What happens when the AI bubble pops?

thehustle.co

25 points·paulpauper··6 comments

There is no so-called bubble in artificial intelligence, but there is a huge bubble in LLMs.

> It took the S&P 500 years to come back from the dot-com bust in 2002

Had to read the sentence thrice.

same as when the dot com bubble popped

not quite the same. Some of those survived, the llm model is unprofitable at its core. There will be no survivors.

Building new massive models might not be cost efficient for a while, but the more valuable thing is the infrastructure change that is more permanent. The dot coms died but the cross country fiber that was laid down persisted and the internet was baked in. The good thing about new tech bubbles is the infrastructure that gets pulled forward to support it.

Same with data centers and current SOTA models. If the music stops, we have tilled some fertile ground that will be utilized by those that come after. Inference costs will fall through the floor if those data centers aren't being fully utilized, same with RAM prices.

Think of what came after the dot com crash: Facebook and YouTube. Neither could exist until internet usage and bandwidth reached a tipping point that came after all the hype.

The dot com bubble was mostly bubble-wrapped (heh) from the larger economy.

This bubble runs much deeper, in its finances.

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