I enjoyed Sabine’s analysis in another video that continuing to make increasingly larger models with more compute is about as effective as continuing to make larger and larger particle accelerators. Come on, bro, this million km Gigantic Hadron Collider will finally get us to the TOE. Just one more trillion, bro.
this post was submitted on 15 Sep 2025
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And then AI will just go away and everything will go back to normal again, yes? It'll suddenly stop working and so people will stop using it for all the things they're currently using it for.
people will stop using it for all the things they're currently using it for
They will when AI companies can no longer afford to eat their own costs and start charging users a non-subsidized price. How many people would keep using AI if it cost $1 per query? $5? $20?
OpenAI lost $5 billion last year. Billion, with a B. Even their premium customers lose them money on every query, and eventually the faucet of VC cash propping this whole thing up is gonna run dry when investors inevitably realize that there's no profitable business model to justify this technology. At that point, AI firms will have no choice but to pass their costs on to the customer, and there's no way the customer is going to stick around when they realize how expensive this technology actually is in practice.
There are free open models you can go and download right now, that are better than SOTA 12-18 months ago, and that cost you less to run on a gaming PC than playing COD does. Even if openai, anthropic et al disappeared without a trace tomorrow AI wouldnt go away.
And those are useful tools, which will always be around. The current “AI” industry bubble is predicated on total world domination by an AGI, which is not technically possible given the underpinnings of the LLM methodology. Sooner or later, the people with the money will realize this. They’re stupid, so it may take a while.
The post I was replying to was saying
people will stop using it for all the things they're currently using it for
They will when AI companies can no longer afford to eat their own costs and start charging users a non-subsidized price.
i.e. people will stop using AI when user have to pay the "real" price (what this is is left unspecified and an exercise to the reader to figure out). My point was that even if the AI price from those provided to infinity AI usage wouldnt drop to zero like they imply.
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Yes, just like the internet died after the dotcom bust.
The dot-com bubble didn't build the internet. The internet still would have been built up if pension funds were not buying toiletpaper.com for millions of dollars. Bubbles, pretty much by definition, are specifically about the part of the economy where huge sums are invested into things that are not worth anything (i.e., full of air).
LLMs would still be developed without a trillion-dollar bubble. Slower, sure, but all the crazy investment isn't about developing tech, it's about speculating on who will stumble on AGI and suddenly be able to run companies with 1% of the workforce of traditional companies. It's gambling. When the gamblers figure out that a casino doesn't pay out, they all leave at once.
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Absolutely not. AI tech will continue to be pushed by C-suites convinced they can surplus a fraction of their workforce eventually. The change will be that most of the investments in AI companies will disappear overnight and most will go belly-up. It will erase a significant fraction of everyone's pension funds, and federal governments around the world will pour public funds into propping up the larger companies so that they don't go under too. Heads they win, tails you lose.
Naw, it'll just be "software" and not "magic thinking machine". Chatbots and "virtual assistants" existed before, just no one was using them because they're a) cringe, b) faster and more efficient to do it yourself.
I highly doubt it will, but I would not be sad if it did.
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I work in finance (IT side) if the bubble is gonna burst all the ppl making money off of it haven't got the memo and I trust their collective intelligence over this woman.
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With Shiller PE at 40x, only fools are investing into the market right now. History will be the judge again in due time. It's a repeat of the 1920s.
Where do you invest then? Because keeping all cash sounds bad at the moment too.
There are plenty of profitable companies with lower PE ratios.
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