Currently, investment into AI exceeds the dot-com bubble by a factor of 17. Even in the dot-com era, the early internet was already changing media and commerce in fundamental ways. November is the three-year anniversary of ChatGPT. How much economic value are they actually creating? How many people are purchasing AI-generated goods? How much are people paying for AI-provided services? The value created here would have to exceed what the internet was generating in 2000 by a factor of 17 (which seems excessive to me) to even reach parity with the dot-com bubble.
"But think where it'll be in 5 years"—sure, and let's extrapolate that based on where it is now compared to where it was 3 years ago. New models present diminishing returns. 3.5 was groudbreaking; 4 was a big step forward; 5 is incremental. I won't deny that LLMs are useful, and they are certainly much more productized now than they were 3 years ago. But the magnitude of our collective investment in AI requires that a huge watershed moment be just around the corner, and that makes no sense. The watershed moment was 3 years ago. The first LLMs created a huge amount of potential. Now we're realizing those gains, and we're seeing some real value, but things are also tapering off.
Surely we will have another big breakthrough some day—a further era of AI which brings us closer to something like AGI—but there's just no reason to assume AGI will crop up in 2027, and nothing less that that can produce the ROI that such enormous valuations will eventually, inexorably, demand.