I think the closest analogy we have of the AI boom is the mid 90s browser wars.

First all the money went into the browsers like Netscape. Then the browser got commoditized, but that didn't mean the value went away. A better business model came along, and lo and behold, the Chrome browser went open source. The browser became free, and the scale of adoption meant a lot of value could still be extracted.

A free browser product didn't mean the value of Chrome went away. Rather the opposite. It's a gateway for buying stuff through Google search.

Marc Andressen was the "Mosaic browser" guy before he was the investor guy, so the folks in the early days did not lose all their money. Quite the opposite. Many are now billionaire oligarchs.

LLMs will likely go the way of the browser... commoditized, then free, then appropriated to shove ads into your face. I predict a lot of safety and interpretability research will be leveraged to one day push ads, just like "Golden Gate Claude" could be manipulated to think of itself as the Golden Gate Bridge.

> I think the closest analogy we have of the AI boom is the mid 90s browser wars.

Depends on how old you are. This analogy makes sense if you were a teenager in the mid 90s. I am older than that so to me, this same pattern had happened when PCs were becoming mainstream. That was 40 years ago so memory of it might be faint or lost. Also VCs weren't really a huge deal back then either but the fundamentals were the same.

We are all overreacting over a nascent industry, upset that it's increasing prices for everyone and pushing humans out of jobs. This is understandable but the conclusion is wrong. We are letting emotions drive decisions.

On the models yes. All indications are models will basically be a free commodity soon.

On the datacenter side the closest analogy is the fiber buildout of the .com bust. While that fiber ended up being useful decades later it’s unclear what value a bunch of half-completed datacenters will bring if their owners go bust.