When the AI bubble pops, what will remain? Cheap GPUs at firesale prices, skilled applied statisticians looking for work, and open source models that already do impressive things, but will grow far more impressive after being optimized:
When the AI bubble pops, what will remain? Cheap GPUs at firesale prices, skilled applied statisticians looking for work, and open source models that already do impressive things, but will grow far more impressive after being optimized:
What does it take to pop this bubble? So many people are calling it a bubble but what actually makes it pop?
As stupid as it is: Faith is what keeps bubbles afloat. Faith can go a long way towards forcing reality to what you want it to be, and if you have the wealth, you can play nearly endless money-games to make it seem like you’re ahead when you’re actually losing your shorts.
The reason there is so much faith is because this is a make it or break it moment for late stage capitalism. The businesses (including non-AI businesses) viscerally need it to work so they can get rid of human workers. If they can’t make humans slaves, they will make digital slaves. This may be a last gasp for the old order if it fails because so many entrenched companies from automobile makers like GM and Ford to airframe makers like Boeing to general electronics like General Electric have finances that are literally upside down because they have been using stock buybacks to fake growth for the better part of two decades now absolutely need it to happen to stay afloat.
This quote by Upton Sinclair is usually used to describe lower level employees who don’t understand how unionization could be good for them, but it applies here as well. The faith persists because this is their “salaries” that depend on this working so the bottom doesn’t fall out from under them. They have to believe it will work and as such will keep dumping money into it as long as humanly possible.
AI is like Theranos but bigger and affecting numerous industries who are all betting the future of their companies on this all working out. For their livelihoods and their plan to continue ignoring all the little people in the world, there is no losing state they can or will accept until they are on the edge and about to leap from the top of their buildings to avoid the consequences.
Once the faith breaks, it will be like a dam breaking and flooding out too fast to escape.
Venture capital drying up.
Here’s the thing… No LLM provider’s business is making a profit. None of them. Not OpenAI. Not Anthropic. Not even Google (they’re profitable in other areas, obviously). OpenAI optimistically believes it might start being profitable in 2029.
What’s keeping them afloat? Venture capital. And what happens when those investors decide to stop throwing good money after bad?
BOOM.
Which is absolutely buck wild when you consider they’ve already signed contacts to spend another trillion dollars over the next five years.
How the fuck is a company that has $5 billion in revenue today going to grow that revenue by at minimum $995 billion by 2029? There’s just no fucking way, man…
On top of that, there’s so much AI slop all over the internet now that the training for their models is going to get worse, not better.
To an extent, I think that’s already happening. ChatGPT5 released with a huge amount of hype, but when users started playing with it, it was incredibly underwhelming — and flat-out worse than 4 in many cases… all while burning though even more tokens than ever. Definitely seems like that capabilities of this technology have hit a plateau that won’t be solved with more training.
I really have no idea how anyone is supposed to take this world seriously anymore.
I have been wondering the same thing. Since we have a bubble called TSLA that still hasn’t popped, that I know of. And “AI bubble” seems a much more diffuse and hard to define concept, in comparison.
🎼You can’t stop, techno pop 🎷🎹
This is a great question. Eventually the companies must run out of gullible investors, right?