Comment by zarzavat
3 hours ago
AI just solved a millennium prize problem. In a matter of days. Because of a rumor that someone else solved the same problem with AI.
What exactly would AI have to do in order to not be called a bubble?
3 hours ago
AI just solved a millennium prize problem. In a matter of days. Because of a rumor that someone else solved the same problem with AI.
What exactly would AI have to do in order to not be called a bubble?
How these things are even connected?
The current prices the largest players set for their models are not profitable, they bleed money. Eventually they will "fix" it. It could end up making their services less affordable and it could cascade other businesses and services that are dependent on them go out of business
> The current prices the largest players set for their models are not profitable, they bleed money.
How are the open-weight Chinese models staying ~6-12 months behind on widely distributed / commodified hardware, and serving for even lower prices?
By distilling the US SOTA models, which is cheaper than creating from scratch.
You don’t understand what a bubble is. How good the technology is is irrelevant. That has nothing to do with an economical bubble. It’s all about massive capital misallocation driven by a frenzy of FOMO, which is specifically the case for AI investments. Economically speaking what is happening is the most obvious bubble possible, it follows everything that would be expected from a bubble where companies are chasing an ill-defined grandiose dream, based on a new technology we don’t understand and has very dubious ROI, selling some vague future utopia, allocating massive amount of capital to build infrastructure dedicated to a very early versions of that technology.
As things mature there will be a correction, ie the bubble will pop.
I would recommend to read « Boom and Bust: a global history of financial bubbles » https://pure.qub.ac.uk/en/publications/boom-and-bust-a-globa...
As long as the data centers are utilized and generating revenue, I see no reason for a correction or any misallocation of capital for the infrastructure buildout.
And today these data centers are fully utilized. OpenAI tweeted today that they may need to disable new signups for the Pro subscription in the near future due to capacity constraints.
A year from now, who knows what the situation is going to be like. It seems quite possible that robotics, self driving, research, etc. drive even more demand and revenue.
Stating with any certainty that allocating capital to build infrastructure is a mistake and that there is a correction coming seems unserious.
You should see all the misallocation that was put towards valve-based computing. Why didn't they just all arrive at the correct answer without investing in discovery first?
Its resource allocation problem, same happened with .com bubble, lots investors put tons of money into dark fibers. Were they useless? No its very useful.
If you want check a example company from the .com days check cisco, their stock peaked at 75 then crashed hard and only managed hit that again thanks for the AI bubble.
Per Anthropic's prospectus: generate $30T (~94% of 2026 US nominal GDP) in revenue.
If non AI companies, in particular non tech companies start making unprecedented amounts of profit, inflation adjusted I will concede.
That being said I think LLMs are impressive, still.