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The only "bubble" with AI is that the initial build out is cyclical, and many of the high flying chip stocks with no software arms (ala Nvidia's CUDA) will come

The only "bubble" with AI is that the initial build out is cyclical, and many of the high flying chip stocks with no software arms (ala Nvidia's CUDA) will come back to Earth. I think anyone that thinks AI is going away or won't have massive impact (though maybe not in the doomsday scenario) are in complete denial.

aogaili 3mo ago
I share the same perspective.
hungryhobbit 3mo ago
RTFA; it's not about AI's massive impact or lack thereof ... it's about these businesses not having a viable business model that will sustain them (beyond the next couple years).
- cogman10 3mo ago
  I think Zitron's problem is he's equating AI to OpenAI and Anthropic. I'd agree with him that both those businesses are in a dangerous position given how fast they've burnt through cash. However, that's not the entirety of the industry and there are a lot smaller labs doing more for a lot less capital. The business model does appear to be viable for these labs. But that viability comes because they aren't wasting a bunch of R&D money developing worthless products like AI video production.
- aogaili 3mo ago
  I admit, I didn't read the whole article; I read a few paragraphs and extrapolated the mindset from which the author operates. Regarding your comment about the business model—the people in Silicon Valley are not stupid. They know the playbook; we've seen it with social networks. The issue isn't the business model itself; it's that these companies need to dominate the market, and the big players are competing for that on a global scale. It's the exact same playbook that played out in financial systems and social networks, and now it's happening with AI. Once these technologies are deeply integrated into enterprises and the global economy, these players will dominate the market for decades to come. I can assure you, the people running those companies are smarter than you, me, and the author of this article."
- partiallypro 3mo ago
  I did. So, I'm confused how does that negate my comment exactly? Your second complete sentence totally is in conflict with your first btw.
cogman10 3mo ago
What I suspect isn't that AI goes somewhere, but I do think that the cutting edge companies like Anthropic and OpenAI are in a very precarious position. They don't have very much of a moat and the competition has been catching up quick while spending a lot less doing so. IMO, the main thing keeping them alive right now is name recognition. If I were to make a prediction, it's that ultimately these cheaper models are going end up eating their lunch. I don't think they'll make back the money they've invested and once that reality hits investors, those two companies are sunk. That, however, is not the end of AI. Nor will it be the end of Nvidia/micron/etc. It will more just be a localized bubble pop that doesn't eliminate the product from the market.
- aogaili 3mo ago
  It is not just about cheaper models; it is about integration with the economy. These models are building deep integrations into companies and the entire economy. Once that stabilizes, it will be like the electricity grid—pumping tokens to fuel decision-making across the entire global society. Good luck unplugging from that. Furthermore, there is a massive geopolitical aspect to it: those who are already on the Western financial and technical stack will get integrated even deeper now.
  - cogman10 3mo ago
    > These models are building deep integrations into companies and the entire economy. Once that stabilizes, it will be like the electricity grid—pumping tokens to fuel decision-making across the entire global society. Good luck unplugging from that. Much like the electric grid, what we are seeing is a convergence on standard APIs. For example, most of these cheaper models are hosted using APIs compatible with OpenAI. It's not a matter of rewiring your electric plug to work with a different socket standard, instead it's just the process of plugging it into a new socket. > Furthermore, there is a massive geopolitical aspect to it: those who are already on the Western financial and technical stack will get integrated even deeper now. Certainly the Chinese models appear to be some of the best when it comes to competition, but they aren't the only ones. There are European models and other US based models which all run for cheaper.

aogaili 3mo ago

I share the same perspective.

hungryhobbit 3mo ago

RTFA; it's not about AI's massive impact or lack thereof ... it's about these businesses not having a viable business model that will sustain them (beyond the next couple years).

cogman10 3mo ago
I think Zitron's problem is he's equating AI to OpenAI and Anthropic. I'd agree with him that both those businesses are in a dangerous position given how fast they've burnt through cash. However, that's not the entirety of the industry and there are a lot smaller labs doing more for a lot less capital. The business model does appear to be viable for these labs. But that viability comes because they aren't wasting a bunch of R&D money developing worthless products like AI video production.
aogaili 3mo ago
I admit, I didn't read the whole article; I read a few paragraphs and extrapolated the mindset from which the author operates. Regarding your comment about the business model—the people in Silicon Valley are not stupid. They know the playbook; we've seen it with social networks. The issue isn't the business model itself; it's that these companies need to dominate the market, and the big players are competing for that on a global scale. It's the exact same playbook that played out in financial systems and social networks, and now it's happening with AI. Once these technologies are deeply integrated into enterprises and the global economy, these players will dominate the market for decades to come. I can assure you, the people running those companies are smarter than you, me, and the author of this article."
partiallypro 3mo ago
I did. So, I'm confused how does that negate my comment exactly? Your second complete sentence totally is in conflict with your first btw.

cogman10 3mo ago

What I suspect isn't that AI goes somewhere, but I do think that the cutting edge companies like Anthropic and OpenAI are in a very precarious position. They don't have very much of a moat and the competition has been catching up quick while spending a lot less doing so. IMO, the main thing keeping them alive right now is name recognition. If I were to make a prediction, it's that ultimately these cheaper models are going end up eating their lunch. I don't think they'll make back the money they've invested and once that reality hits investors, those two companies are sunk. That, however, is not the end of AI. Nor will it be the end of Nvidia/micron/etc. It will more just be a localized bubble pop that doesn't eliminate the product from the market.

aogaili 3mo ago
It is not just about cheaper models; it is about integration with the economy. These models are building deep integrations into companies and the entire economy. Once that stabilizes, it will be like the electricity grid—pumping tokens to fuel decision-making across the entire global society. Good luck unplugging from that. Furthermore, there is a massive geopolitical aspect to it: those who are already on the Western financial and technical stack will get integrated even deeper now.
- cogman10 3mo ago
  > These models are building deep integrations into companies and the entire economy. Once that stabilizes, it will be like the electricity grid—pumping tokens to fuel decision-making across the entire global society. Good luck unplugging from that. Much like the electric grid, what we are seeing is a convergence on standard APIs. For example, most of these cheaper models are hosted using APIs compatible with OpenAI. It's not a matter of rewiring your electric plug to work with a different socket standard, instead it's just the process of plugging it into a new socket. > Furthermore, there is a massive geopolitical aspect to it: those who are already on the Western financial and technical stack will get integrated even deeper now. Certainly the Chinese models appear to be some of the best when it comes to competition, but they aren't the only ones. There are European models and other US based models which all run for cheaper.