Railroads, semiconductors, plastics, networking... the utility was there for all of them, and so was the potential profit.

Everybody knew it.

But some investors don't have the patience for these "sure things" to mature into their commercial destiny and others know they can siphon off a killing by taking advantage of them as they speculate.

These bubbles aren't about potential, they're about timing.

And today's AI, for as revolutionary as it may be, is taking just as long to mature as anything in the past.

Most of the top players involved in AI right now are going to be rich. And in 20 years, the world is going to involve a lot of AI in soooo many things. But a lot of shirts are going to be lost below those top players and a lot of companies are going to fold because infrastructure, refinement, and integration take time while the FOMO speculation starts as soon as the big discovery is recognized.

> Railroads, semiconductors, plastics, networking... the utility was there for all of them, and so was the potential profit.

Canals... where a repeating pattern was the company underestimating difficulty/costs, and going unrecoverably into debt. Another company, which then bought the largely finished canal, cheap, they had potential profit... until tech change (railroads).

> Most of the top players involved in AI right now are going to be rich.

Almost all the "top players" in the dot-com crash died or lived on in relative poverty; only Google and Amazon turned out "very rich".

>But a lot of shirts are going to be lost below those top players and a lot of companies are going to fold because infrastructure, refinement, and integration take time while the FOMO speculation starts as soon as the big discovery is recognized.

Another reason is that the way we find out what works and what not is through experimentation. Especially in a transformation like this it’s impossible to predict which configurations will work and which won’t.

> they're about timing.

Yes. And valuation. I think the leading frontier labs will be fine in the long-run and NVidia will be fine. Some of their investors who bought at too high of a valuation, expecting to flip it in too short a time frame will lose a chunk of their money when they have to sell for less.

The hyper-scalers in the middle are the most vulnerable. They borrowed billions at increasingly high rates to lock up GPU and power capacity. They are 'ground zero' of a lot of the 'circular money' deals. Big banks who financed hyper-scalers initially, expecting they could package that debt up and sell it on to diversify, are already struggling to find buyers for the debt, causing its value to drop, which then forces the banks to cover with more collateral, and that's how the snowball starts down the mountain.

Agreed,

I believe AI is here to stay as general concept turned into practically working implementation.

What that practicality means is we all who consume AI are learning but we're still in the early adopters phase of all that.

Of course AI companies invest a lot and try to stay on top of the traction but I also believe not all of them will survive test of time.

I personally believe that a lot of over investment in data centers and supply of energy will be burnt and will have to be reinvested somewhere else when technology advances enough to "miniaturize" AI enough so it won't require couple of football fields to provide what it does today.

I do believe cloud based AI will be always attractive to small business if price is right and to big enterprises so they don't need to invest inhouse for the scale they need, but that will be sort of alliance based enterprise B2B market.

anything between (including me for the scale I represent business wise), I can't wait until I will be able to buy appliance from 12 to 48U maximum that can do all what me and my company needs AI wise as local AI.

moment subscriptions become equally expensive as pay as you go models, I switch to mac studios with 96GB and reasonable weighted models that will be specialized in something instead of one LLM/AI to prompt everything to it and hoping it can address all sort of problems as one solution.

AI one day must fly to space, be called Mother and discover aliens. it can't be 6 football fields as physics won't let it take off. It must be one day small enough so we all can have ChatGPT 6.1 medium model at home without subscription, just as fixed price with TCO over lifecycle of the whole appliance (software + hardware together)

that may become a drama to many companies that apparently may not be worth trillions unless they diversify enough its AI offering.

> Railroads, semiconductors, plastics, networking... the utility was there for all of them, and so was the potential profit.

I don't see all these things as being comparable to AI... At the bottom, they were "100%" technologies. Trains were just able to transport commodities, and the internet was able to reliably connect computers. So their path to success was about gaining market.

Since they were 100% technologies, they disappeared. One could build solutions using them and forget they are building blocks, because they just worked.

LLM AI is different at the fundamental level, because it's non-deterministic. It needs human-in-the-loop. It won't ever disappear. Gaining market share doesn't fix anything.

I wonder if physical technological progress is also the same as information treatment progress. Everybody is happy having food and materials faster. But AI bringing you solutions faster is also taking away your job, passion.. the negative side seems larger.

Almost everywhere I the world railways are state owned and heavily subsidised and still aren’t that attractive to customers.

I've been saying for awhile now that the utility is increasingly undeniable. It's amazing technology and for better or worse, is transforming the tech industry (in particular). I just wish we lived in a world without the speculative bubbles, because if this had been developed slowly, deliberately, over time, there would be no necessity to cast aside troublesome details like safety, suitability, and ethics...and we could enjoy the fruits as it was implemented gradually, responsibly, as it matures. As opposed to going "wow, this is really cool, but gosh I feel shitty about using it..."

Nor would it have been thrust blindly into the hands of your manager, the marketing department, the CEO, and countless other folks who have no understanding of how it works, its limitations, or its risks.

The difference is that all those things needed physical infrastructure to be linearly build out.

AI models can be deployed on the same datacenter as the old one and be either orders of magnitude cheaper to run, or orders of magnitude more capable.

The only thing that can pop this bubble is if we're not smart enough.

fiber too

What on earth makes people assume there's still huge growth possible in the information sector? We've long been at the very end of the information age and even the latest attempts to squeeze out more benefits using "big data" have failed spectacularly. Especially when it comes to actually producing physical wealth i have seen no indications at all that we can increase anything drastically with a more efficient permutation of information. For example, Let's assume AI "solves" the traveling salesman and let's assume it indeed does find a better route for the delivery guy, what kind time savings are we looking at? The 8 hour route is done in 7.5? That's not going change any society in any measurable way. The just in time industry might become even juster in time but that's about it.

It might be dated but not too long ago a report showed the effect AI had on the SAP 500 and 490 companies couldn't even find any substantial improvement. Mind you, this is during the craze, this is happening while every manager has all the incentives to use as much of the technology as possible, lest they be the one that missed out on the new steam engine. All of these companies invested heavily in cars because none of them wanted to be stuck using horses while everyone else drives off into the sunset... yet most of them didn't manage to measurably outrun the people on horses. That's not the prediction I would have made if I were switching from horses to cars.

> These bubbles aren't about potential, they're about timing.

Oh, I thought they were about unchecked greed and insufficient regulation, but I suppose that works, too

This reads less like a bulwark against sensationalism and more like an attempt to remain ideologically safe in what appears from many angles to be an extremely steep exponential start of what we can probably agree is an S-curve.

> And today's AI, for as revolutionary as it may be, is taking just as long to mature as anything in the past.

I suspect this opinion may come across as naive for the myriad software engineers whose job has become pressing the enter key. Your point about timing is based on solid principles, but I don't think your comment contains a satisfactory argument that the timing is incorrect.

Something something than you can remain solvent

This argument sneaks in the fact that models are commodities which is NOT true. Claude has a different personality and performance than other models for example.

Expect more differentiation in the future and not less.

In 1893, GE nearly went bust as the market got cold feet that electrification was too costly, and the uses too abstract and niche. People were also hugely worried about circular financing, as they were guaranteeing bonds and taking equity stakes in their clients.

As we all know, GE then went bankrupt and we went back to whale oil.

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> Railroads, semiconductors, plastics, networking... the utility was there for all of them, and so was the potential profit.

I wonder why so few people make the comparison to the recent VR hype. We heard the same things there about its unlimited potential, how it's inevitable that we will soon resolve all its shortcomings and that it will become ubiquitous.

I still believe VR will eventually live up to its potential, but no one can deny that bubble has popped after Meta took a huge loss on it. It took too long to resolve the hard problems so the timing didn't work for them.

Your point is a good one, but it's constructed upon the premise that AI is a single discovery or invention or even a single tech wave.

AI is bigger than the Industrial Revolution, the Internet, than computers, than literally any innovation or invention that has ever come before, combined.

Today you see AI slop and vibe coding.

Tomorrow, all of humanity will be affected, forever.

Everything about the way that we learn, that we think, and that we invent will be changed forever.

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