically, but I'm not even certain I'll live to…

See the documentary Hypernormalization for a more in depth look at this feeling

A great work of art. One that identifies this spectrum of feeling. But one that should be taken with a grain of salt, a subjective arrangement of visual material as captured by the BBC.

Re: Is the A.I. Boom Turning Into an A.I. Bubble?

#90

Post by godelski »

it_citizen wrote: post #13

> The global pandemic will tank the stock market > War in Ukraine will tank the stock market > High interest rates will tank the stock market > Tariffs will tank the stock market > IA will tank the stock market All those statements made sense to me at the time. And I have no doubt that one of these days, someone will make a correct prediction. But who the hell know what and when. Diversify, be reasonable and be prepa…

Some of those things did happen though.

I think there's an incorrect valuation by looking at where things are today. I mean Black Monday, the 2009 housing crash, DotCom Bubble, and others were times the market did tank yet we've since recovered.

So how are we measuring the accuracy of those predictions? From Jan to April the Trump admin was announcing tariffs. VOO's (S&P500) lowest price this year was on April 8th at $456.74 and on Feb 19th it was $563.67. We see similar patterns with covid and invasion of Ukraine. Do we consider a 25% reduction "tanking"?

I agree that with enough time that everything will work itself out. But I do not think that this means we should ignore or downplay damage done in the short term.

Post reply on HN