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Jeff Bezos says AI is in a bubble but society will get 'gigantic' benefits

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Re: Jeff Bezos says AI is in a bubble but society will get 'gigantic' benefits

#91

Post by rootusrootus »

rhetocj23 wrote: post #44
zerosizedweasle wrote: post #36

Earlier quoted context omitted.

The biggest problem is the infrastructure left behind from the Dotcom boom that laid the path for the current world (the high speed fiber) doesn't translate to computer chips. Are you still using intel chips from 1998? And the chips are such a huge cost, and being backed by debt but they depreciate in value exponentially. It's not the same because so much of the current debt fueled spending is on an asset that has ve…

Personally I think people should stop trying to reason from the past. As tempting as it is, it leads to false outcomes because you are not thinking about how this particular situation is going to impact society and the economy. Its much harder to reason this way, but isnt that the point? personally I dont want to hear or read analogies based on the past - I want to see and read stuff that comes from original thinking…

IME the number of times where people have said "this time it's different" and been wrong is a lot higher than the number of times they've said "this time is the same as the last" and been wrong. In fact, it is the increasing prevalence of the idea that "this time it's different" that makes me batten down the hatches and invest somewhere with more stability.

Re: Jeff Bezos says AI is in a bubble but society will get 'gigantic' benefits

#92

Post by harmmonica »

Do I have this right that there have been no or at least very few pure AI IPO's during this cycle (I can't actually think of a single one)? So it's dissimilar to dotcom in that regard because during that time countless dotcoms went public with sky-high valuations and then failed. A bunch of reputable companies also went or were already public during that time and those saw huge valuation drops so that's more analogous to what could happen in the public market (NVDA, for instance, could pull a Cisco and drop "catastrophically," but survive just fine).

That would cause a lot of pain for those shareholders, but would that be somewhat contained given the public "AI" companies for the most part have strong businesses outside of AI? Or are these market caps at this point so large for some of these AI public companies that anything that happens to them will cause some kind of contagion? And then the follow up is if the private AI companies collapse en masse is that market now also so big that it would cause contagion beyond venture capital and their investors (fully aware that pensions and the such are material investors in VC funds, but they're diversified so even though they'd see those losses maybe the broader market would keep them from taking major hits).

Not giving an opinion here, though my knee jerk is to think we're due for a massive drop, but I've literally been saying that for so long that I'm starting to (stupidly) think this time is different (which typically is when all hell breaks loose of course).

Re: Jeff Bezos says AI is in a bubble but society will get 'gigantic' benefits

#93

Post by yeasku »

macNchz wrote: post #88
yeasku wrote: post #77

Earlier quoted context omitted.

In 2000 6% of the population had access to internet. In 2002 I was woking making webs and setting up linux servers and I did not have internet at home.

This is pretty location specific—in the US 42% of households had home internet in 2000. https://www.statista.com/statistics/189349/us-households-hom...

That web is not a good source.

Re: Jeff Bezos says AI is in a bubble but society will get 'gigantic' benefits

#94

Post by ozmodiar »

jmclnx wrote: post #33

My translation of what Jeff says: "AI is in a bubble but billionaires will get 'gigantic' benefits" I see no benefit to anyone unless you can live off your stock portfolio and can easily ride through periods where your portfolio can suffer a 50% loss.

Honestly, during the dotcom bubble at least workers were getting paid and jobs were abundant. Things didn't start getting bad for workers until it popped. We're supposed to be in the 'positive' part of the AI bubble and people already seem desperate and out of hope.

Everyone not directly involved seems to want AI to pop. I'm not sure if that says anything about its longevity. Not very fun to have a bubble that feels bad on both sides.

Re: Jeff Bezos says AI is in a bubble but society will get 'gigantic' benefits

#95

Post by themafia »

dmix wrote: post #64

I'm paying for 3 different AI services and our company and most of my team is also paying money for various AI stuff. Sounds like a real industry to me. There's just going to be VC losers as always, where usually "losing" is getting bought by a bigger company or aquihires instead of 100xing or going public.

> 3 different AI services

Why three? Will you ever be in a position where one will do it for you?

> and most of my team is also paying money for various AI stuff.

And what are they using it for?

> Sounds like a real industry to me.

Sounds like early adopter syndrome to me. We'd have to know more about your business to take this out of the realm of hazy anecdotes.

Re: Jeff Bezos says AI is in a bubble but society will get 'gigantic' benefits

#96

Post by renjimen »

somewhereoutth wrote: post #43

My understanding is that the cost of training each next model is very very large, and a half trained model is worthless. Thus when it is realised that this investment cannot produce the necessary returns, there will simply be no next model. People will continue using the old models, but they will become more and more out of date, and less and less useful, until they are not much more than historical artifacts. My poi…

Many argument the current batch of models provide a large capability overhang. That is, we are still learning how to get the most out of these models in various applications

Re: Jeff Bezos says AI is in a bubble but society will get 'gigantic' benefits

#98

Post by missedthecue »

harmmonica wrote: post #92

Do I have this right that there have been no or at least very few pure AI IPO's during this cycle (I can't actually think of a single one)? So it's dissimilar to dotcom in that regard because during that time countless dotcoms went public with sky-high valuations and then failed. A bunch of reputable companies also went or were already public during that time and those saw huge valuation drops so that's more analogou…

There aren't very many IPOs in general. There were about 8000 publicly traded companies in the US in Jan 2000. Today there are about 3950. A lot of the AI related IPOs have been the infra like CoreWeave and Nebius.

Re: Jeff Bezos says AI is in a bubble but society will get 'gigantic' benefits

#99

Post by Duralias »

wmf wrote: post #67
somewhereoutth wrote: post #43

My understanding is that the cost of training each next model is very very large, and a half trained model is worthless. Thus when it is realised that this investment cannot produce the necessary returns, there will simply be no next model. People will continue using the old models, but they will become more and more out of date, and less and less useful, until they are not much more than historical artifacts. My poi…

Models don't become out of date now that deep research exists.

So with every prompt you are expected to wait that long? I highly doubt general people will be willing to wait, it also doesn't seem entirely viable if you want to do it locally, less bandwidth and no caching akin to what a literal search engine of data can do.

Re: Jeff Bezos says AI is in a bubble but society will get 'gigantic' benefits

#100

Post by mrosett »

harmmonica wrote: post #92

Do I have this right that there have been no or at least very few pure AI IPO's during this cycle (I can't actually think of a single one)? So it's dissimilar to dotcom in that regard because during that time countless dotcoms went public with sky-high valuations and then failed. A bunch of reputable companies also went or were already public during that time and those saw huge valuation drops so that's more analogou…

IPOs aren't what they once were. The burden of being a public company has increased (SOX and related public company costs are $5-10M/year), so companies are far more likely to stay private. That has created a positive feedback cycle as the private funding ecosystem has become increasingly robust, which is why you see so many $100B+ private companies.

Also keep in mind that the biggest companies during that bubble had peak market caps of ~500B and then lost ~90%, so 400-500B in losses each and total internet related losses of a couple trillion. If NVDA lost 90%, it would be down 4 trillion dollars, or twice that total just by itself.

AI company valuations collapsing would have meaningful impacts on the broader market. Big pension/mutual funds are important sources of capital across every sector, and if they're taking big losses on NVDA, GOOG, and a portfolio of privates, it will have a chilling effect on their other activity.

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