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Comment by sempron64 | Hacker News Reader

It's ridiculous to call this tulips, in the sense of a speculative asset whose price depends on resale. A more similar recent example is the dotcom boom and bust based on building internet infrastructure, or the 2008 crash which was based on cyclical infrastructure overinvestment. These crashes were characterized by demand growth not keeping up with investment because the target markets were tapped out. Not clear when we'll get there with AI. The consumer market seems saturated on chatbots but we're not even close to saturated for b2b or self driving for example. And this discounts other new technological offerings which may unlock larger consumer markets (products where people are willing to pay $100 a month instead of 10 or 20)

All that said the dotcom boom is extremely analogous and that crash was quite bad.

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dotcom was maybe 100B a year focused on the US and mostly VCs. AI is perhaps 250B global VC (with more than half of ALL VCs concentrated in one sector) and another 800B+ from non-VC. These numbers are basically a guess but structurally we are set up for something much, much worse.

But unlike the dot com boom, demand for tokens has not let up and there is increasing demand. I don’t know where it falls, certainly companies don’t get or right and they either over or under build. With the current demand rate changes it’s hard to understand why you would stop building today.

Yeah, this is the difference.

2000's tech bubble was caused among other things over-investment to infrastructure and technology that had no users yet.

Totally different setup.

Does not mean AI boom will not turn to bust, but weak analogues generally don't help with understanding complex systems.

Demands for tokens exists yes. On one side you have huge demand for the infinitely subsidized tokens so that people can post a "unique" illustration when posting on social media, along with the text itself even.

On the other end we have professionals happy to pay a subscription for heavier use, to build something in the hope to sell it.

I figured I don't believe in value when my dad explained to me his mate fired his team once he realised he could just pay 20 bucks for his Gemini account and run his business. I asked, do you call this value add? He said it must be, since he can produce the same output with no staff.

There is a confusion between profiting from a circumstance and value creation.

You create value if, say, you cure a disease. That it takes you an army of staff or extract maximum profit from it is just a feasibility formula.

That you make the cure more affordable is value creation.

That you cure the same disease but increase your profit doesn't create any value, except to yourself, for a while

> I figured I don't believe in value

Maybe you don't, but it's fairly obvious that a lot of things are changing and things are moving.

Maybe your dad's mate didn't have to expand on his business, good for him. Other business are expanding because they now can.

Will the positive overweigh the negative? Not necessarily, but to go "it's tulip" is the kind of argument so devoid of nuance that we shouldn't be discussing so on HN.

The overwhelming demand for token would not coming from people wanting a unique illustration - it would be from professional usage. In fact, I'm not even sure who is subsidized. The $20 subscription surely isn't being used fully across all members of that subscription.

^^^^^

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