The funniest part is that the thing that could actually make AI useful at scale might be what wrecks the investment thesis: cheap, local, open weight models. Wall Street funded a trillion dollar server farm to discover that sometimes the answer is a smaller model running on your laptop. The technology might win while the investors lose. Nevertheless, companies such as Google, Amazon, and Microsoft – as well as Nvidia and AMD – are a very long way from simply going under.
Google, Amazon and Microsoft will be fine.
Oracle, though. It’s possible they’ll actually die. And wouldn’t that be tragic.
I think NVIDIA has a higher chance of survival because they’re the ones actually producing something tangible (GPUs) that is still needed even if openweight models prevail.
they’re doing far more than just that, the way jensen has been able to structure all almost all of these deals essentially offloading all the risk. they sell essentially lease the hardware, ontop of huge chunk of premium up front, ontop of paying for compute itself, ontop of offloading any actual buildout cost onto any greedy schmuck willimg to pay the tab. nvda will be completely fine (though stock price will obviously correct as bubble-levels income drops)
shovels, gold, etc
At the same time, they are doing extreme price gouging with little improvement between generations since h200. Huawei actually has better $/performance ratio and accelerating faster. Others have better inference solution, with AMD doing better on $/training performance too. The fact that Nvidia is the one propping up the AI bubble, sinking their cashflow into dead ends, makes it a bad stock too. Peak NVidia BS got exposed in an Australian IPO this week. It was too absurd to get anyone to buy and got cancelled. Heavily backed by NVidia.
Yeah, they’ll be fine assuming there isn’t an Enron level legal motion. They are sort of not on the hook for anything financially. I’m not sure how legal it all is though. I’m pretty sure it isn’t, but even if it isn’t it’s still a question if they’ll be held accountable.
they wont be fine, they will suffer heavy lossess but will survive, likely just by laying off hordes tech people, and even downsizing thier warehouses. i think nvidia will get off mostly less harmed though, since they sold thier products years ahead. hopefully it takes down skydance with it.
I would comment about Oracle, but I don’t want legal bills.
Fuck 'em with a rusty rake
Oracle, though. It’s possible they’ll actually die. And wouldn’t that be tragic.
Oh the humanity
And whoever scavenges their corpse will milk their
customersprisoners even harder!I doubt it. Government would step in and bail them out.
yep, with our money.
This isn’t going to happen. They’re not the banks, and they’re pretty universally hated in the country.
When the AI bubble pops it’s going to take down the banks.
There is a lot of private credit dollars loaned to data centers and the banks are heavily invested in private credit.
It’s a house of cards priced for perfection just waiting for one of the big 5 to have a slightly off quarter.
But their owners didn’t kiss the ring for nothing.
Too big to fail? I think I heard that once.
I just can’t see things continuing like this, there has to be a plateau reached at some point. Higher or lower. Exponential growth isn’t sustainable in anything.
Nevertheless, companies such as Google, Amazon, and Microsoft – as well as Nvidia and AMD – are a very long way from simply going under.
Not really, once you look at the startups like OpenAI they have enormous expenses that depend on constant debt and investment funding, and the cost and risk of sustaining that debt can easily reach a point where they struggle to get new investors to foot the bill.
The whole market is based on a belief in a huge pot of gold some time in the future, and it is driven by unfathomable amounts of debt to keep the machinery running towards that goal. Once the belief in the goal getting reached gets broken, the change in momentum breaks the whole system.
That includes the big players, huge amounts of their balance sheets, including claims of revenue, are circular trades between themselves. Even google claims revenue from asset price growth in their AI subsidiaries.
Once it shifts from investment to repaying bad debts the numbers will look completely different for all the big companies involved. We’re talking potentially bail outs basically across the board
The term bailout needs to stop being used and normalized. This is nothing like the housing market and audio industry crash.
These rich fucks don’t need socialism for the rich yet again, they need to eat their losses.
Why do you think they are starving consumer market for computer parts?
I think we are talking about the same thing. AI companies spend billions to monopolize compute, causing consumer hardware prices to go up.
There is this insane amount of investment in AI built around LLMs that threatens the entire world. People worry about the bubble bursting but think AI is the ant’s pants without considering that the LLM is a dead end. None of the AI companies are going to achieve Artificial Intelligence. That’s why they will actually implode, their systems aren’t intelligent.
I mean, they are artificial intelligence by pretty much any normal definition of that term. So is Battle Chess from the 1980s. So is bank fraud detection. So is Conway’s Game of Life in its most basic definition.
Will they develop “super intelligence”, etc? No
I think that’s the wrong conclusion. I agree they won’t achieve actual intelligence, but I see no reason why that would make them implode. Current tech is still going to be something companies pay a lot for.
I fear that yes they are not good enough to actually replace labor, but good enough to cause unprecedented chaos. Under capitalism, at least.
well, they are being trained my the management, and as we all know these types wan’t 150% of the benefit with 25% of the work.
It wont be a real AI, but itll be just enough to kill off a lot of the software industry.
what software industry? React developer industry?
I’m genuinely curious what “real AI” is to you?
Real ai to me would mean true agency. And an entity which has its own goals and relationship to its world.
Yeah. I wonder if it might be difficult to identify something that reaches that point? I suppose genuine creativity might be an indication of intelligence? Or a desire to reprogram itself? I dunno, I’ve recently read Peter Watts blindsight and it kind of made me reconsider the relationship between consciousness and intelligence.
If someone truly believes LLMs are sentient, then they must under no circumstances prompt them even once; that would be murder.
Please explain without sounding crazy.
An LLM is a stateless stochastic function ran over your prompt (plus whatever system prompt) as input.
If you genuinely believe that the LLM is conscious, that means every time the function stops running (i.e. stops producing output tokens), the consciousness ends.
This is far closer to death than to, say, sleep, because prompting again doesn’t “wake” the LLM, it just runs the function again, from the top; as if a digital twin was given a transcript of the previous conversation and asked to take it from here.
(Obviously, “murder” was somewhat tongue-in-cheek, and this doesn’t even remotely meet any legal definition of murder. I was mostly poking fun at people who think LLMs are alive, without thinking through the implications. Personally, I think the idea that LLMs are alive/conscious/sentient is very often linked to not understanding that LLMs are not, in fact, a constantly-running ghost in the shell, thinking about and remembering things in the background.)
I think you’re conflating consciousness and intelligence. I think you could theoretically have an artificial general intelligence on the same level of intelligence as a human, or even beyond, but with zero consciousness. We know that intelligence does not follow consciousness (unless you believe a fish or a cow is not conscious). Why should consciousness follow intelligence?
A true Turing Machine, obviously
One that when given input will give the correct output, every time, without fault or stalling, in a timeframe that is quick
A Turing machine has nothing to do with AI. Pretty much any computer today can emulate one, the only thing lacking is infinite memory.
Isn’t there a difference between Turing Complete and Turing Machine?
I thought many machine can be Turing Complete (when given infinite resources, can give any required output), but a Turing Machine is one that is complete?
I’m so burnt out and jaded on AI that I don’t think I’ll ever use it for any reason ever. I just wish we could put the cat back in the bag. I know that will never happen.
“more clear that the real future of AI is small language and open-weight models running on local desktop computers” So where are we with those smaller models? I haven’t been following them. Are they any good?
Qwen3.8-flash-next is making waves since its near frontier or frontier (according to some i havent used it) that can be run on an ancient 8GB video card (12GB or more is recommended. 16GB is best.) with around 32GB of RAM using Strata.
It’s a mixture of experts MoE model, so while it’s around 66GB (depending on which quantization you decide to run) you’re only really using about 6B parameters per token processed, meaning the VRAM requirements are a lot lower.
I personally don’t see the value proposition in paying $4/1M tokens when i can generate around 30tok/s on 500W of power. I pay ¢13/kWh so to generate 1M output tokens takes me 9.25 hours and costs $0.60.
I’m also running an ancient video card and have a new one in the mail. If i got 200 tok/s even at higher power use i’m still a fraction of the cost of paying for API access and I want that GPU for other things regardless.
I feel lile medium and large businesses have a strong incentive to rent or buy inference using open weight models for a fraction the cost of paying OpenAI or Anthropic. Especially if you can pre load them with everything about your org to make them better suited for internal use.
The vast majority of uses can use a open weight locally run model. I think you would only want to pay for frontier models for really complex tasks with lots of steps, and even then there are usually ways to be smart about how you task agents with work to get better output and use less money.
The other issue is we are finding out that what you do in the AI cloud is logged. It can be subpoenaed, can be sent to police if it fails a safety check, or even stolen if the mathematicians fears are real. It is certainly being used to further train models…
Nice. I just wondered how they were coming along.
Right now, I have to manage which model does what. So I don’t. It’s the companies dime after all, and they clearly value speed over efficiency. But the model I directly talk to doesn’t need to be super high end. It could be well versed in which model is best for what task and farm put all of the work to the right model for the job. Seems like that alone could reduce cost a ton. But then start adding in cheaper local models and the price could fall a ton.
It would also be more accurate. Like if I had a small local model for interacting with a set of apis. It wouldn’t make the mistake of not considering that the api paginates results. The general model makes this mistake over and over.
So I agree this is the direction of the future. Just trying to figure out when we will get there.
This is where things seem to be headed. Local models can be pretrained and crammed full of your work’s information, and opencode and other harnesses can pick the right model for the task ahead of time. I could be wrong but i’ve been predicting a drop in frontier model credit usage especially if they hike token prices again. People will only use it if they have to especially if you can find a way to task a local model with a lot of the grunt work.
AI could be used to save our planet from catastrophic climate change, to problem solve ways to improve things, to do hard labor so that people don’t have to… but nah let’s use it to make assholes with too much money get more money! That’s fantastic
its doing exactly opposite of that, i dont think it will save anything, its already catastrophic enough to have all these polluting datacenters in every country.
We already got solutions. What’s missing is the courage and incentives to actually adopt them by political leaders and the larger public. If AI would replace our politicians maybe it could help, otherwise it’s just the latest proof that there’s plenty of money around to transform the economy into whatever we want it to be. I guess we prefer chat bots over carbon neutral.
They didn’t listen to the scientists.
Somehow I think AI would go from “Super Intelligence” to “that libtard tree hugging computer made of parts from commie Chy-na” as soon as it told them to do something legit that would inconvenience them or disagree with their narrative.
Please let it happen. Please! Hopefully datacentres gets demolished also or turned into puppy orphanages.
Some datacenters could be repurposed as traditional datacenters focused on networking and cloud storage, infrastructure.
Look, none of use should be cheering for a full on pop of the buble. It will hurt all industries. And we know the oligarchy has insulated themselves in ways that will ensure they feel very little pain. It will be all the workers who will feel it. As for data centers, I don’t think we need the bubble to burst to fight that. Lots of jurisdictions are already banning them. That is what we should be cheering for.
While I am not cheering for the bubble to pop, the longer it goes on the worse it will be so the sooner it happens the better.
I dunno. The market affect is mostly perception. I mean why should unrelated stocks suffer when AI companies fall, yet they do. So I don’t think the length of time actually impacts the severity of the crash. But I’m no economist. That’s more of a “I don’t see why”, rather than a “no it won’t”
The main issue is that increasingly AI companies are making up a big portion of index funds which are required by law to be purchased by mutual fund managers and thus part of retirement accounts, so value will be evaporated out of retirees accounts. The larger the bubble the more the impact.
Also note that the only reason the US is not in recession right now is due to AI market “growth” so the GDP correction that follows will cause companies who have invested in the technology (not just AI companies, but most of the Fortune 500) to contract. The fallout will be unpredictable, but the most likely scenario is layoffs. Further, the Fed will be reluctant to cut interest rates, because inflation is extremely high due to tariffs, so the one lever the government has to stave off the recession has been compromised by the current administration. So the recession will be deeper and worse with a longer recovery than it would otherwise have.So why care? Because grandma’s retirement will disappear, a bunch of people will be laid off and the levers available to mitigate the impact have already been pulled. Oh and inflation will get worse when our government bails out AI tech bros to the tune of $1T.
So I agree on the impact, and on the why care. But I’m not seeing why waiting long makes it worse. Based on what you said, waiting longer could help if it can hold out until this tariff war is over (one way or the other). Then it might be possible to lower interest rates to soften the impact. If it can hold out for a whole new administration even, that could help a lot. Though that is also what would likely trigger it, as a new administration will likely restore regulations that have been relaxed, increasing costs to business. But I would rather pay that price at that time with that administration than this one.
The bubble is growing over time. It will have a more severe impact in two years than it would if it happened tomorrow.
That makes logical sense, but I am looking for a more solid explanation. Again, I am not saying it isn’t, I am asking how could I say that to someone and then back it up with a solid why.
There are lot of problems in this world that make artificial intelligence dooming humanity seems like tuesday in comparison , and those problems got similar treatment from all of humanity: protest, hearing, discussions and a bit of outlier that spark things a bit and after that moved on to another problem without solution a.k.a status quo till everything collapse.
I mean why a.i dooming entire humanity begets different treatment?
My money’s on plague.
I put my stake to ongoing environment collapse like sane person here.
The fact that more people don’t know just how far past the point of no return we are is still shocking sometimes.
Yes, and many of those who know think countermeasures suddenly became futile. Rather, the time when mitigation is easiest and most effective is always exactly now. So, whatever anti-collapse action (or inaction) you all put off or planned for “later”, start it today. You will never again have a chance to have this impact.
Way ahead of you.
we just had that.
Hope the fuckers all burn.
1 newspaper
Yeah, Bloomberg though. Not saying that they are great, but it’s among those that Wall Street bros read to decide what to buy and sell
investing in the wrong future
I’m assuming they mean “future” in the same way the stock market (ab)uses the word, because AI had its lower ribs removed on day one. There’s no future there.
The lobster is out, read the room. You’re seeing articles of people stating local models are the future in tandem with hardware companies stating prices will go up for hardware and shortages will remain. This is a classic double tap from behind. It’s done. There were some good applications to it, which will continue. But overall it’s a toddler dropping their ice cream cone on the ground.
We’ve basically got to wait for Anthropic and OpenAI to actually IPO before any of this can get started properly. Once there’s a public expectation for profit from the two biggest AI labs, then the market will start acting against them. We can hope, at least.
Once there’s a public expectation for profit from the two biggest AI labs
I don’t think that it’s necessarily the order things will go.
Anthropic and OpenAI have bills to pay, including obligations to pay a ton of money to partners/vendors in the coming years. They need cash to do that. And the cash can come from 3 main places: revenue from customers, loans from lenders (usually in the form of issuing bonds), and issuing new stock/equity to raise funds.
The IPOs are basically their last chance to raise funds by issuing new equity. Even if each of them raise $100 billion, that’s probably not enough to hit self sustaining profitability. As lenders start to get more skeptical, in a macroeconomic environment with high interest rates and high energy prices, they start to run into a very real possibility that they hit illiquidity issues, even if their core business model actually works by then (and I don’t think it will). There’s just not enough runway for them, even in the most optimistic long term projections.
AI is the future. It is just that companies are rushing headlong into it, not properly planning nor preparing for it.
Sure, maybe one of them would be the next Google - but the vast majority are dinosaurs in a world to be filled with smoke and rats.
Yes any time now. Just like in 2022, 2023, 2024, 2025…
Nvidia is not even overpriced. If anything, it’s underpriced because it’s a 5 trillion dollar company and the market doesn’t believe it will be able to keep growing.
I dont believe this technology will become anything actually smart. It’s still just text prediction. But it’s good enough for a lot of usecases.
It isn’t profitable at current pricing, and it will have lower adoption at higher pricing.
The technology isn’t going anywhere, when the bubble pops and hardware prices come down, local open weight models will be sufficient and the hardware to run them will be cheaper than cloud models.
In the short term, however, it’ll be a shit show.
It isn’t profitable at current pricing, and it will have lower adoption at higher pricing.
The subscriptions that are there to expand customer base, sure.
But that significant part of the business where large corporations pay API prices? These are designed to cover the costs.
The reasons why the companies still running losses with subscriptions is that the market devide is far from settled.
I really wish you guys who believe this would be able to go forward in time and see what happened. :)
Well… We all go forward in time. That’s kinda how time works (generally).
Unfortunately we can’t go there and back. :)
Do you have a reason to believe what I said is unbelievable?
It’s their own numbers…
Personally, in this paragraph:
The technology isn’t going anywhere, when the bubble pops and hardware prices come down, local open weight models will be sufficient and the hardware to run them will be cheaper than cloud models.
I honestly believe that the AI hype is just the justification for the price hikes on hardware, the point is removing access to capable hardware for all of us so that they can have most, if not all, control over the population.
I certainly hope you’re right, but all signs say otherwise, in my opinion anyway.
Get off YouTube! Your thinking has been poisened with conspiracy mindset.
That may very well be the case. Now, is it really a conspiracy when everything points to it, or is it a justified suspicion?
Conspiracies exist. Many are well documented, or at least documented enough to call out specific people for specific behavior.
A conspiracy mindset ignores those, and instead suspects conspiracy everywhere else, and usually without substantial evidence. Easy instances are detectable when the sentence goes they do something to harm us in a vaguely related way.
The latter is all over YouTube, and what influencers make money with. The former is sometimes reposted on YouTube after some journalists publish it in a serious media outlet.
The problem is that those “signs” don’t really point to it?
Like, new technology with bunch of hype appears, demand goes up, the hardware industry raises prices, prices probably won’t go down to how they were before because the industry is pretty cartel-like.
That happens is every poorly-regulated market.
You don’t need a secret cabal of people making computer parts expensive on purpose to make people dumb to have that make sense, and requires extra justification.
Maybe, but im convinced it will work just like any other technology that has arrived before it.
Currently we are in the hype stage where so called experts are warning the technology can kill humanity and other silly things.
But this will pass. The technology will continue to be very useful to both companies and individuals and because of this, pricing will adapt. This means less price for the consumers as number of users and competition goes up.
We will have a society where Ai is used to take our orders, find our information, do a lot of office job tasks. It will become just as common everywhere as screens and phones.
And people say it’s not going to be profitable? That’s extreamly improbable. Every technology that is used by everyone is highly profitable, it’s just a matter of which companies will win the market and which won’t.
There won’t be any bubble popping because it’s not a bubble. It’s a new technology, like phones and laptops once were too. I had one of the first smart phones actually and I watched that market explode over the coming decade, with every human buying a smart phone. That market is now stagnated, more of less. But Ai has only just begun.
As how my local AI would put it, “I would like to gently push back”:
There is an AI bubble. Just as the Dotcom Bubble, it won’t kill the technology nor slow advancement - it simply selects against companies that are not fiscally responsible or intelligent about their agenda.
The ones who don’t believe this can?
Is that why someone on Thursday just spent $21 million on 100,000 puts at $180 of NVDA?
That’s cool. Link to it please. Some prediction market?
That is actually scary. What do they know? Thank you!
Im going to be sticking to day trading this week and see what happens.
There is no AI bubble, just like there is no housing bubble. It’s here to stay. This is the sad truth.
An economic bubble doesn’t require that the assets suddenly disappear upon the bubble popping.
The 2008 financial crisis was caused in part by the popping of a real estate bubble in the US. Those properties didn’t magically evaporate after the bubble popped, though many families couldn’t afford to keep their homes.
In the same manner, nobody is really suggesting that LLMs will suddenly disappear after the AI bubble pops, only that they will probably be proven to be significantly less profitable and get scaled back.
In the same manner, nobody is really suggesting that LLMs will suddenly disappear after the AI bubble pops
There is a significant portion of AI haters who think exactly that, for some reason.
I mean, it’s likely that a good chunk of these hyperscale data centers and some of these big corporate LLMs will run out of cash and close shop. We’ll probably see a big pivot to much more efficient models that are local and/or purpose-built, not unlike what the Chinese are already doing.
they will literally restore slavery before they let a strategic corporation fail.
Yeah dude, there was never a housing bubble and it never burst. Sure thing.
https://en.wikipedia.org/wiki/Subprime_mortgage_crisis
Some of us here are old enough to remember living through it.
How’s those houses priced for ya nowadays bud?
My friend, I have never been in the market to buy a house so I literally could not tell you.
My friend let me tell ya. There still unaffordable. But who knows, I heard on the internet that the bubble might pop someday.
2008 was nearly a decade ago. People will always need shelter. Is it really that surprising that the market recovered over the years?
But at what cost? Who owns those properties now? Private investment firms.
