Comment by codingdave | Hacker News Reader

Comment by codingdave | Hacker News Reader

That is a really good comparison - in the dot com bubble, money got thrown at anything that was "an internet business". People would throw up static content sites, get some traffic, and be handed money.

LLMs have absolutely put us in a similar place. People are getting customers/money by saying "Look at our AI-driven features!" But give it 5-10 years, or maybe less, and that will seem silly. People will be using LLMs for focused use cases and making sure they help the end users. You will be evaluated with a higher standard - of what you actually accomplish with your products. Saying your product is "AI-driven..." will be as stilly as saying your product is "RDBMS-driven..." would be today. Because it will be a foundational piece of the tech stack, not a marketing blurb.

I doubt it will be as big of a bubble as the dotcom crash, though. We may all still fall victim to hype cycles, but it is hard to explain just how low the bar was for investment during the original dotcom bubble. We are collectively wiser now, even as we stumble along the way.

> But give it 5-10 years, or maybe less, and that will seem silly. People will be using LLMs for focused use cases and making sure they help the end users. You will be evaluated with a higher standard - of what you actually accomplish with your products.

This day cannot come fast enough in my opinion. Hype is tiring and ultimately detrimental in the long term (more disappointment than fulfilled wishes), in terms of opportunity cost of what could have been invested in instead.

How does one escape this?

I'm not sure that you want to escape it. This is just part of how capitalism works. A large percentage of investments fail and a small percentage have massive returns. You don't get the big returns without making a lot of risky investments, too.

For those looking for some relatively light financial reading related to the question of "how does one escape this?":

Morgan Housel (a writer at the collab fund) has written about how cycles of boom and bust are inherent to markets.

https://collabfund.com/uploads/Collaborative%20Fund%20--%20T...

The first section "1: The Inevitability of Insanity Among Sane People" is probably the most relevant, and a more summarized version is from Housel directly: https://collabfund.com/blog/the-laws-of-investing/

And another great level-headed financial writer Howard Marks has a great "memo" about how bull markets (sometimes read: bubbles) rhyme. Specifically the section "Optimistic Rationales, Super Stocks, and the New, New Thing".

https://www.brookfieldoaktree.com/sites/default/files/2023-0...

I can't find the exact quote, but I feel that one of them basically once said that you wouldn't really want a market to not have bubbles, if something didn't have the ebbs and flows that financial markets have, there wouldn't really be any room to find niches or to innovate because innovation requires risk, and risk inherently destabilizes any existing stability (re: the first article).

I think the same can be said of crashes… Or at least recessions… You would not want a market without corrections or recessions.

I can’t stop beating this analogy to death:

A market that is never allowed to fall into recession is like a forest whose fires are always snuffed out immediately… One of these days it’s gonna go and when it does the resulting conflagration will be many, many times worse than if It had been allowed to burn a little bit here and there…

My life has been: The soviets are out to get us, computers are amazing and revolutionary, the muslim terrorists are out to get us, peak oil, the banks have collapsed, PV is amazing, oh no a pandemic, AI is god/the devil incarnate.

If that's reflective of the broader human condition, we only avoid hype by having a scapegoat to demonise… or possibly the causality is the opposite direction and we only avoid demonising scapegoats by hyping something up.

By ignoring it? Nobody's forcing you to read news, read tweets, or listen to every clown talk about AI. Just put your head down and solve real problems and focus on the end users and providing real value

Fair. More specifically what I meant was how can one avoid being subject to being pulled away from providing real value when superiors are wooed by hype. In that sense just ignoring it is not easy if you care at all about your work.

I personally give it no more than 1-2 years before the starry eyed believers come back down to earth and start selling off their stock whilst they can. Then it will be exponential backoff.

AI is a bit of a bubble but even the natural language capabilities alone are revolutionary as far as computers go. Anyone who thinks it’s only hype either had a misunderstanding of what computers could do before AI, or isn’t paying attention. It will be years until software can fully leverage it and it’s completely baked into the way we interact with computer systems akin to the popularization of the graphical user interface in the 1980s

Is it really a bad thing that people are trying crazy stuff? This is a new technology that people don't fully understand. Yeah, most of these AI features and companies will die, and I'm sure the investors know that, they're just gambling on being in the 1% that survives. In the end we will have learned some good lessons on how to apply this tech instead of having it waste away in Google or Microsoft's closet.

> Is it really a bad thing that people are trying crazy stuff?

There's a major difference between different kinds of "crazy new stuff".

One kind is things that are just beyond the current frontier, and things people obviously kind of want, like say self-driving cars. It's another thing if we're talking about haphazardly bolting the new hotness in a distracting, pointless, or detrimental manner onto every single tech stack in the entire world, regardless of whether people actually want it, and regardless of whether it hurts end-users.

Lots of the current activity with AI is clearly more in the 2nd category than the 1st. In terms of end-users, things like job searches, home/apartment searches, loan applications, college admissions, etc are just a few of the most obvious examples where things are about to get muuuuuch worse for almost everyone (and it was already kind of awful).

Businesses/institutions generally don't care about end-users of course, but I would argue that it won't really help them either. It will just become another very large cost of doing business in the modern world, something you have to do to even be involved, similar to marketing/advertising/legal-council and the rest of the boring-but-necessary overhead. A necessary evil but one with very ambiguous ROI.

I don't agree that there is a distinction in the types of innovation you describe. We don't know how AI will be applied 10 years from now, shis isn't even really a tech question, it's a product question.

The bar for AI investment is also incredibly low right now. People are throwing crazy amounts of money at everything. It would be incredibly surprising if there isn't a massive investment bubble right now that pops in a year or so. That's true even if the underlying technology is the real deal and is going to be transformative. Probably even _more_ likely if AI is real, in fact, because if it's bullshit, the bubble won't have time to get very large before people stop investing in it. All you need is a few big pay days to keep it going.

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