Comment by dgellow
2 days ago
> This is exactly why all these people talking about a “bubble” I think are misguided.
A bubble doesn’t say anything about how useful the underlying technology is. We are in an AI bubble, in the sense that the allocated resources is completely out of line with the underlying businesses. AI companies would literally need the entire world as their TAM, using their services non stop to justify the valuations and level of expenditures we are seeing. What you describe is literally the symptoms of a bubble
> AI companies would literally need the entire world as their TAM, using their services non stop to justify the valuations and level of expenditures we are seeing. What you describe is literally the symptoms of a bubble
That’s not true. Apple alone is valued higher than the largest three AI companies combined.
I don't see how that's related. Apple has high margin on the hardware they sell, extremely optimized logistics, they offer a whole ecosystem of hardware and services. They are in a completely different line of business than AI vendors
You said: "AI companies would literally need the entire world as their TAM, using their services non stop to justify the valuations and level of expenditures we are seeing."
You asserted that AI companies would need "the entire world as their TAM using their services non stop" to justify a few trillion in valuation. Yet Apple has a $5 trillion valuation just selling phones and computers, mostly to consumers and not businesses. Google built a $2 trillion valuation by the end of 2021 mainly on search and ads. Our economy is very large and you don't need to take over "the entire world" in order to justify a few companies with $1 trillion valuations.
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