Comment by reducesuffering

The thing about bubbles is that everyone who thinks they’re going to pop look crazy until they pop.

And to be clear, a bubble popping doesn’t mean that AI goes away forever.

What it does mean is that we’ll see some kind of economic crash or recession, and we’ll probably see at least one big company fail or go bankrupt/restructure.

OpenAI is the company in most obvious peril.

I happen to think that Nvidia is in a more perilous position than they appear. Their hardware advancement pace is relatively weak and they’re in a crypto-like hardware bubble where they’re one technology breakthrough away from a complete collapse in demand for their AI data center solutions. They’re also doing a lot of sketchy hardware financing schemes.

Comparing to other bubbles in the past, this one could still have something like 2 years left. Patrick Boyle has a video on the topic, in which he's also very careful to point out he could easily be wrong.

The market can stay irrational for quite a while.

By all means, keep betting on this being a wild success and we'll see who's right in a little while. If you don't think this is a bubble then you're in for a ride.

Look if we are going to raid pensions and 401Ks to prop up the valuation targets of Anthropic and OpenAI longer, then the bubble can stretch further and further, but eventually datacenters have to get built and powered. It's the power generation part that no one talks about. We simply don't have enough power in the United States to scale at the rate that Anthropic and OpenAI need to prop up their absurd valuations. AI is real, but these valuations are not.

TL;DR: Ed is directionally correct, but it's anyone's guess as to the exact timing.

In the meantime I'm not going to complain about subsidized credits from the big labs. :-)