Re:Cory Doctorow: What Kind of Bubble Is AI?
by acdha on Tuesday December 19, 2023 @07:38PM
(#38704035)
E-commerce isn’t on that list for the same reason AI isn’t: it had real value. Cryptocurrency had a ton of money poured into it but never found something it did better than the alternatives - PayPal didn’t even feel the need to pretend to treat customers better! – and magical thinking about security and customer service not mattering didn’t help.
Pets.com is harder to understand if you weren’t there: it looks like a not bad idea, which it was, but the business was setup as if it was a lucrative high-margin industry. There was no way it could succeed losing money on every sale, and they locked those costs in so well there was no real way to lose less money unless you could figure out how to make shipping far cheaper (most of what people buy at pet stores is heavy food). The hype was off the charts, though, and people poured money into the stock anyway. I worked with a major competitor and was on a few calls with their ostensible technical staff, and it was palpable how they had hired anyone who could spell HTML and everyone was killing time waiting for their options to vest rather than building anything real.
AI is like the early web in that regard: there are plenty of outright fraudulent companies and a bunch of doomed ones who just don’t realize it yet, but there is also a real capability that wiser people will use. As with the early web, I’m expecting a lot of startups to get a ton of attention compared to boring old companies actually doing useful things.
Pets.com is harder to understand if you weren’t there: it looks like a not bad idea, which it was, but the business was setup as if it was a lucrative high-margin industry. There was no way it could succeed losing money on every sale, and they locked those costs in so well there was no real way to lose less money unless you could figure out how to make shipping far cheaper (most of what people buy at pet stores is heavy food). The hype was off the charts, though, and people poured money into the stock anyway. I worked with a major competitor and was on a few calls with their ostensible technical staff, and it was palpable how they had hired anyone who could spell HTML and everyone was killing time waiting for their options to vest rather than building anything real.
AI is like the early web in that regard: there are plenty of outright fraudulent companies and a bunch of doomed ones who just don’t realize it yet, but there is also a real capability that wiser people will use. As with the early web, I’m expecting a lot of startups to get a ton of attention compared to boring old companies actually doing useful things.