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100% agree on this. It’s 1995 all over again. AI is as big (or bigger) as the Internet back then. Hype to totally insane levels but eventually all things that go up must come down.

In the meantime, the usual suspects are gonna make a whole lotta money.

The internet ended up just as big as predicted in 1995 (or bigger) - it just took a bit longer. What do we not have online today that was predicted in 1995?

Timeline is important in a world where AI is under VC capital drip IVs.

Now that depends, doesn't it?

I think discussions about AI hype miss a critical factor: there are two groups of people getting swept up in hype. One are the Investors[0]. The other are the Beneficiaries of the technology[1]. AI is over-hyped for the former, but not for the latter.

If AI hype is anything like dotcom boom - or like telecom, or building up railways in the US - well, it sucks for the Investors. For them, the hype is getting dangerous - if it's a bubble and it bursts, plenty of them will lose money, and many companies will fold.

But I'm not in that group, so I don't care.

For me, one of the Beneficiaries, the hype seems totally warranted. The capability is there, the possibilities are enormous, pace of advancement is staggering, and achieving them is realistic. If it takes a few years longer than the Investor group thinks - that's fine with us; it's only a problem for them.

--

[0] - In a broad sense, to include both people funding it and people making big investments around the expectations - whether regular investments, or company strategy, or career plans.

[1] - People using it for work and personally, researchers, etc.; also people with defined hopes for the technology; also ultimately everyone who benefits from it when it matures (and possibly builds on top of it).

Good explanation. Thanks.

> If it takes a few years longer than the Investor group thinks - that's fine with us; it's only a problem for them.

It is also for the beneficiaries because price comes into the equation and the longer it takes, the more expensive it will be.

We are currently paying the early-Uber prices at the moment but it's likely not sustainable (or not enough) and we'll see price hikes as soon as vendor lockin is sufficiently set in.

Assuming there remains more than one vendor, where the lock-in? I use Claude 4 via an IDE plug-in and both Claude and the plug-in (and the IDE!) are replaceable.

> It is also for the beneficiaries because price comes into the equation and the longer it takes, the more expensive it will be.

> We are currently paying the early-Uber prices at the moment but it's likely not sustainable (or not enough) and we'll see price hikes as soon as vendor locking is sufficiently set in.

Not so, there are many open-weights models close to the Pareto frontier* just waiting for cheaper RAM. Low-end models I can already run on my laptop.

We only get lock-in if some vendor manages to create an architecture which is both significantly better and secret. Secret not merely against employees moving around and sharing ideas or anonymously leaking things — the labs are known to use AI as part of the model development, while the models themselves are already observed to attempt to leak their own weights in various circumstances.

* https://en.wikipedia.org/wiki/Pareto_front

Prices early on matter mostly to the Investors. Benefactors will just wait until the price is right - it's not like they invested themselves into the new thing and are now in a hurry.

I do see the argument, though: delays and resulting prices are in a positive feedback loop. But that's a problem for Benefactors only when it makes the new thing stay economically unviable indefinitely. Otherwise, market will find a way (and hype helps!).

EDIT:

Vendor lock-in is always annoying to Benefactors, but I wouldn't worry too much now. GenAI is not Uber - it actually is sustainable at the current and future quality level. Even as major AI services are subsidized with investor money to some extent (I don't have current numbers on that), it's just the usual, boring case of throwing money at a thing to accelerate its growth, to capture more market than competitors.

Uber's case is special in that the business is fundamentally unsustainable, so it actually amounts to market destruction - burning stupid amounts of investor money let them break into existing markets and gut all local incumbents, but as that money runs out, both passengers and drivers see costs skyrocket while quality of service sinks rapidly sinks, and there is no going back - incumbents all died out or transformed into Uber-like thing, which destroyed the structural efficiencies in the market that built up over decades.

As Benefactors of technological advancement, all we got from Uber was the ability to order a taxi with an app. Doesn't feel like it was worth it.

But GenAI is not Uber.

You're not a beneficiary from AI.

IPv6 :P

It is insane. You should see my inbox, daily links to AI articles, sales execs panicking about falling behind. Honestly, it’s understandable with all the noise, but it’s also hard to keep up.

I’ve lost count of how many times I’ve had to explain, again and again “No, AI can’t do that… and no, it’s definitely not drawing up your architectural building plans.” Well, not yet, anyway.

>financial viability, not just hype or innovation, is what ultimately determines whether this all collapses or truly transforms the world.

That is some of the best wisdom on HN. Beating your competition's AI model at whatever goalposts you think is important means nothing until you have positive cash flow. All hype must encounter reality and survive to not only make a sale, but then go and do it very consistently.

I agree that financial viability is critical to the long-term prospects of a technology. It must deliver an ROI above other options. I'd recommend getting off the sidelines and jumping in to see what's happening. At the least, you'll have another perspective to inform your position. It's a pretty minimal investment to try it out.

You’re right to think that I probably do sound more like a cautious observer than I actually am. For what it’s worth, I’ve been experimenting with AI tools on the side (mostly in coding and writing workflows), and I’m planning to dive deeper soon, especially around integrating agents into my SaaS.

The post was more about the hype and attention surrounding AI, which can feel mentally exhausting at times, mostly because of how fast everything is moving. Not a complaint, really. If anything, that might be a good sign. I totally get why people are excited, it just takes effort to stay grounded in the middle of it all.

Appreciate the comment! Hopefully next time I’ll be jumping in with war stories instead of sideline takes.

The latest trend I've seen is blabber about AI super intelligence which will either kill us or lead to absolute utopia by 2030.

In the mean time, I try to enjoy the freely available LLMs for quick summaries on technical topics before the inevitable enshittification ruins them forever.

I think of it like Uber in the early days, when it was subsidizing rides to try to gain market share while ignoring taxi and labor laws until it could pay to change them. Uber's original plan was to bleed money until it could replace human drivers with robots, but that didn't work out.

The current AI companies are burning money with an exit strategy of replacing office workers with robots. If/when that doesn't happen, they'll have to jack up prices and figure out another business model. Uber had the two-sided market and network effects for a true enshittification play -- riders and drivers are both trapped -- but LLM companies haven't figured that part out yet. Do they go for ads once they have enough users and brand recognition? Hoard GPUs and training data (maybe through licensing deals) to create a moat?

Anyways, it's fun while it lasts.

Eh... I honestly can't even pretend to see that far in the future.

What I will say is that AI will either fundamentally transform the economy for all of humanity, or it will fizzle out. I really don't see any in-between.

> just how loud the expectations around AI have become, especially among non-technical folks.

This. It's bordering on mass madness. I am taking 2-4 calls a week from "two guys from ..." with mad ideas and unrealistic expectations of what it takes to build and maintain an AI product. I've seen it with early internet rush, Web 2.0, and crypto before.

Like that déjà vu scene in The Matrix, except instead of a black cat, it’s AI pitch decks with wild ideas. Appreciate the sanity check!

I lived through the dotcom boom too. It's a poor point of comparison, because as thrilling as the moment was, there weren't any techs then that could think or reason. And right now are we at the furthest point in its development? From the extreme pace of improvements it looks more like its infancy.

Yeah, I totally agree, we’re still at the beginning, and that’s what makes it a little scary

My dotcom comparison wasn’t really about the tech, more about the noise and hype. Feels like that same kind of frenzy, but now the tech’s actually capable of doing something big. The financial viability is still a big question though. Thanks for the comment.

Any S-curve looks like an exponential until it doesn’t. It’s impossible to make predictions like that. It’s in its infancy in terms of adoption all right.

> there weren't any techs then that could think or reason

and that hasn't changed

> there weren't any tech then that could think or reason

The fact that we have people on HN (of all places) who are convinced that now we do have this sort of tech when it's simply not true, is really sad.

Posted this downthread, but it's also a reply to your points:

https://news.ycombinator.com/item?id=44208831

TL;DR: there are two groups of people mixed up in the hype: the people investing in it, and people using it. AI may indeed be overhyped for the former. It's not overhyped for the latter.

Makes me think of how railways were built across the US. AFAIK, the first generation of investors generally lost big. They funded a huge, capital-expensive infrastructure project, and didn't get a return on it in time. But even as they lost, the work they funded remained - subsequent waves of businesses built on top of it and became profitable, the society benefited, and the country was transformed. The only losers to this "bubble" were the first-movers and their backers.

So when someone wonders if AI is overhyped, I'd ask them: what's your stake in this? Are you an investor hoping for quick returns, or are you someone who stands to benefit from the technology existing?

Totally agree that the tech can still be transformative even if investors lose money. The question for me is if it stops being financially viable, what keeps driving it forward?

Hope.

And when that fails, cycles of nationalisation until the hope returns. Just like railways.

Seems we have a plan with a track (sorry) record on success.

Just don't do the reverse - privatization seems to be lethal to hope just as much as it is to infrastructure operations and maintenance. Just like railways.

I can only hope AI somehow kills the smartphone.