Everyone in the tech and media world is dead set on this being a bubble.

Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer. Teams can and will shrink.

Look at all the production and advertising companies switching over to Seedance. I know ad firms bidding 1/4th their typical contract price (pharma, P&G, etc.) and winning contract after contract.

This isn't dotcom "dark fiber" before demand. The demand is here now, big legacy firms are just struggling with deploying it. Nimble small teams are making a killing.

A financial bubble has almost nothing to do with how good the product is. It's about how much of the value the company can capture, and what the ratio of that capture is compared to the investment.

It doesn't matter to investors if OpenAI or Anthropic can build AGI if a year later 10 competitors have similar models and eat into the revenue. OpenAI and Anthropic needs years, if not decades, of significant market dominance, post-enshitification, to justify their investment spend.

This:

> Everyone in the tech and media world is dead set on this being a bubble.

is completely orthogonal to this:

> Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer.

The industry being in a bubble or not is irrelevant to the tech being good or bad. The dot-com bubble popped (and was a bubble) even while the tech was fit for purpose.

I think the "bubble" is more about return on investment and not usefulness of the technology. So much money has been invested on the assumption that so much return is going to materialize. The more money going in the bigger the expectation of return, that's the bubble.

> Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer. Teams can and will shrink.

If that's true or not, it's a bit irrelevant. Maybe teams won't shrink because of Jevon's paradox, or maybe tech debt will catch up.

But it doesn't matter because the people calling this a bubble mostly believe that the companies burning money cannot have the return on investment needed. This can be for a variety of reasons, but my favourite one is just that open source AI models are good enough, cost a fraction of what the frontier ones do (with predictable costs), can be fine tuned, and can be relied upon (no orange tweet banning your acces to the model you've been using). So for me OpenAI and Anthropic will really struggle to merit their valuations.

And then companies like Oracle are just a dumpster on fire. GPU hosting is a commodity business; expensive one, for sure, but there's no way in hell they'll make actual returns on the money burned with zero moat. And things are even worse when you consider the political involvement of the CEO and his nepo baby, which can easily burn good will.

Yes, but all bubbles (except the tulips...) have a real, valuable, new technology at their core. That it's amazing technology doesn't stop the financial side of it being a bubble. In fact it all but ensures it is.