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11thEarlOfMar

At least this time, people are actually asking the question.

NVDA::AI

CSCO::.COM

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Or possibly NT::.com

I remember seeing interviews with Nortel's CEO where he bragged that most internet backbone traffic was handled by Nortel hardware. Things didn't quite work out how he thought they were going to work out.

I think Nvidia is better positioned than Cisco or Nortel were during the dotcom crash, but does anyone actually think Nvidia's current performance is sustainable? It doesn't seem realistic to believe that.

People who fought in WW1, thought WW2 would be similar. Especially on the winning side.

There is no specific reason to assume that AI will be similar to the dotcom boom/bust. AI may just as easily be like the introduction of the steam engine at the start of the industrial revolution, just sped up.

Indeed, but a lot of railroad startups went out of business because their capital investments far exceeded the revenue growth and they went bankrupt. I'd bet the same for AM radio companies in the 1920s. When new technologies create attractive business opportunities, there frequently is an initial overinvestment. The billions pouring into AI far exceeds what went into .COM, and much of it will return pennies. The investors who win are the ones who can pick the B&Os, RCAs and GOOGs out of the flock before everyone else.[0]

[0] "Planning and construction of railroads in the United States progressed rapidly and haphazardly, without direction or supervision from the states that granted charters to construct them. Before 1840 most surveys were made for short passenger lines which proved to be financially unprofitable. Because steam-powered railroads had stiff competition from canal companies, many partially completed lines were abandoned."

-- https://www.loc.gov/collections/railroad-maps-1828-to-1900/a...

> Indeed, but a lot of railroad startups went out of business because their capital investments far exceeded the revenue growth and they went bankrupt

That was similar to what happened during the dotcom bubble.

The difference this time, is that most of the funding comes from companies with huge profit margins. As long as the leadership in Alphabet, Meta, Microsoft and Amazon (not to mention Elon) believes that AI is coming soon, there will be funding.

Obviously, most startups will fail. But even if 19 fail and 1 succeed, if you invest in all, you're likely to make money.

I do worry that unless some of these LLMs actually find a revenue model soon, the self reinforcing bubble is going to pop broadly.

GPUs, servers, datacenters, fabs, power generation/transmission, copper/steel/concrete..

All to train models in an arms race because someone somewhere is going to figure out how to monetize and no one wants to miss the boat.

If the bubble pops, would that bring the price for at least part of that hardware down and thus enable a second round of players (who were locked out from the race now) to experiment a little bit more and perhaps find something that works better?

Maybe?

My outsider observation is that we have a decent number of players roughly tied at trying to produce a better model. OpenAI, Anthropic, Mistral, Stability AI, Google, Meta, xAI, A12, Amazon, IBM, Nvidia, Alibaba, Databricks, some universities, a few internal proprietary models (Bloomberg, etc) .. and a bunch of smaller/lesser players I am forgetting.

To me, the actual challenge seems to be figuring out monetizing.

Not sure the 15th, 20th, 30th LLM model from lesser capitalized players is going to be as impactful.

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