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Comment by nabla9 | Hacker News Reader

Google, Meta, Microsoft, and Amazon will get through easily. They don't have excessive debt. They can afford to lose their investments into AI. Their valuations will take a hit. Nvidia will lose revenue and profits, stock will go down by 60% or more, but it will also survive.

Oracle will likely fail. It funded its AI pivot with debt. The Debt-to-Revenue ratio is 1.77, the Debt-to-Equity ratio D/E is 520, and it has a free cash flow problem.

OpenAI, Anthropic, and others will be bought for cents on the dollar.

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>Debt-to-Equity ratio D/E is 520

It's actually 520% or 5.2 - still high but 520 would be crazy.

> Google, Meta, Microsoft, and Amazon will get through easily. They don't have excessive debt. They can afford to lose their investments into AI.

Survive, yes. I don't think anybody ever questioned this.

I wonder if they will be able to remain as "growth stocks", however. These companies are allergic to be seen as nature companies, with more modest growth profiles, share profits, etc.

> OpenAI, Anthropic, and others will be bought for cents on the dollar.

And just like 23andme, so will all that data be sold for dimes.

If it's just like 23andme, that sale would be to Sam Altman.

You will be able to rent a whole Meta datacenter with thousands of NVIDIA B200 for $5/hour. AWS will become unprofitable due to abundance of capacity...

That's sounds nice. I can run FLUX or SDXL on all those NVIDIAs and fill the Internet with porn.

> fill the Internet with porn....

I have got news for you...

Google, Meta, Microsoft and Amazon might get through easily as companies. I don't think all G/M/M/A staff will get through easily.

Microsoft is in a pickle. They put AI lipstick on top of decades of unfixed tech debt and their relationship with their userbase isn't great. Their engineering culture is clearly not healthy. For their size and financial resources, their position in the market right now is very delicate.

I don't think so.

They are one of the few companies actually making money with AI as they have intelligently leveraged the position of Office 365 in companies to sell Copilot. Their AI investment plans are, well, plans which could be scaled down easily. Worst case scenario for them is their investment in OpenAI becoming worthless.

It would hurt but is hardly life threatening. Their revenue driver is clearly their position at the heart of entreprise IT and they are pretty much untouchable here.

> Worst case scenario for them is their investment in OpenAI becoming worthless.

And even then, if that happens when the bubble pops, they'll likely just acquire OpenAI on the cheap. Thanks to the current agreement, it already runs on Azure, they already have access to OpenAI's IP, and Microsoft has already developed all their Copilots on top of it. It would be near-zero cost for Microsoft at that point to just absorb them and continue on as they are today.

Microsoft isn't going anywhere, for better or for worse.

Despite them pissing off users with Windows, what HN forgets, is they aren't Microsoft's customer. The individual user/consumer never was. We may not want what MS is selling, but their enterprise customers definitely do.

I think that's the impression you get if you focus on Microsoft as a OS vendor. It's not that anymore, that's why their OS sucks for many years now. Their main business is b2b, cloud services, and azure. I think they are pretty safe from OpenAI. Plus they have invested big in OpenAI as well.

Windows is hard to replace in large organizations. Is there actually any real AI competitors in the stack? Well Google, maybe. The whole Windows+Office+AD+Exchange and now Azure stack is unlikely to go any time soon. However badly they screw it up.

True. Basically any medium to large scale business is reliant on Windows/Office/AD. While there are open source alternatives to Windows/Office, I can't think of a good open source alternative to AD/Group Policy/etc

M365 is arguably far worse than office97. Drive/sharepoint is confusing and team is especially broken.

Azure is a product all right, but there’s nothing particularly better there than anywhere else.

SharePoint has been a dog’s breakfast since forever.

M365 is inarguably worse than Office 97

I disagree. They're the one place that can get away without investing in frontier model research and still win in the enterprise.

Google is only place that serves the enterprise (Workspace for productivity, Cloud for IT, Devices for end users) AND conducts meaningful AI research.

AWS doesn't (they can sell cloud effectively, but don't have any meaningful in-house AI R&D), Meta doesn't (they don't cover enterprise and, frankly, nobody trusts Zuck... and they're flaky.

Oracle doesn't. They have grown their cloud business rapidly by 1) easy button for Oracle on-prem to move to OCI, and 2) acting like a big colo for bare metal "cloud" infra. No AI.

Open AI has fundamental research and is starting to have products, but it's still niche. Same as Anthropic. They're not in the same ball game as the others, and they're going to continue to pay billions to the hyperscalers annually for infra, too.

This is Google's game to lose, imho, but the biggest loser will be AWS (not Azure/Microsoft).

I agree that AWS/Amazon seems to be uniquely badly positioned to benefit at all from AI, while also being potentially screwed by AI companies failing.

I cry for Elon, that precious jewel of a human being.

Tesla (P/E: 273, PEG: 16.3) the car maker without robots, robotaxis is less than 15% of the Tesla valuation at best. When the AI hype dies, selloff starts and negative sentiment hits, we have below $200B market cap company.

It will hurt Elon mentally. He will need a hug.

Never bet against TSLA. Elon will just start selling tickets Mars colony.

He's gonna need a lot of ketamine in the aftermath that's for sure.

Then show us your puts, mr buffet

lol - yea…

Buffett isn't a put buyer but did well investing in Tesla's rival BYD.

The fanboys obsessively buy any dip. It should have been back at a $200billion market cap countless times but it never gets there.

  OpenAI, Anthropic, and others will be bought for cents on the dollar.

OpenAI is existential threat to all big tech including Meta, Google, Microsoft, Apple. Hence, they're all spending lavishly right now to not get left behind.

Meta --> GenAI Content creation can disrupt Instagram. ChatGPT likely has more data on a person than Instagram does by now for ads. 800 million daily active users for ChatGPT already.

Google --> Cash cow search is under threat from ChatGPT.

Microsoft --> Productivity/work is fundamentally changed with GenAI.

Apple --> OpenAI can make a device that runs ChatGPT as the OS instead of relying on iOS.

I'm betting that OpenAI will emerge bigger than current big tech in ~5 years or less.

OpenAI has no technical moat (others can do what they do), generate content, all have the same data.

OpenAI does not expect to be cash-flow positive until 2029. When no new capital comes in, it can't continue.

OpenAI can's survive any kind of price competition.

They consistently have the best or second best models.

They have infrastructure that serves 800 million monthly active users.

Investors are lining up to give them money. When they IPO, they'll easily be worth over $1 trillion.

There's price competition right now. They're still surviving. If there is price competition, they're the most likely to survive.

> Investors are lining up to give them money. When they IPO, they'll easily be worth over $1 trillion.

Your premise is that there is no bubble. We are talking about what happens when bubble bursts. Without investor money drying out there is no bubble.

I think we are in 1995 of the dotcom bubble for AI.

Clearly, a lot of people here disagree with you. Doesn't mean you cannot be right, but in general, the HN crowd is a pretty good predictor of the trends in the tech industry.

The mass is usually wrong on predicting these kinds of events. I don't see why HN is any different than Reddit group think.

Nobody was predicting for the dotcom or the financial crisis bubbles. The fact that everyone and their grandma is calling this a bubble makes me think that it simply can’t be.

Bitcoin is going to be the next universal payment system anytime now...

Weird example to trot out as a bubble when at any point in its history, if you held for a few years or so you’d be pretty far ahead on your investment. It clearly shows people are awful at calling out bubbles.

More like 1998

I asked a few weeks ago if we are at the Pets.com stage of the bubble yet.

What if investors stop giving them money before they IPO?

They have <a really expensive> infrastructure that serves 800 million monthly active <but non-paying> users.

Even worse, they train their model(s) on the interactions of those non-paying customers, what makes the model(s) less useful for paying customers. It's kind of a "you can not charge for a Porsche if you only satisfy the needs of a typical Dacia owner".

  They have <a really expensive> infrastructure that serves 800 million monthly active <but non-paying> users.

I don't pay Meta any money too. Yet, Meta is one of the most profitable companies in the world.

I give more of my data to OpenAI than to Meta. ChatGPT knows so much about me. Don't you think they can easily monetize their 800 million (close to 1 billion by now) users?

Meta has the giant advantage that other people interact with your data. I think that is widely more valuable than what chat engines have.

Given that OpenAI has publicly stated that they're working on monetizing free users (ads), I think they can make ads targeting as good as Meta can.

This is why Meta is all in on AI by the way. With nearly 1 billion users, ChatGPT is a huge threat to Meta's ad empire.

>With nearly 1 billion users, ChatGPT is a huge threat to Meta's ad empire.

People are on Facebook to interact with other human beings, not LLMs. People won't leave Facebook to use ChatGPT.

https://openai.com/index/group-chats-in-chatgpt/

Creeping. ChatGPT is becoming more than just a "talk with an LLM" app.

> Don't you think they can easily monetize their 800 million [...] users?

I am pretty sure they will be able to monetize it. But there is a big difference between "generating revenue" and "generating profit". It's way cheaper to put ads between posts of your friends (like FB started out with ads) then putting ads next to the response of an LLM. Because LLM responses has to be unique, while a holiday photo of yours might be interesting for all of your friends, and LLM inference is quite expensive, while hosting holiday photos is cheap. IMHO this is the reason why the 5th generation of ChatGPT models try to answer all possible questions of the world in one single response, kinda hoping that I am going to be happy with it an just close the chat.

> They consistently have the best or second best models.

This is the problem with your original argument. It assumes that having a "good model" (e.g. one that performs well on some benchmarks) has somehow to do with something in the real world. It doesn't. If you can show that it does, your thesis might have at least a glimmer of credibility.

The idea that a chatbot will somehow displace an operating system is the kind of absurdity that follows from making this error.

> Apple --> OpenAI can make a device that runs ChatGPT as the OS instead of relying on iOS.

Yeah... No they can't. I don't agree with any of your "disruptions," but this one is just comically incorrect. There was a post on HN somewhat recently that was a simulated computer using LLMs, and it was unusable.

I find myself doing more and more inside ChatGPT. When ChatGPT inevitably can generate GUIs on the fly, book me an uber, etc. I don't see why iOS wouldn't have competition.

Not to mention you would need an order of magnitude improvement in on-device inference speed to make this feasible at current smartphone costs. Or they could offload it and sell an insecure overpriced-subscription laggy texting device that bricks when you don’t have cell service…

It isn't going to happen soon. Maybe 4-6 years from now.

But it is clearly the direction. Apple will try to stave off this move by turning iOS more into an LLM as well.

I think it should be obvious just from thinking about how much more an OS is beyond the UI for launching programs.

I’ll HAPPILY bet that it won’t. $10,000 to a charity of each other’s choosing?

>Apple --> OpenAI can make a device that runs ChatGPT as the OS instead of relying on iOS.

Ah yes, PromptOS will go down in the history books for sure.

> I'm betting that OpenAI will emerge bigger than current big tech in ~5 years or less.

I seriously doubt it. If this bubble pops, the best OpenAI can hope for is they just get absorbed into Microsoft.

> Apple --> OpenAI can make a device that runs ChatGPT as the OS instead of relying on iOS.

Or, instead of spending billions training models that are nearly all the same, they instead take advantage of all the datacenter full of GPUs, and AI companies frantically trying to make a profit, many most likely crashing and burning in the process, to pay relative pennies to use the top, nearly commoditized, model of the month?

Then, maybe someday, starting late and taking advantage of the latest research/training methods that shave off years of training time, save billions on a foundation model of their own?

I don't think it makes sense for Apple to be an AI company. It makes sense for them to use AI, but I don't see why everyone needs to have their own model, right now, during all the churn. It's nearly already commodity. In house doesn't make sense to me.

OpenAI has yet to make a single, solitary thing that works well. It's nothing but Sam Altman hyping things. They aren't an existential threat to anyone.

ChatGPT 3 and 4 were impressive and kind of kicked off the current AI boom/bubble. Since then though, Altman changing the non-profit OpenAI into a kind of for profit Closed AI seems to have led to a lot of talent leaving.

No, LLMs are an existential threat. OpenAI is a heavily leveraged prop-model company selling inference, which often has a model a few months ahead of its competitors.

AI isn’t bullshit, but selling access to a proprietary model has certainly not been proven as a business model yet.

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