The gambling around which companies, products, etc. is just the imperfect information and greed directing investment.
It's not malinvestment for the winners.
Humans living forever is inevitable. Galactic colonization, inevitable. Over a long-enough time scale.
AI is inevitable on the same time scale, sure. But can it actually survive as a sustainable business given what is needed to keep it relevant—will people pay what it costs to support said business—not clear. Or, at least in the next five years.
The second generation AI companies will be built on different assumptions and will likely be slower-growing, and that’s when you’ll see it truly become ubiquitous. That could be a decade though.
“IT’S THE SAME THING”
I doubt that. I think we just fizzle out. The survival of the fittest instincts that made us a successful species is destroying us as we are getting more capable. Our 'leaders' are getting ever more unhinged.
And without faster than light travel there just isn't much point in galactic colonisation. If generations have to live and die in a tin can to get to some remote star, why not just live in that tin can in the first place.
is anyone else weirded out by folks chanting this like a mantra? imagine saying this for any other emergent tech. "NFTs are inevitable", "crypto is inevitable", "excel is inevitable", etc.
inevitability != usefulness/profitability
Excel was and is inevitable.
AI is going to let me do your job and barely lift a finger. Therefore, inevitable.
Thermodynamically favored outcomes.
If this is your sentiment, I'm going to run circles around you. I probably already am.
This is literally the most exciting technology of my lifetime.
I've been a professional software engineer for 15 years. I've written more lines of code in the last three days than my entire career pre-AI.
If you're not excited, I don't know how else to break it to you. Everything you've ever built one person with AI will eventually build for themselves. Quickly. Probably better.
I don't see how y'all don't see this and obsess over it.
I want to bend the universe. Maybe that's the difference.
Living the same way we did in the 2010s until retirement seems boring as hell. That was the depressing reality. This is way more fun.
I learned programming to do this stuff. Programming was the necessary evil. Now it's gone and I'm 1000x faster.
I want to live a life that makes the people I love happy, makes me feel healthy, and hopefully learn some cool things and skills along the way.
Bending the universe sounds predatory, like exerting what you want onto other people without thinking about what they want
I'm starting to hate hacker news. You're all bleak and depressed angry people.
What about the labor you steal from the milkmen, butter churners, seamstresses, and elevator operators? How evil of you.
And yeah, I did it. Not you. That money would be in your bank account if you did it. But you didn't.
I. Personally. Did. It.
It's funny how I'm working around the clock using AI. Because you seem to say this isn't work. And yet I've never been so busy. So can you tell me what's going on here?
How did I manage to build so many useful things for people?
I've had over 40 million downloads of my app recently. Maybe you should think about how people value things instead of your own value system. Your priors might be flawed.
A literal alien technology landed in our laps and you're calling me crazy.
Why are you directing your hate at me instead of trying to figure out how to use the new technology?
You're going to wake up one day and suddenly the entire world will have moved on from your comfort zone.
I read a bit your post history, you're worse than youtube ad clickbait - you never say what you do, just flowery and bombastic language about how great whatever your vague thing is. (Thank you to sibling poster who spilled the beans, see its not too hard, just say " i made a photoshop clone" its less words than what you typed. )
And boss, I was born out of my comfort zone and never really found one, so you don't scare me one drop.
> I personally make these things. I'm not ashamed in the least to say it, because it's true.
Weird. At the very least I thought you had thousands of contributors. I guess it's a good thing you're the one getting paid since apparently you're the only one who matters. Wild that you're so invested in AI when apparently it doesn't apparently do any of the work either.
Maybe you should stop jerking off on HN and get to fixing the 2k+ issues on the photoshop clone you "one-shotted" a month ago. Maybe update the prompt to say "pretty please don't make any mistakes."
The way your half-assed broken slop is taking attention away from actual, functional open source projects is a crime.
> Weird. At the very least I thought you had thousands of contributors.
We do, and they're awesome.
The paid app I built prior to the Craft apps got to millions in revenue off of my work. Although an anti-AI person like you would say that wasn't my work and that it the revenue just created itself.
> I guess it's a good thing you're the one getting paid since apparently you're the only one who matters.
We're going to build open source infrastructure and weights, and we'll need to earn money to subsidize the build out.
> Wild that you're so invested in AI when apparently it doesn't apparently do any of the work either.
I'm working harder than I've ever worked in my life. You anti-AI people don't understand this because you don't try.
> The way your half-assed broken slop is taking attention away from actual, functional open source projects is a crime.
We are open source, and we're working on adapting open source to the software factory era.
Software factories are the future, and engineers steer the factories.
I am criticizing you, and I'm far from the only person doing so.
If your ego can't allow you to see a difference between the two - and your comments suggest it can't - that isn't my problem.
>We do, and they're awesome.
Cool. So you admit you didn't personally, entirely, as a "solo engineer" do it all. That at least is something.
>Although an anti-AI person like you would say that wasn't my work and that it the revenue just created itself.
OK so we're just arguing with strawmen now I guess. Fair enough, it's my fault for engaging. I should know what I'm getting into.
>We're going to build open source infrastructure and weights, and we'll need to earn money to subsidize the build out.
But open source doesn't need that. Gimp doesn't need millions of dollars in investment to subsidize infrastructure. Neither does Krita.
You do because you've created a "software factory" that requires the expense of burning tokens, which of course most open source projects can't afford.
It doesn't seem like you're building open source, it seems like you're building a moat.
>I'm working harder than I've ever worked in my life. You anti-AI people don't understand this because you don't try.
Brother everything you do - or rather everything your AI does and that you take credit for - is built on our work. The work that you mock, deride, and gleefully try to undermine while bragging about the money you make doing so.
At some point the hype is going to die and people are going to judge your products on their actual stability functionality. So far everyone who reviews them at the very least finds them fundamentally broken, and there is no professional adoption of any significance, at least not outside of the AI sphere.
The arrogance is astounding coming from someone whose photoshop clone can't even open a photoshop file.
AI is bigger than the internet, than computers, than literally any innovation or invention that has ever come before, combined.
Today you see AI slop and vibe coding.
Tomorrow, all of humanity will be affected, forever.
Their monopolies got broken and the profits disappear in a commodity market.
If nvidia or tsmc got split up i doubt its stock is going to stay at as a high a p/e.
AI can be in a bubble right now and the bubble can explode and yet all what GP said can still be true
I think civilization will have time to react and adapt, panic leads to haphazard action, we need deliberate consistent action.
How do you think we need honest deliberate action if 95% of people believe AI is a scam and a bubble and mostly just hype marketing? Just take HN's comments for example.
This..is not being honest about AI's capabilities. It's simply not specific enough to be called honest or dishonest. This is simply creating panic.
Imagine a world without those. Oh, wait: tomorrow people won’t know how to use language, will they? And they won’t have water to farm with, so there you go.
> And today's AI, for as revolutionary as it may be, is taking just as long to mature as anything in the past.
I suspect this opinion may come across as naive for the myriad software engineers whose job has become pressing the enter key. Your point about timing is based on solid principles, but I don't think your comment contains a satisfactory argument that the timing is incorrect.
In every bubble some say this. And it could be the exact same herd behavior (mentality) that creates a bubble.
If no one is willing to pay increasingly high costs of training frontier models, we'll still have the models that we have now that can be fine tuned for incremental improvements. Still tons of utility in that, but little investor upside.
From a recent METR report, benchmarks point towards an acceleration, LLMs are getting better at a faster rate. There's no sign that we are about to reach the top of the S curve.
> increasingly high costs of training frontier models
Somewhat surprisingly the gains do not seems to come from more compute, we have on the METR report:
> We are confident that the acceleration was not due to an acceleration in the scaling of training compute.
Link to said report: https://metr.org/blog/2026-11-05-anthropic-ai-rd-acceleratio...
On an internal benchmark with internal models, if you look at the public benchmark with public models there is no acceleration. That report also has a big graph labeled "fake data".
I think this could form part of an argument that acceleration is slowing. It's only because we are not making as much improvement out of hardware gains that we're having to find the improvements in more complex architecture and more tricky to create training data.
The fact that the gains are not coming from the traditional place gains come from in technology might be a sign that a high percentage of the low hanging fruit has now been picked.
FYI Claude Code’s default is Auto Mode these days
Canals... where a repeating pattern was the company underestimating difficulty/costs, and going unrecoverably into debt. Another company, which then bought the largely finished canal, cheap, they had potential profit... until tech change (railroads).
Useful (like solar, airlines, fiber), but it won't be profitable. High capital cost, low marginal cost, subject to competition and with technical improvement --> these four factors guarantee businesses will never be profitable, and they go bust.
Do you know the situation with rail, canals, etc?
Once railroads where demonstrated to be (extremely) profitable, people kept building them even if the existing demand was already met. The exact same thing happened with dark fiber (looking at you Enron).
AI is a bit different in the sense that the capacity can be used for research, and more importantly is not bound to a specific connection (between locations), and therefore a lot more fungible.
Not sure about canals, but while I think there are issue with current AI investments, I would not conflate them with the railroad bubble on this basis.
https://www.globalpetrolprices.com/map/electricity_industria...
Those drones hitting high-rise hotels in Dubai were rather eye opening.
Very little wind today here in Scotland and for most of this week - which is a pleasant change I guess...
Even third world countries like India which can't provide basic services to their citizens, have no water, no power, no sanitation or cleanliness are giving hundreds of billions of dollars in incentives (land, power, water, tax subsidies) to hyperscalers, to create at most 2.6 jobs. Google clearing land to build India's largest data centre: https://www.youtube.com/watch?v=dBJPf6Pxfvs
> The UK has even higher energy costs and people seem to want to build data centers here? (Or at least they say they do - looks more like land speculation to me):
There is no meaning to what politicians and crony capitalists do. It is all lies, theft and grift.
https://www.reuters.com/business/media-telecom/microsoft-pul...
Both our high energy prices and the current capabilities of our energy distribution network relative to the renewable generation and storage capacity we are trying to move towards are significant barriers.
A non-trivial percentage of that is artificial.
When push comes to shove and enormous profits (and anything remotely resembling national security) are at stake, the US is decent at removing artificial problems.
You've already seen a ton of that related to chips and data center build outs.
Why is solar more expensive in the US than China? Mainly tariffs. Same for batteries.
Why is nuclear more expensive in the US than South Korea? The government.
Why is SMR never going to beat conventional nuclear if you remove artificial problems? Physics.
This pattern repeats across many industries with large up-front costs.
https://www.japantimes.co.jp/business/2026/07/09/companies/p...
Nor would it have been thrust blindly into the hands of your manager, the marketing department, the CEO, and countless other folks who have no understanding of how it works, its limitations, or its risks.
Look to Europe to see how that has worked out.
Could thing be better with the tech industry here? Sure, but at the same time, profits and industry leaders aren't the only things that matters. And at the very least companies here can't just exploit the public with total impunity.
We shouldn't assume that YC is hosting this forum out of benevolence.
Aren't you? Or, haven't you noticed yet?
Epstein's network is one we know about because its been exposed and because of the sexual abuse aspect of it has both drawn attention and made people less likely to cover up for those involved. Its only a fraction of the corruption that goes on though.
Yes, America is somewhat freer then Russia. Despite aligning itself woth Russia, trying to help it as much as possible last years.
But no, America does not have more freedom or human rights defense then Europe. It has also much worst powerty.
There are a lot of advantages to constitutional monarchies in terms of stability. The monarchs do not actually have much power. I on balance prefer living in the UK and would not want to move to the US. There are pros and cons, and its culture and society (e.g. unarmed police) as well as politics and some if it is about personal circumstances (as someone who is obviously ethnic minority or foreign everywhere in the world I prefer a less racist society, for example).
I can yell "down with the King" or "down with the Prime Minister" pretty much anywhere. There are some restrictions on protest in a few places like Parliament square.
I just think its worse in some other ways.
I am not as optimistic as you. We seem to be stagnating our way into a stark choice between becoming an American tech vassal, a Chinese tech vassal, or losing out the remnants of our ability to compete on the world markets. Half of the continent borrows money at an unsustainable rate in order to pay millions of people to do nothing for decades.
We have made decisions that looked reasonable at the time they were made, but too much has changed in the meantime and now we are stuck in bad equilibria.
The Bismarckian pay-as-you-go pension system was stable as long as people had plenty of kids and died, on average, a few years after retiring. Now they have one kid and spend 20 years in retirement before they die. The maths of that system just does not work out.
The European highly regulated industry was king as long as the rest of the world had no other choice, but now that Asia has industrialized, they are blowing us out of the water. First with lower prices, but now also with quality. German exports are half of what they used to be, with another halving expected. And of course without exports, our current social spending cannot be sustained either - you cannot keep such a massive redistribution mechanism running on an economy based on selling each other cups of coffee in a beach bar.
We just cannot continue to live like that, something will have to yield, but many voters just don't want to hear that.
Speculative bubbles, I.E. risk is where much of the capital comes from to develop these ideas to start. I’m not sure you can have one without the other.
If that was true it is strange that you would find yourself saying as much for a while now, given it sounds most appropriate in response to someone denying the utility of slop generators.
AI models can be deployed on the same datacenter as the old one and be either orders of magnitude cheaper to run, or orders of magnitude more capable.
The only thing that can pop this bubble is if we're not smart enough.
Of course, Google could be wrong about the economics of running old AI processors. Or maybe TPUs are special.
This is a perfect circle of reasoning. The bubble exists because people say the bubble exists and reject data centers, therefore creating the bubble?
This hasn't historically been true. The clusters have been getting bigger along with the models over time.
Not if the datacenters are in space, you can upgrade the models for a little while but once you need to upgrade the silicon you need to launch new hardware.
The companies that sold core infra during dot com mostly died, because they invested in fiber etc far too quickly. Likewise with server factories like Sun.
The B2B and B2C survivors were patchy. A few did extremely well but there were a lot of casualties.
The biggest winners offered B2G - business to government - disguised as search and social media. They were actually selling individual user profiling and targeted ads, and that turned out to be the biggest money maker.
The reason Anthropic and OpenAI appear wildly overvalued is because their offering isn't AI in some abstract sense, it's the next generation of surveillance and persuasion technology. But now with corporate surveillance in addition to the traditional profiling and targeting.
You can tell a lot about what someone is doing - and the industry is doing in general - by looking at everyone's code bases. You don't need to train on them or steal keys to extract immense value.
Potentially there's also the option to eventually make claims on corporate IP developed with AI tech.
Anyone who thinks the companies who pulped and torrented whole libraries of books for their training data would never, ever, pinky promise, try to extract value from the code they're generating is being very naive.
As we all know, GE then went bankrupt and we went back to whale oil.
and, apparently, our brains https://www.media.mit.edu/publications/your-brain-on-chatgpt...
Is it?
Every single vibe-coded software I've ever used looks pretty on the outside but has massive, glaring holes in functionality that make it unusable.
It's like having food faster but then you find out it's actually full of silicone and microplastics.
I wonder why so few people make the comparison to the recent VR hype. We heard the same things there about its unlimited potential and how it's inevitable that we will soon resolve all the shortcomings and it will become ubiquitous.
I still believe VR will eventually live up to it's potential, but no one can deny the bubble has popped after Meta took a huge loss on it. It took too long to resolve the hard problems so the timing didn't work for them.
VR is a toy with a few very narrow areas of application in industry. That does not describe the current status of AI.
AI is already a gigantically transformative technology, with a staggering amount of paid consumption, and virtually everyone I know uses it every day, where I don't know anybody who regularly uses VR in any form.
The ship has absolutely sailed on "is AI a world-changing technology", where "are the leading AI companies worth what's been paid for them" is a completely open question.
AI can maintain the multiverse and administrate it. Everyone can create just by talking.
Coding would also be a good usecase, to see the architecure in 3D and talk with Claude, point at stuff, pick him up and put him where the work needs to be done.
I think it's a match made in heaven, AI is just still way too slow an expensive for this.
Okay, but why would they? And who's going to consume?
If anyone can trivially create, every creation is meaningless. There is no billion-dollar business in abandoned Minecraft servers, so why would this suddenly change when you force people to put on an expensive VR headset to visit them?
Everyone has always been able to trivially create. We live in an attention economy, not a creativity economy. Meaning you can create crap (or ai slop) and people will consume it if you know how to get their attention.
Attention is what gets money. Creation is just fuel for attention. Quality is a part of the equation, but much less important than people generally believe.
Nobody cared about multiverses before AI, and it wasn't because of the lack of maintenance and administration. It's just a thing that nobody cares about, AI improve it but it's not going to make people care about it so that doesn't really change anything.
Obviously AI people say it's because they don't know what they are doing, but are you going to tell me a company like Apple couldn't figure out how translate those productivity gains into something more tangible?
Expect more differentiation in the future and not less.
Fundamentally, people underestimate the marginal increase in utility for marginal increase in “intelligence” as measured in benchmarks. Like I’d pay 5x for a model that has 2 units higher in AA intelligence.
This kind of thing amounts to a LoRa applied to your model. There's no reason (apart from potential IP infringement) that someone else couldn't produce a "Claude LoRa" for their model (or, more likely, given the dislike for Claude's writing style, Anthropic could offer a "non-Claude LoRa" for their own models)
Assuming you meant this for personality, I’d still disagree but not that extensively. I think personality is nuanced and complex - it can’t be simply lifted and shifted. It’s grown using a meticulous process.
Yes, they are lagging.
But "performance of Claude's from 6 months behind" is fine for a lot of tasks. And the performance of today's Claude will be still useful for many (and more and more) tasks in 6 months.
The frontier labs are making models for smaller and smaller share of the pie, as the capabilities of open models grow. That isn't sustainable
Okay, then why would one buy 6-months-ago performance for 2-3x more from an open weights lab as opposed to a closed lab?
OpenAI and Anthropic are competing heavily with GPT-6 Luna and Claude Haiku 5.5!
GPT has the same performance. And performance is definitely a commodity. Why wouldn't it be?
The reasons for this are complicated and nuanced though.
Governments think they push the financial burden of transport maintenance on the people (and its a good tool to register and control people too, but thats not a strong consideration I wouldn’t wager), so they fervently cut spending on public transport and curtail cycling infrastructure in favour of cars.
But roads themselves operate at a crazy financial loss and are one of the reasons governments are in crazy debt (which nobody wants to acknowledge).
This is because road maintenance is significantly more expensive than building new roads.
- Train capacity is much, much higher. You couldn't have the density of France, the Netherlands or even NYC without most people travelling by train. LA struggles with 1/10th of the density.
In fact in the UK you would be forced to aggregate all fuel and road tax and offset it against road maintenance because there is no direct correlation to be made, as tax is “one big bucket”.
The majority of the planet are going from one point of interest to another at a relative constant rate- but yes people are spread further and further- ironically this is helped by requiring huge parking space everywhere anyone needs to go, and needing huge houses so you can park multiple cars outside. Its a self-reinforcing problem.
(This is most evident when comparing cities like Malmö in Sweden with Orlando, FL. Malmö has a higher total population but approximately 1/20th the road surface).
Problem? It is THE BEST solution we have. Any suggested alternatives are worse and less convenient.
Yes, it gets cold in the winter in Sweden- and I sometimes have to wear rainware. But the lack of noise, huge highways and being able to walk if necessary is such a crazy feeling of freedom that you can't possibly imagine.
I literally mean, you cannot imagine.
Being able to drink a beer, and then walk with a friend in the evening with my bike in hand, being able to park anywhere at any time, and being able to replace/fix my bike with no money (or, even buy a new bike without crazy paperwork or registration or licensing for my ability to drive it).
Not having anxiety about paying for parking, fuel or ensuring that I have a place to park, not to mention the lack of abusive road-rage folks.
I've lived in other places, and I've visited supposed "car-utopias" where everything is built to "great" standards and honestly the quality of life is just many orders of magnitude inferior. I've never been to the US and stayed in a nice quiet house without it being 30 minutes drive (in stop/start traffic and with aggressive drivers who cut you off) from anything of any value.
So, no, it's not the best option. It's the best option you can think of.
I'm in Canada, not the US, so maybe it's slightly different. But where I live seems quiet. Comparable to the country at worst, where I lived on a through-road to a beach. It's a suburb but I could walk to a grocery store in like 10 minutes, if that counts as something of value.
> in stop/start traffic and with aggressive drivers who cut you off
The stop and go can be bad during rush-hour near major highways, true. But aggressive drivers sounds like a one off bad experience, or lack of experience driving. I'm not saying it doesn't happen, but they're an exception not the norm.
> So, no, it's not the best option. It's the best option you can think of.
I'd argue a general solution is better than one that only works for some people.
I wouldn't consider a 25 minute commute while being exposed to freezing rain or heatstroke weather to be the best in any way.
Before I could afford to live in the city, I had A 40 minute commute when the roads weren't closed from snow. That's basically impossible on a bike.
I've had, what I consider, enough experience to feel like I know what I'm talking about here.
However, I haven't been anywhere in Canada except Vancouver and Montreal (and: downtowns there exclusively) so you could be right that there's something I'm missing, though you said 25 and I said 15, and I'm going to summon that one thing I said before: it was a 40 minute commute because everything has to be made so far from everything else.
My personal opinion is;
A) People drive to nice train stations which great parking or make use of a wide bus network (which runs infrequently to very low density neighbourhoods)
B) People cycle where they can.
C) the roads are used for deliveries, disabled people and when people need to transport their own heavy goods on the occasion it's required,
D) Minor enforcement based on ANPR (need an expensive permit if it's parked for an aggregate of 10h over a month downtown and a minor limit on how many trips can be made) To keep the roads free for those who really need it.
I know public transport gets a bad rap, but that's because the public transport system available in NA is somehow pretty scary and filled with the worst of humanity. Rubbing shoulders with people doesn't have to feel awful, it does when there is overcrowding and a separate social safety issue.
Just to be clear, there's no specific "road tax" in the UK - it was abolished in 1937. Instead general taxation (e.g. income tax) pays for roads.
Your point about places becoming further apart has been made by Cory Doctorow who refers to it as "geometry hates cars".
While this is _technically_ correct, most powered vehicles on UK roads have to pay Vehicle Excise Duty, which is popularly known as "road tax".
Of course, with the 4th power weight relationship with road damage, ordinary cars are not really causing much damage compared to buses and trucks, so maybe it's better to state that we're subsidising logistics companies.
Is it? People love to have personal sovereignty over their transportation, given the choice.
"The fourth power law (also known as the fourth power rule) is a rule of thumb which states that the damage to the road caused by a motor vehicle increases in proportion to the fourth power of its axle load. This law was discovered in the course of a series of scientific experiments in the United States in the late 1950s and was decisive for the development of standard construction methods in road construction."
"Example: Car (total weight 2 tonnes, 2 axles): load per axle: 1 tonnes vs Truck (total weight 30 tonnes, 3 axles): load per axle: 10 tonnes. [...] The resulting damage differential between truck and car is 15,000 to 1"
PS: this is something electric car proponents don't talk much about. In France, we're getting a "car weight tax" too (https://www.service-public.gouv.fr/particuliers/vosdroits/F3...).
I hope trucks transporting fuel for ICEs get equal treatment.
Also, I just learned that this law doesn't concern fully electric vehicles yet...
Blocking a bus route has a large knock on effect, same for trains, and nobody is taking a bicycle away from you either.
Corporations demanding payment for everything at whatever margin they want is little different than taxation without representation and local cops shaking people down for money at random; just different legal semantics
Without competition you are talking about a monopoly and it is your government that is responsible for mitigating its effects. The government that you elected.
The mechanisms are all there, they just need to be used+embraced.
There is inherently competition with entropy and just getting ourselves out of bed to deal with everything
Corporations and brands and tax codes are just culture war distractions on top of the raw physical competition; middle ages like words of power
The competition is with the physics that binds us to Earth; does it? Or are we just to distracted by rhetorical competition between legal constructs to embrace the levers of science
Rhetorical competition wrt to markets type blather is only seeking internal consistency with an arbitrary rhetorical framework. Not pushing the boundaries of engineering based on science.
Yall can have AI agents simulate Bloomberg terminals so actual physical scientists can focus on the necessities ground truth work you take for granted
Specifically because of massive government investment in road infrastructure in preference of railways. This would be about like the government deciding to funds DCs directly...
Passenger rail also makes sense because the same economies of scale can help drive the prices down, and with enough coverage you get enough freedom of movement for 95% of people, with cars and other road transit bridging the last mile. Lots of countries do this very successfully, it's just not a glamorous business.
That's a remnant of the past, where only a nation state could afford massive projects such as creating a railway line crisscrossing throughout a massive country.
Since the last couple of decades we see private companies investing in railway lines, including high-speed railway corridors. We also see a major liberalization push in Europe to decouple railway operators from infrastructure maintainers, and now there are plenty of private companies operating railway services across the world. In Spain alone there are 2 or 4 private companies providing high-speed railway connections between major urban centers.
Another reason is that the way we find out what works and what not is through experimentation. Especially in a transformation like this it’s impossible to predict which configurations will work and which won’t.
Almost all the "top players" in the dot-com crash died or lived on in relative poverty; only Google and Amazon turned out "very rich".
There were high profile failures but we have had those recently too eg. pet.com (dot com) and color.com (post-dot com, domain has since been repurposed)
I think you're confusing people cashing out with actually creating a successful company. Yahoo is not what people would describe as flagship company, or pets.com or Ask Jeeves or myspace or Voat or whatever. The dotcom bubble made a lot of people rich, but most examples were at expense of bag holders.
if you believe the milton friedman approach to economics, a company has no other value in that what it can provide to the owner (shareholder)
take your millions while it burns and, as the parent said, never fly commercial again
They don't "take the money", there are other people that believe some things (profits/growth in a field) will last forever and will bring 10x return, so they are willing to give them the money.
If you go by current standings in the market, yes, Yahoo is no longer at the top. Yet Yahoo was one of the most valuable and influential tech companies in the late 90s, early 2000s.
The after effects were that it was virtually impossible to raise capital for a while afterwards, so the next round of founders struggled. But then interest rates went to practically zero and money got cheap so it was all good.
You're right, the broad market drags down all retirement savings and those who are about to hit the age of 60+ pay most dearly.
It might be dated but not too long ago a report showed the effect AI had on the SAP 500 and 490 companies couldn't even find any substantial improvement. Mind you, this is during the craze, this is happening while every manager has all the incentives to use as much of the technology as possible, lest they be the one that missed out on the new steam engine. All of these companies invested heavily in cars because none of them wanted to be stuck using horses while everyone else drives off into the sunset... yet most of them didn't manage to measurably outrun the people on horses. That's not the prediction I would have made if I were switching from horses to cars.
Oh, I thought they were about unchecked greed and insufficient regulation, but I suppose that works, too
I don't see all these things as being comparable to AI... At the bottom, they were "100%" technologies. Trains were just able to transport commodities, and the internet was able to reliably connect computers. So their path to success was about gaining market.
Since they were 100% technologies, they disappeared. One could build solutions using them and forget they are building blocks, because they just worked.
LLM AI is different at the fundamental level, because it's non-deterministic. It needs human-in-the-loop. It won't ever disappear. Gaining market share doesn't fix anything.
If SMEs were able to buy and host their own GPUs, they would not hesitate to avoid paying a subscription for access to AI tools. They're already starting to do this.
Models already are a commodity, the massive bump in access prices to profitable levels is not going to happen, because businesses will not pay it.
Not AGI Pilled. NGMI
I also love how well this comment distills the LLM frenzy. People who talk about seeing cult behavior aren't exaggerating - we already have the short, thought-stopping chants, axioms that must be accepted, promises of salvation (GMI) if you accept the messiah (AGI) and absolute conviction in an idea that relies on faith.
I'm not the one making claims that AI will always need humans in the loop forever. Talk about cult beliefs lol. Your levels of cope are reaching hysterical proportions. You're going to be crying about stochastic parrots and hallucinations as these things take over the world.
Yes. And valuation. I think the leading frontier labs will be fine in the long-run and NVidia will be fine. Some of their investors who bought at too high of a valuation, expecting to flip it in too short a time frame will lose a chunk of their money when they have to sell for less.
The hyper-scalers in the middle are the most vulnerable. They borrowed billions at increasingly high rates to lock up GPU and power capacity. They are 'ground zero' of a lot of the 'circular money' deals. Big banks who financed hyper-scalers initially, expecting they could package that debt up and sell it on to diversify, are already struggling to find buyers for the debt, causing its value to drop, which then forces the banks to cover with more collateral, and that's how the snowball starts down the mountain.
And do these not all have established business models that are ridiculously profitable, and huge cash reserves?
How the heck are THEY vulnerable, and the "bare" frontier labs like Anthropic and OpenAI with no preexisting business models or profits, but equally ridiculous borrowing are supposedly not?
Google, Meta, Amazon, MS have huge cash-producing businesses they can just fall back on. Of course the stocks will get hammered in the short term, but they are still sitting on cash volcanos.
Pure AI plays are what are most at risk. In the bad case, all the CoreWeave type companies have their assets acquired on the cheap by the existing big players. In the armageddon case, companies like Anthropic and OpenAI also end up in the discount bin.
Hyperscalers are FAANG.
No, by Hyperscalers (HS) I was referring to the pure-play companies doing the massive build outs of mega-scale data center farms for FAANG and frontier labs (FL). FL / FAANG own some of their own mega-scale data centers but they don't want their business to become too invested in real-estate and GPU depreciation. While it might lower costs to invest BIG capital in vertical integration (owning the whole value chain), the margins in that part of chain are too low to support FAANG stock prices.
So they are using a mix. Some of their own but mostly leveraging OPM (other people's money) through Hyperscalers for pure-play AI. FAANG view data centers necessary for their own core product needs (like AWS or Google Search / Gemini) in a different financial bucket than pure play AI scaling. The fact they are able to resell their excess DC capacity for pure AI to OAI/Ant so profitably right now is an opportunistic windfall, not a long-term plan. In fact, it's actually off-plan in a sense because their financial plan was not to invest tons of capital to sell AI compute on "margin-plus". It's just that the "margin-plus" margin is incredibly frothy right now. Their strategists don't think that will still be true in five+ years.
That's why their long-term mode is leaning to doing a mix and largely relying of external Hyperscalers for non-core AI capacity. Their strategy is generally, "Own our own AI compute for minimal baseline needs for our branded products (we sell to the final end-user)." Then they want to use Hyperscalers for non-core and excess capacity because HS are borrowing billions on debt markets using FAANG contracts to secure those loans. I explain why and how we can be in both 'rapid growth' and 'increasing bubble danger' at the same time in more detail here: https://news.ycombinator.com/item?id=50430395.
NVIDIA will take a huge hit and we will probably end up with anti circular financing laws.
Frontier labs are losing money and are most likely to go bankrupt and be absorded by bigger companies.
Hyperscalers will take a huge beating but they are ultimately profitable and they already control the frontier labs. So after a hard crash they will be fine. A lot of their debt is actually offloaded onto pension funds, insurance companies, etc. Those risk bankruptcy.
I think we're essentially saying nearly the same thing and agree it eventually leads to a similar outcome. The difference is in part saying it in different ways and in part addressing the flow and feed backs at different points. Ultimately there are three key players in an ecosystem flow that supplies end-user demand:
[NVidia (NV)] <-> [HyperScalers (HS)] <-> [Frontier Labs (FL)]
TSMC is upstream of NV but they're diversified enough to be sheltered, and end user demand is the ultimate gating factor. Most people agree that in the long-term (10+ yr) AI compute services will be a very big viable business.
> Frontier labs are losing money and are most likely to go bankrupt and be absorded by bigger companies.
Anything's possible but I don't think that's likely. It really depends on who is left 'holding the bag' on committed contracts and callable loans. While all the Frontier Labs have essentially taken what nets to equity-secured loans from NV, AFAICT it's not collateralized in way that NV (nor HS) can force FLs into bankruptcy. Creditors with capital were willing to take FL equity for cash, making them investors, not creditors. Post-IPO that will change. FL sales will continue to steadily grow but not at rates required to make their equity worth what investors thought it would be worth in the time frame they expected/needed.
> Hyperscalers ... already control the frontier labs.
Through what legal or financial mechanisms is this control? If end-user demand continues to grow super-linearly, FLs will need more compute from HS than they get. In that case, HS continue to have pricing power due. If future end-user demand growth rates taper from super-linear to just strong linear, FLs will need less compute than they've projected. HS pricing power will erode.
Hyperscalers ... are ultimately profitable
HS are collateralized to their bankers, GPU and power suppliers in ways that CAN force bankruptcy. When demand softens, prices will fall. HS have bought, and committed to buy, more GPUs, power and real estate sooner than they are going to need it from people who CAN force them into bankruptcy. The HS have secured their loans by pledging their GPUs, committed power contracts and real estate/physical plants as collateral.
When cash flow is high and the growth rate of cash is increasing, lenders will loan $2 to $4 for every dollar of 'sellable asset' the loan is secured by. The HS are already extending their GPU depreciation time frames to SIX years which inflates the forward book value of their GPUs - so they can borrow more at cheaper rate. When the growth rate of cash flow starts to taper from super-linear to just very good, lenders start to demand more collateral per dollar (or capital costs go up). Both are already happening.
Google, Amazon owns Anthropic shares. Microsoft owns OpenAI shares. Fairly sure some of the others also have Anthropic and OpenAI shares. And I mean large chunks, at least 5% up to 30%, I think.
I agree with the rest but I think hyperscalers will just get drastic haircuts.
> hyperscalers will just get drastic haircuts.
I think everyone may get drastic haircuts (though I'm still hoping for a 'soft unwind' type slow-mo crash, I don't think the odds are good). Hyperscalers are what probably breaks first and worst because more of their money is from creditors vs investors, combined with, more of their creditors are financial speculators / banks who have no vested interest in propping up the AI market (like an NV, FL do). They are only loyal to their cash.
I believe AI is here to stay as general concept turned into practically working implementation.
What that practicality means is we all who consume AI are learning but we're still in the early adopters phase of all that.
Of course AI companies invest a lot and try to stay on top of the traction but I also believe not all of them will survive test of time.
I personally believe that a lot of over investment in data centers and supply of energy will be burnt and will have to be reinvested somewhere else when technology advances enough to "miniaturize" AI enough so it won't require couple of football fields to provide what it does today.
I do believe cloud based AI will be always attractive to small business if price is right and to big enterprises so they don't need to invest inhouse for the scale they need, but that will be sort of alliance based enterprise B2B market.
anything between (including me for the scale I represent business wise), I can't wait until I will be able to buy appliance from 12 to 48U maximum that can do all what me and my company needs AI wise as local AI.
moment subscriptions become equally expensive as pay as you go models, I switch to mac studios with 96GB and reasonable weighted models that will be specialized in something instead of one LLM/AI to prompt everything to it and hoping it can address all sort of problems as one solution.
AI one day must fly to space, be called Mother and discover aliens. it can't be 6 football fields as physics won't let it take off. It must be one day small enough so we all can have ChatGPT 6.1 medium model at home without subscription, just as fixed price with TCO over lifecycle of the whole appliance (software + hardware together)
that may become a drama to many companies that apparently may not be worth trillions unless they diversify enough its AI offering.
We're discussing economics, not science fiction.
If that line about space is the only line you picked up as meaningful, then you missed whole point made and your economics is science fiction, buddy
I didn't used to be able to perform square roots, but that doesn't mean taking another math class will enable me to find the last digit of pi.
That's a bubble. It happens every time because it has to happen every time. If you stay out of the game, the people who stay in the game win and your holdings in redundant technology are worthless.
Hysteria + widespread financially illiteracy means there are lots of people prepared to buy AI stocks at any price. They're adamant to get in (FOMO).
Suppose OpenAI will be a successful company into the long term, and you bought its stock at a $5T valuation. After several reporting seasons and subsiding hype, its true worth turns out to be closer $1T. OpenAI could still be enormously successful, but anyone you bought at much over $1T valuation is going to get hurt.
Every single railroad company failed. That repeated several times.
The ones that existed on the end were created by assembling the capital brought on the bankruptcy of the original ones. Most of those failed too.
That's how a bubble is. No original investor got out ahead.
Financiers and Entrepreneurs are playing the game better then they used to, they should both survive at higher rates.
That means that in reality we didn't get any single actual bubble pop since the end of WWII. That may happen again this time, or maybe it won't. The amount of money running around is looking like something the governments can't save, but I did think the same in 2007.
Anyway, no financiers and entrepreneurs never know what to do with a black swan.
I don't think so.
The reality is that the adoption is incredibly fast and that revenues of the AI labs are like doubling by the quarter.
Further, there is the expectation that breakthroughs in applying AI to science, robotics, or medicine may unlock trillions in value.
That this will take 20 years, rather than happen before 2030, is just speculation. None of us can see the future.
They’re still losing gigantic amounts of money. Whether that is because they’re “flooring it” as it were and growth will eventually catch up, or because the business idea is fundamentally flawed and just temporarily alive because of investor risk appetite, is the fundamental question underpinning whether it’s a bubble or not, and nobody knows the answer to that question for sure. That’s how bubbles work.
They are already profitable and are investing enormous amounts into datacenter buildout to meet demand over the next years.
I believe your $14B OpenAI number is from 2025 though.
"Boom and bust is not about revenue. To find that kind of risk, start by reading the balance sheet... [The 2008] bust came from off-balance-sheet instruments."
https://kennyfraser.substack.com/p/anthropic-ipo-part-one-wh...
Patrick Boyle goes into a deep dive that's well worth the watch:
The speculation that the AI investment sector depends on is not just that adoption is incredible and that the value it generates is high, it's ALSO that the companies will be able to capture a significant amount of that value generation for themselves via fees or some other mechanism.
Are the LLM vendors more comparable to Google/Apple in this scenario, or more comparable to AT&T and Bell?
In this comparison they are more like Apple and Google: they are ahead in research and are able to offer better technology than their competitors.
The six month gap between the open-weight models and the frontier has not closed yet.
The bubble exists because c-suite people are sheep. They follow the herd, and the frontier CEO wolf-wannabes have been trying to herd them in a profitable direction.
But herds are easily frightened, and there's always a danger they'll stampede in a different direction.
And the risk of a catastrophic AI-enhanced online blackout is increasing.
The cheaper open-weight ones, even if they were available with our enterprise contracts, would be a huge downgrade.
How is that compared to the speed at which money is thrown in them? And how much of the profit downstream they might indeed potentially capture with high retention rate?
Bubble can’t be assessed on mere quarter profit expansion over short period (relative to large company group life expectancy).
Don't you think that it's less than reasonable to suggest that the technology will take on the order of 20 years to mature into widespread adoption and profitability?
Then you should invest heavily in their IPO, I suppose.
You'll do much better than those of us who believe there is no way their financials can ever work.
I came to my conclusion a different way, I ran different models locally and saw the amout of compute required for basic things. From that I extrapolated some napkin unit economics, and I couldn't find any way to build a profitable business from it.
I don't assume I'm the smartest guy in the room though, so for all of our sake, I hope you're right.
I'm not sure if that is relevant here, but I've often seen people dramatically overestimate inference costs.
If we look at eg. https://inferencex.semianalysis.com/run/kimi-k31-pro-on-b300, it suggests that SOTA models are likely served in the API with profit margins in the ballpark of 98%.
In which case, the people being profitable won't be the generic big LLM companies. It'll be the people who use the LLMs, or (maybe) specialized AI companies that still have a niche and moat.
> And today's AI, for as revolutionary as it may be, is taking just as long to mature as anything in the past.
They may be as expensive to mature (in terms of equivalent duration of total economic output), but by the wall-clock we've gone from "invent Transformers to make translation less bad" to "solves Millennium maths problems" in 9 years.
After 9 years of railroads… well, those were originally an Ancient Greek way to drag ships over an otherwise annoying bit of land, and the more modern attempt had wooden rails and a rope for humans and animals to pull for around 250 years so let's say after 9 years of the steam locomotive: 1784 for the prototype, 1802 for the "first full-scale working railway steam locomotive" (according to Wikipedia), so 9 years past the invention and it was still a prototype.
Semiconductors (well, transistors, i.e. us understanding the process and doing it deliberately, rather than getting lucky with cat's whiskers before we had any clue about quantum mechanics) did at least get commercialised in less than 9 years, but AFAICT in the form of "now our radios are better, sturdier, and smaller" which is a rather smaller change than what's already happened since Transformers.
(Of course, why Transformers, rather than the other attempts at AI? Transformers are when people cared this time around, but there have been previous AI bubbles. I'd argue those are like pointing at 1515 (or the Ancient Greeks) for the railway, or cat's whiskers for semiconductors).
That's an interesting claim but it needs support. How are you comparing their maturity rate? AI is arguably maturing very fast.
This is so demonstrably incorrect it's hard to even begin a counterargument to this point.
Seriously this is just missing the entire point
WHAT?!?
This is a wild statement to make.
The pace of AI development and adoption has been insanely fast compared to virtually every major technological revolution in history.
We've gone from AI barely being useful to hundreds of millions of people using it in their daily lives in just a few years.
I think the internet and social media have completely warped our perception of time if we're looking at what's happened with AI over the last 3–4 years and concluding that it's taking too long to mature.
Rough estimate from 'invention' to 'widespread adoption':
* Automobiles: 1886 invention → 1920s mass adoption. ~40 years.
* Airplanes: 1903 first flight → 1950s mass commercial air travel. ~50 years.
* Plastics: 1907 Bakelite → 1950s widespread consumer applications. ~40+ years.
* Mobile phones: 1973 first handheld prototype → 2000 majority US adoption. 27 years.
* Personal Computers: ~1975 → 2000 majority US household ownership. ~25 years.
* Smartphones: 2007 iPhone → 2013 majority US adult adoption. 6 years.
* Chat GPT: ~3 years from GPT-2 "it kinda chats with you" to GPT-6 Astra "It's writing entire code bases"