Seems like a measured approach- my read is him saying it’s probably a bubble in that bad ideas are being funded too, but there are a lot of really good ideas doing well.
Also nit: Typo right in the digest I assume, assuming “suring” is “during”, does cnbc proofread their content?
I think most level-headed people can see this is a giant bubble which will eventually burst like the dot-com crash. And AI is technology that's hard to understand to non-technical (and even some technical) investors.
But of course, every company needs to slap AI on their product now just to be seen as a viable product.
Personally, I look forward to seeing the bubble burst and being left with a more rational view of AI and what it can (and can not) do.
What is going on with AI right now could be a bubble just like there was the dotcom bubble. But it isn't like the internet went away after the dotcom burst. The largest companies in existence today are internet companies or have products that wouldn't make sense without the internet.
Sure, many of these "thin prompt wrapper around the OpenAI API" product "businesses" will all be gone within a few years. But AI? That is going to be here indefinitely.
Every bubble looks obvious in hindsight. The dot-com crash left behind Amazon and Google. The crypto crash left behind Coinbase and a few real revenue generating companies. If this is the AI bubble, then the survivors are going to look very obvious in a decade, we just don’t know which ones yet.
> “That is what is going to happen here too. This is real, the benefits to society from AI are going to be gigantic.”
As an owner of a web host that probably sees advantage to increased bot traffic, this statement is just more “just wait AI will be gigantic any minute now, keep investing in it for me so my
investments stay valuable”.
He's (unsurprisingly) making an analogy to the dotcom bubble, which seems to me correct. There was a bubble, many non-viable companies got funded and died, and nevertheless the internet did eventually change everything.
Very few people predicted LLMs, yet lots of people are now very certain they know what the future of AI holds. I have no idea why so many people have so much faith in their ability to predict the future of technology, when the evidence that they can't is so clear.
It's certainly possible that AI will improve this way, but I'd wager it's extremely unlikely. My sense is that what people are calling AI will later be recognized as obviously steroidal statistical models that could do little else than remix and regurgitate in convincing ways. I guess time will tell which of us is correct.
> [At dotcom time] There was a bubble, many non-viable companies got funded and died, and nevertheless the internet did eventually change everything.
It did, but not for the better. Quality of life and standard of living both declined while income inequality skyrocketed and that period of time is now known as The Great Divergence.
> He's (unsurprisingly) making an analogy to the dotcom bubble, which seems to me correct.
He's got no downside if he's wrong or doesn't deliver, he's promising an analogy to selling you a brand new bridge in exchange for taking half of your money... and you're ecstatic about it.
The 90s bubble also had massive financial fraud and laid capital that wasn’t used at 100% utilization when it hit the ground like what we are seeing now.
It’s different enough that it probably isn’t relevant.
"AI is in a bubble but billionaires will get 'gigantic' benefits"
I see no benefit to anyone unless you can live off your stock portfolio and can easily ride through periods where your portfolio can suffer a 50% loss.
My understanding is that the cost of training each next model is very very large, and a half trained model is worthless.
Thus when it is realised that this investment cannot produce the necessary returns, there will simply be no next model. People will continue using the old models, but they will become more and more out of date, and less and less useful, until they are not much more than historical artifacts.
My point is that the threshold for continuing this process (new models) is very big (getting bigger each time?), so the 'pop' will be a step function to zero.
Why do you think the models will become out of date and less useful? Like, compared to what? What external factor makes the models less useful?
If it's just to catch up with newly discovered knowledge or information then that's not the model, they can just train again with an updated dataset and probably not need to train from scratch.
I'm paying for 3 different AI services and our company and most of my team is also paying money for various AI stuff. Sounds like a real industry to me. There's just going to be VC losers as always, where usually "losing" is getting bought by a bigger company or aquihires instead of 100xing or going public.
My team is doing the same, and yet all of us still aren't sure that we're actually more productive overall.
If anything it seems to me like we've just swapped coding with what is effectively a lot more code review (of whatever the LLM spits out), at the cost of also losing that long term understanding of a block of code that actually comes from writing it yourself (let's not pretend that a reviewer has the same depth of understanding of a piece of code as an author).
He may be right, everything points to that conclusion. My main issue is - why the fuck do we care what Bezos thinks on this matter? His ML efforts all lag behind the competition and he’s certainly not an expert in the field of deep learning. Why?
If you're asking yourself why hasn't the bubble burst when everyone is calling it a bubble it's because no one wants to stop dancing until the music stops. If you told an investor the market will collapse tomorrow with 100% certainty they will invest today like there is 0% certainty of it happening tomorrow.
Do I have this right that there have been no or at least very few pure AI IPO's during this cycle (I can't actually think of a single one)? So it's dissimilar to dotcom in that regard because during that time countless dotcoms went public with sky-high valuations and then failed. A bunch of reputable companies also went or were already public during that time and those saw huge valuation drops so that's more analogous to what could happen in the public market (NVDA, for instance, could pull a Cisco and drop "catastrophically," but survive just fine).
That would cause a lot of pain for those shareholders, but would that be somewhat contained given the public "AI" companies for the most part have strong businesses outside of AI? Or are these market caps at this point so large for some of these AI public companies that anything that happens to them will cause some kind of contagion? And then the follow up is if the private AI companies collapse en masse is that market now also so big that it would cause contagion beyond venture capital and their investors (fully aware that pensions and the such are material investors in VC funds, but they're diversified so even though they'd see those losses maybe the broader market would keep them from taking major hits).
Not giving an opinion here, though my knee jerk is to think we're due for a massive drop, but I've literally been saying that for so long that I'm starting to (stupidly) think this time is different (which typically is when all hell breaks loose of course).
there is no way they could raise that much money from public markets.
Also, there s no need to invent new tech names anymore. Marketing can add "AI" to the company name, or (as they say), change the wording from "Loading..." to "Thinking.."
That's a very relevant question. And as your question implies, we all know which society the billionaires talk about. But AI is just a technology like any other. It does have the potential to bring great benefits to humanity if developed with that intent. It's the corruptive influence of the billionaire and autocrat greed that turns all technologies against us.
When I say benefits to humanity, I don't mean the AI slop, deepfakes and laziness enabler that we have today. There are niche applications of AI that already show great potential. Like developing new medicines to devising new treatments for dangerous diseases, solving long standing mathematical problems, creating new physics theories. And who knows? Perhaps even create viable solutions for the climate crisis that we are in. They don't receive as much attention as they deserve, because that's not where the profit lies in AI. Solving real problems require us to forgo profits in the short term. That's why we can't leave this completely up to the billionaires. They will just use it to transfer even more wealth from the poor and middle classes to themselves.
Counter prediction. AI is going to reduce the (relative) wealth of the tech companies.
AWS and Facebook have extremely low running costs per VPS or Ad sold. That IMO is one of the major reasons tech has received its enormously high valuation.
There is nuance to that, but average investors are dumb and don't care.
Add in a relatively high fixed-cost commodity into the accounting, and intuitively the pitch of "global market domination at ever lower costs" will be a much harder sell. Especially if there is a bubble pop that hurts them.
Once upon a time, society was all of us, but Society were the filks that held coming out parties and gossiped about whose J-class yacht was likely to defend the America's cup.
Society with a capital S are the beneficiaries of the bubble.
Bezos didn't define "society", but knowing Devil is what Devil does, we can infer:
1. Amazon files the most petitions for H1-B work visas after Indian IT shops.
2. Amazon opposed minimum wage increase to $15/hr until 2018!
3. Amazon not only fires union organizers, it's claiming National Labor Relations Board is unconstitutional!
It is all society as long as they have access, and they do. Even if the big labs get more closed off, open source is right there and won’t die.
AI increases everyone’s knowledge and ultimately productivity. It’s on every person the learn to leverage it. The dynamics don’t need to change, we just move faster and smarter
This shouldn't be a surprise - capitalism always overshoots. Anything worth investing in will generally receive too much investment in because very few people can tell where the line is.
And that's what causes bubbles but at this point it should be clear that AI will make a substantial impact - at least as great as the internet, likely larger
I see that my Echos want me to enable the new Alexa. I confess a great deal of trepidation on these. Fairly confident that this is not going to go smoothly.
And again I'm baffled on how they would light such good will and functionality on fire.
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[ 3.3 ms ] story [ 69.9 ms ] threadAlso nit: Typo right in the digest I assume, assuming “suring” is “during”, does cnbc proofread their content?
But of course, every company needs to slap AI on their product now just to be seen as a viable product.
Personally, I look forward to seeing the bubble burst and being left with a more rational view of AI and what it can (and can not) do.
Sure, many of these "thin prompt wrapper around the OpenAI API" product "businesses" will all be gone within a few years. But AI? That is going to be here indefinitely.
As an owner of a web host that probably sees advantage to increased bot traffic, this statement is just more “just wait AI will be gigantic any minute now, keep investing in it for me so my investments stay valuable”.
(title fixed now)
It will become so valuable so fast we struggle to comprehend it.
It's certainly possible that AI will improve this way, but I'd wager it's extremely unlikely. My sense is that what people are calling AI will later be recognized as obviously steroidal statistical models that could do little else than remix and regurgitate in convincing ways. I guess time will tell which of us is correct.
It did, but not for the better. Quality of life and standard of living both declined while income inequality skyrocketed and that period of time is now known as The Great Divergence.
> He's (unsurprisingly) making an analogy to the dotcom bubble, which seems to me correct.
He's got no downside if he's wrong or doesn't deliver, he's promising an analogy to selling you a brand new bridge in exchange for taking half of your money... and you're ecstatic about it.
It’s different enough that it probably isn’t relevant.
https://www.youtube.com/watch?v=E0x3UZDKSNo
"AI is in a bubble but billionaires will get 'gigantic' benefits"
I see no benefit to anyone unless you can live off your stock portfolio and can easily ride through periods where your portfolio can suffer a 50% loss.
Thus when it is realised that this investment cannot produce the necessary returns, there will simply be no next model. People will continue using the old models, but they will become more and more out of date, and less and less useful, until they are not much more than historical artifacts.
My point is that the threshold for continuing this process (new models) is very big (getting bigger each time?), so the 'pop' will be a step function to zero.
If it's just to catch up with newly discovered knowledge or information then that's not the model, they can just train again with an updated dataset and probably not need to train from scratch.
If anything it seems to me like we've just swapped coding with what is effectively a lot more code review (of whatever the LLM spits out), at the cost of also losing that long term understanding of a block of code that actually comes from writing it yourself (let's not pretend that a reviewer has the same depth of understanding of a piece of code as an author).
These companies are burning cash to support the current formulation of AI services.
These services will survive because they are useful but probably not at its current cost
For example:
- Dotcom bubble. Of course making website was and is a real industry.
- Japanese real estate bubble. Of course building houses was and still is a real industry. It's so real people call it real estate, right.
That would cause a lot of pain for those shareholders, but would that be somewhat contained given the public "AI" companies for the most part have strong businesses outside of AI? Or are these market caps at this point so large for some of these AI public companies that anything that happens to them will cause some kind of contagion? And then the follow up is if the private AI companies collapse en masse is that market now also so big that it would cause contagion beyond venture capital and their investors (fully aware that pensions and the such are material investors in VC funds, but they're diversified so even though they'd see those losses maybe the broader market would keep them from taking major hits).
Not giving an opinion here, though my knee jerk is to think we're due for a massive drop, but I've literally been saying that for so long that I'm starting to (stupidly) think this time is different (which typically is when all hell breaks loose of course).
Also, there s no need to invent new tech names anymore. Marketing can add "AI" to the company name, or (as they say), change the wording from "Loading..." to "Thinking.."
When I say benefits to humanity, I don't mean the AI slop, deepfakes and laziness enabler that we have today. There are niche applications of AI that already show great potential. Like developing new medicines to devising new treatments for dangerous diseases, solving long standing mathematical problems, creating new physics theories. And who knows? Perhaps even create viable solutions for the climate crisis that we are in. They don't receive as much attention as they deserve, because that's not where the profit lies in AI. Solving real problems require us to forgo profits in the short term. That's why we can't leave this completely up to the billionaires. They will just use it to transfer even more wealth from the poor and middle classes to themselves.
AWS and Facebook have extremely low running costs per VPS or Ad sold. That IMO is one of the major reasons tech has received its enormously high valuation.
There is nuance to that, but average investors are dumb and don't care.
Add in a relatively high fixed-cost commodity into the accounting, and intuitively the pitch of "global market domination at ever lower costs" will be a much harder sell. Especially if there is a bubble pop that hurts them.
https://marshallbrain.com/manna1
How are you defining rich, Billionaires? It's sad that your comment is the top post.
Society with a capital S are the beneficiaries of the bubble.
1. Amazon files the most petitions for H1-B work visas after Indian IT shops. 2. Amazon opposed minimum wage increase to $15/hr until 2018! 3. Amazon not only fires union organizers, it's claiming National Labor Relations Board is unconstitutional!
AI increases everyone’s knowledge and ultimately productivity. It’s on every person the learn to leverage it. The dynamics don’t need to change, we just move faster and smarter
Could some let Bezos know that he doesn’t truly represent society in any way?
And that's what causes bubbles but at this point it should be clear that AI will make a substantial impact - at least as great as the internet, likely larger
And again I'm baffled on how they would light such good will and functionality on fire.