Hm I appreciate it but a genuine question:

It seems that we aren't agreeing on if the market is in a somewhat bubble or not.

You say that real usage is undeniable. But to me its undeniable because its being spoon fed to you for free for SOTA models from all fronts including open source chinese models.

They are running at a loss because they are having these insane growth cycles but they have no moat to a somewhat degree.

Tell me how OPENAI or any AI company plans to be profitable and actually return great profits on what the investment is.

The thing is, that they have to constantly train and retrain the models to reach SOTA and people are realizing that they are being benchmaxxed.

Open source models are coming to a somewhat close degree and I doubt that it would be thaaat noticable for most consumers y'know?

There is no moat. Sure, maybe there is some moat in coding as I feel like that is the only thing that wasn't touched by Open source models.

Open source has sort of SOTA image models, SOTA-ish video models and what not & so anybody can try to compete with these on things like open router which is where half the api uses become because of how convoluted other apis are and how openrouter just sorta works...

I can provide you sources as well but there is a long consensus that AI doesn't really help in research thaat much.

The point is, that sure there is this great tech but its just unprofitable at the scale if you consider providing free access to the masses too.

Tell me how these companies are gonna make a consistent profit on AI without being crunched by each other's SOTA benchmaxxing and kill throat competition from China's open source models.

I genuinely wonder what "real world AI" to you is & how its turning up at a profit.

Like, okay, maybe I can agree that sure maybe inference could be made profitable if done to somewhat degree like how deepseek did but there is no way that it was worth the return in investment...

And do you know what happened? Nvidia selling the shovels, "infrastructure" got to be the most valuable company. If this isn't a bubble then why did Nvidia lose so many billions of $'s just because China released deepseek model.

Sure nvidia has regrown but are you really not going to take the past into account?

Regarding past performance quote, I think that I had also agreed in my original quote but I had mentioned past performance of something like 100 years. Computer stocks have been less time than that and this AI hype is quite new.

These companies like google etc. are integrating everything AI not because they want to but because their stock rises up when they mention AI for the most part.

I will repeat this again, my friend, but if you can tell me how the average investor is investing into a business which is going to make a profit...

How are they going to make a profit given the amount that they have invested in with degrees of no moat, it seems that entreprise is the most clear moat they have but https://www.forbes.com/sites/jaimecatmull/2025/08/22/mit-say...

Coding models might be the most profitable imo given that people want absolute best in it and they don't mind paying the price (claude code) but that is a niche of niche and that alone can't justify the amount of investment and stock prices made I suppose, not unless you believe in some sort of AGI.

How are these companies going to make a profit dude, the only way they have been for now is by their stock prices but I know that you know that it isn't sustainable, thus it becomes a sort of bubble situation.

I am an average investor, yet I am cautious of the times here, because I believe that AI just kinda came out of no where and became a mainstream word and VC's were funding things like devin which was literal BS LMAO but the amount of fear mongering there was, was crazy. So like, there was a fomo of more VC's which invested in more AI's which then made people jump into the trend to then have a scene where anything labelled with AI gets stock price to

Am I false in the above statement?

How is this not a bubble? The tech is cool but people aren't paying in stock markets to support a tech or smth, they want returns now... And once those returns stop coming in the sense that people realize this... Oops, looks like nobody want those Ai stocks anymore.

I have read the intelligent investor to a somewhat degree to then pick up on John bogle's index fund related book to realize that benjamin graham, the creator of intelligent investor would've also preferred index funds and thus my whole sentiment shifted towards realizing diversification and to maybe preventing bubbles I suppose.

Honestly, so funny because your statements could be shown in history as what people believed before the bubble burst and it would still be accurate and mine tbh can also be taken in that intepretation from the other way...

I hope you are still interested as I still love this discussion!

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rapsey 2 days ago | parent [-]

You are conflating OpenAI, xAI, Anthropic with the entire field of AI. They are spending billions of private money with the goal of actual general AI. Maybe they will reach it, maybe they wont. They are doing a moonshot and pushing the field forward and they have the money to do it.

But that is an entirely different game compared to what AI is being used for now. Two random examples I came across:

https://x.com/LinusEkenstam/status/1965014479760204118

https://abelpolice.com/

https://longevity.technology/news/new-ai-tool-demonstrates-p...

This is AI as it is capable now, solving real life problems and making industries more efficient. This is happening throughout practically every field of human endeavor, which is why ChatGPT is used so much. Medicine, biomedicine, law, translations, coding, investing, learning and so on.

nVidia is the most valuable company in the world right now, because they are powering practically all of it.

Worrying about profits right now is an entirely wrong thing to concentrate on. Analogous to the previous investment cycle: Youtube is one of the most valuable pieces of the tech industry. It was a money loser for a damn long time and would have gone broke if google had not bought them, not to mention being sued out of existence (a real threat in the early days). When it was made in 2006 it was a bet everyone thought was insane, because of the infrastructure costs and legal risks. Right now it is very profitable, because they had time to optimize and develop their business model.

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Imustaskforhelp 2 days ago | parent [-]

Exactly my point. I agree with your statement tbh Really great that we can reach to a conclusion but

Here's the thing though:

Youtube has a moat. It is a social media and the networking effect runs wild on it and tbh there were a lot of other things too like (vines?) which fall.

But, can you say the same for Ai given open models?

China couldn't create an alternative to social media (in some sense?) because it requires a network effect.

But it sure can use gpu's, maybe even build their in house gpus so that they can then train on the data just as how america did and effectively price dump with no restrictions :/

Honestly, I can agree if you believe that AI Has a moat similar to social media, then sure, but I just don't believe it has a moat.

Youtube turned profit because of moat, Is there any moat in LLM's?

And if we are talking general purpose robotics/ automation, then I agree that yes its good.

But for an average investor whose investing, they are investing thinking that its sort of inevitable actual general AI when that's not the case.

From what I know, the optimizations of LLM's don't really apply to robotics, so all this funding of billions going into LLM only to pivot into robotics is a bit :/ for the investors.

IMO When I mentioned S&P AI stocks, that's exactly things like Google,microsoft,amazon which are still similar to OpenAi and anthropic, don't you think?

S&P's growth is heavily based on the calculated return that Google,microsoft,amazon are gonna be the winners of the Ai "wars", that's what I meant!!

If google says a line similar to yours that LLM's aren't the future, then you can naturally expect how the market would react.

The funny thing is, is that between your comment, I got recommended a video about AI bubble... which is accused in comments to be created by AI

https://www.youtube.com/watch?v=37aUuoRyMhM

The tech is cool but 95% are focused on the wrong thing or smth and there is no advantage/moat and uh its still literally something like. bubble. Even in a bubble, google/amazon survived.

You can say that I should still invest because stock prices grew even after bubble bust, but they were in a deep awakening, and I feel like as an average investor I'd rather prefer some more stability knowing that there is still a condition of a bubble formation in S&P and US tech stocks atleast

These companies are using AI as a magic word. Vercel's keynote had AI esque words 42 times... LET ME REPEAT, 42 times. Vercel isn't even that AI based lol, its a react next app thingy for most people.

Still hoping you can comment! I was thinking of creating a hackernews post about involving other people in this discussion since at the day our discussion boils down to: is this a bubble?

I thought that it was common knowledge to everybody but maybe not, I can create a ASK HN: Do you think that S&P 500 / Magnificient 7 is an AI bubble right now? or smth!

Looking forward to your feedback and I had a blast in this conversation! Wish to discuss more lol!! Have a nice day, (waiting for your comment)

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rapsey a day ago | parent [-]

> From what I know, the optimizations of LLM's don't really apply to robotics, so all this funding of billions going into LLM only to pivot into robotics is a bit :/ for the investors.

AI wave is more than just LLMs. Movement autonomy for cars/robots, image/video generation, protein folding, etc. Those are not LLM based AI applications. They are all downstream from the transformer architecture. Autonomy AI development is the missing piece of robotics, which is why so many billions are being invested now.

The lack of moat regarding LLMs is a problem only to those playing in that field, but their actual goals are not just running LLMs, they are like I said aiming for actual general intelligence.

In the mean time, companies are training or optimizing their own models for their use cases, like the ones I listed in the previous reply. They do have a moat, because they require specialized knowledge to play in that field. Even the abel police guys, their competitors were just an interface to ChatGPT and it worked abysmally.

> IMO When I mentioned S&P AI stocks, that's exactly things like Google,microsoft,amazon which are still similar to OpenAi and anthropic, don't you think?

Absolutely not. OpenAI is a private company spending insane billions for a moonshot project. The public S&P500 companies are investing their insane profits and making a return on those investments. Their infrastructure and scale is a moat.

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Imustaskforhelp a day ago | parent [-]

I had written a original draft of an reply but this conversation is getting really interesting and wanted to write it again lol.

I agree with all the aspects of protein folding / general purpose automation due to "AI" and not LLMs but that was happening before the "AI" hype thanks to OpenAI / chatgpt where so much money was flowing into it...

And I have no issues with them if their prices were baked into realism that they were baked into pre 2022's / whenever chatgpt got launched

My biggest issue which is the crust of this discussion might be that I believe that tech stock prices are roaring so high mostly because of the AI hype that they bring which raises their prices.

Oracle made larry Ellison the richest person for some time due to the stargate project / due to their deal with OpenAI / then larry invested into openai for some hundred billion $ which openai paid back to oracle and oracle's stock price increased more... rinse and repeat?

The thing is, why is oracle which I think is S&P company raising because of their deals in LLM's at an unastronomical rate/ unprecedented rates.

Google/meta/microsoft/amazon are also all integrating AI into their every project / mentiniong AI as much as possible which lets be honest again, is mostly LLM's for the most part.

Yes I know, google has some really interesting non LLM AI projects which I know and love but they were pre 2022 and google's price wasn't as much dictated by those projects as they are doing now y'know?

My conclusion is that A lot of people can't / couldn't invest into OpenAI / thus flowed their money into anything LLM / AI related in the markets... & the companies are loving this and mentioning AI as much as possible

Can we agree on this or not?

I can agree if you think that these companies are investing into infrastructure but that infrastucture is now mostly GPU's which are only really useful for LLM related tasks and becomes redundant for general purpose stuff like running servers for the most part.

Do we agree on this or not?

Also regarding infrastructure, The thing is, That most of them are just packing Nvidia Gpu's which is something that Nvidia also offers and others could do too but yeah, I can get that part but is it an "investment" is questionable...

Its an investment only if LLM's turn out to be profitable.

Firstly the cut throat competition means that literally everyone is competing in it so it cuts each other profits.

Secondly, there are some recent models which are kinda small and could run to a somewhat degree on modern hardware if need be which could satisfy some users needs without having to need that infrastucture

Then again, even if there are some people that might not have that and they search on things like chatgpt. They do it out of freebies that its not gonna cost them that much. And they can switch out if those AI providers do charge them first... with open source models while they themselves ride this end of AI hype.

If you believe that AGI is near, whatever that means, then literally everything I said gets out of the equation but I am assuming you aren't believing that.

Now sure there are gonna be returns but they aren't gonna be nearly as expected. In fact I think that most S&P companies are gonna be in a loss with all of these training of models / building infrastructure. Also, training of models is a recurring cost for the most part if they have to stay SOTA iirc with higher developer's cost working in AI/ML (100 million$ income is provided by the people investing into S&P dude)

So with all of these things, I believe that there is a legitimate concern that the investment isn't worth the return.

Then why are companies investing?

Because of fomo. When the AI hype started thanks to chatgpt. every private equity rushed for similars and that kinda leaked into S&P companies which are doing the same thing with AI hype mentioning it so much.

Do you agree?

If you can agree with all 3 of these statements to a reasonable degree, then I believe that we can agree that we are in an agreement and that it isn't much of an investment as its a way to somehow increase their stock prices by essentially mentioning the word AI and that's all that matters to them in the end, but its all on a proposition that someone is gonna buy the stocks thinking that its gonna go up and so on and so on.. when fundamentally the business model is kinda messed up when you think about it y'know? This is a bubble to me in my definition of it when people are investing into things without caring about things for the most part / logically I suppose...

If we have any disagreements, do let me know so that I can maybe lighten up on some other points as I love talking lol. I am loving it although I feel like I write realllly long sentences but hey, I am writing this to really explore why I believe the things the way I do and if you can convince me then sure, I can be wrong, I usually am.

Have a nice day and looking forward to your next comment!

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rapsey 6 hours ago | parent [-]

> My biggest issue which is the crust of this discussion might be that I believe that tech stock prices are roaring so high mostly because of the AI hype that they bring which raises their prices.

They are not that high at all, at least nowhere near bubble territory according at least to the financial analysts I follow. A better metric than simply p/e is looking at forward p/e because the current price reflects their forward guidance.

> My conclusion is that A lot of people can't / couldn't invest into OpenAI / thus flowed their money into anything LLM / AI related in the markets... & the companies are loving this and mentioning AI as much as possible

I guess, but that in itself does not mean it is a bubble.

> I can agree if you think that these companies are investing into infrastructure but that infrastucture is now mostly GPU's which are only really useful for LLM related tasks and becomes redundant for general purpose stuff like running servers for the most part.

Recommendation algorithms run on GPUs, which is a huge part of any social network (like meta and tiktok). Like I said there is more than LLMs and those need to run on GPUs as well. They also provide a service to rent out GPUs to other companies to run their own models and make a very good business of it.

> when fundamentally the business model is kinda messed up when you think about it y'know?

You are alone in that opinion. These are some of the most profitable companies in history, which is why they make such a huge part of the S&P. You are talking about a feedback loop of investing, which is normal in any investment bull cycle. It can turn into a bubble and we may be at the start of one, but being an AI skeptic investor just means not participating and having poor returns. The future is uncertain and it sounds to me like you are looking for reasons not to invest.

	▲	Imustaskforhelp 4 hours ago \| parent [-]
		Recommendation algorithms run on GPU's but they were running on GPU's previous to the AI hype and they are still running while running AI inference/training so those datacentres for AI are still gonna be vacated if demand drops down and so it isn't definitely something of an investment These companies have sort of saturated their markets and thus joined into LLM etc. to try to catch the new shiny thing. >You are alone in that opinion. These are some of the most profitable companies in history, which is why they make such a huge part of the S&P. You are talking about a feedback loop of investing, which is normal in any investment bull cycle. It can turn into a bubble and we may be at the start of one, but being an AI skeptic investor just means not participating and having poor returns. The future is uncertain and it sounds to me like you are looking for reasons not to invest. Please try to change the word Ai in this sentence to crypto to see how relevant it might be :> Also, this line kinda means "It may be a bubble but it pays right now" in the sense that you are basing your returns STILL on the fact of some predicted PE. I am just saying that people shouldn't consider S&P 500 "safe enough" then I suppose due to this AI hype if there is even a sheer possiblity of bubble formation. Higher profits generally mean higher risks and there is no free lunch. So S&P 500's higher profits does have a higher risk and people should know that risk before investing and my risk appetite doesn't support it and I am wondering how yours could. Superior returns aren't easy and if someone's saying them without giving you the underlying reason ie. realized productivity gains in an underlying trade (think a house builder built a house which was productive to the family and they are gonna pay for it) (compare it to how messy AI is, and how we haven't really still discussed on why there is so much hype in the market when the economy is doing kinda bad) > it sounds to me like you are looking for reasons not to invest. Yes, I naturally took the discussion from this side in investing in S&P markets and It's wild how you think so when I really agreed to you on a lot of things and your last line sort of sums it except when you look at the true gravitas of the situation, there is almost very little uncertainty about that (so no need for maybe) Sam Altman, CEO of OpenAI, has expressed concerns that the AI market may be experiencing a bubble, similar to the dot-com bubble of the late 1990s This is my opinion too. I was thinking of someone who wants to have a long time in the market as I think I said but time in the market beats the timing in teh market and so these "maybe" lines do frighten me. Do I want to mess around and find out if things are in a bubble with my money!? On a company which is massively enshittening itself in the names of AI (youtube auto dub comes to mind) This was a good faith discussion and I appreciate it but I don't agree on how it means not participating in bubble-ish maybe activities means you aren't getting returns, its like saying that I am not getting returns on crypto because I am not participating... because the whole thing is bubblish & those returns aren't magical... S&P should be considered a safe enough investment not something that is on the whims of a maybe, I suppose? I really like your last line I must admit, and it can take both an AI skeptic (AI skeptic in the sense that the tech is cool but its not gonna generate much profit given the investment) and pro AI person... > You are alone in this opinion .. I;d genuinely love to know if that's the case and I really wish to create an Ask HN, linking to this discussion as I don't think that my take is unreasonable?