The whole “AI” thing is one big grift.
Wow. Glad they just converted to a for profit entity! Can’t wait for them to unleash all this success on to the the general financial market.
Maybe, just maybe, the bubble started bursting now.
I wish. Even knowing it’s all a gigantic scam, they’ll first protect themselves before letting it burst and screw everybody else. The rich get a buffer period.
Is it really a scam when it creates content?
It may be slop to you, it may not be useful for everything they market it as.
But plenty of people find it useful, even if they use it for the wrong things.
It is not like cryptocurrency, which is only used by people who want to get rich from it.
Is it really a scam when it creates content?
I create content in a ceramic bowl twice a day. Give me a billion.
The scam is that the business plan is not feasible. Hundreds of techs have died because some cool idea could never make real money.
It’s a scam because the prices they’re charging right now don’t reflect the actual costs. AI companies are trying to get people and companies hooked on it so that once they crank the prices up by 10x to start turning a profit, they’ll be able to maintain some semblance of a customer base. If they were charging the real prices a year ago, the AI bubble would have never reached the levels it has, and these companies wouldn’t be worth what they are now. It’s all propped up on a lie.
I agree with you. Not as useful as tech-bros claim, but not as little as other people claim neither. Definitely not a trillion value thing, tho.
Would be nice, I want to buy some ETFs at a discount
This reminds me of something that came up recently. Copilot started hallicinating quite a bit more than usual in Copilot reviews. That made me think about the cost of operarion. As they burn money like this, I won’t be surprised if they start decreasing inference quality to decrease cost per user. Which also means people relying on certain model behaviour for tasks could get nasty surprises. Especially within automation workflows where model outputs aren’t being reviewed.
Copilot and Gemini are trash. They are driving away future business.
IIRC, OpenAI lost $12b for all of 2024. CNBC reported that OpenAI restructuring this week, has MSFT not only with 27% equity stake, but a 20% royalty rate on revenue going forward which is certainly a nearly impossible hole for OpenAI to get out of.
OpenAI has published analytics on “suicide interactions” which proves that they mine their users data. Support for US military and Israel ensures that their mission is to destroy humanity, unless humanity pays it more to be more loyal to it. Everyone’s “don’t be evil” actually means “don’t be evil unless fascism pays more”
The Israel/US empire needs OpenAI to build ever bigger/more comprehensive models that are even more expensive to use than ChatGPT/Sora’s status as most expensive models. They need the analytics function to oppress population, and the empire is certain to side with OpenAI if it seeks revenue enhancement through theft of IP, including their users’ IP. It is dangerous for anyone to use OpenAI services because theft and oppression by empire condoned symbiosis is by design. But the race for ever larger more expensive models means trashing the previous generation models quickly, which means no time for ROI from development.
OpenAI will need massive military/government contracts to support its $1T in investment promises. All of those are to opppress Americans/humanity. Meanwhile, government has just sponsored 9 independent supercomputer projects, plu8s is dedicated to the MechaHitler vision of reality, and so OpenAI must commit to unrestrained evil in order to get their fair share of the oppression mission, and survive. Expect US government contracts to develop models for it, but with OpenAI profitting from government and private surveillance use.
apparently the bubble might not be as extreme as some people think because the major AI players are all being propped up by companies that actually produce revenues and profits
Like Nividia which… Oh all based on AI revenue.
And even though NVIDIA is better place as they do produce something, but the something in play has little value out of the AI bubble.
NVIDIA could be left holding the bag on a super increased capacity to produce something that nobody wants anymore (or at least nowhere near at the levels we have now) so they are still very much exposed.
I want cheap GPUs at home please!
me too, but the GPU used for AI are not the same as what we would use at home.
maybe the factories can produce both kinds and they would be cheaper, but it is speculation at this point
but the something in play has little value out of the AI bubble.
You’re delusional if you think GPUs are of little value. LLMs and fancy image generation are a bubble.
The gargantuan computational cost of running the machine learning processing that is now required for protein folding and molecular docking is not.
The gargantuan computational cost of running the machine learning processing that is now required for protein folding and molecular docking is not.
Sure but do you need the absolute gargantuan capacity that is being built right now for that? if so, for how long and at what cost?
The point is not that GPU per se are of little value… the point is that what would you do with 10,000 rocket ships if you only have 1000 projects that may be able to use them? and what can those projects actually pay? can they cover the cost of the 10,000 rockets you built?
Sure, but the scientists doing those kinds of workflows don’t have anywhere near the money to burn on GPUs. Even before they had all of their funding cut off for being to gay or brown or whatever crap the Nazis have come up with.
They’re the ones selling shovels in this gold rush, though.
This.
The Metaverse was a Multi-Billion dollar bubble. Did anything happen when it popped? No? Because the company behind it prints money.
lol, what? “Bubble” doesn’t just mean something is expensive
What? there was no such thing a “bubble” around the Metaverse… (at least not the economic slang term “bubble”)
From the first video of the Zuck presenting the idea, everyone just laugh it off… Meta did waste tons of money on it but they had the money to burn so there was no bubble at all in play here
If I am rich and stupid, I may think a pool in the roof of my house is a great idea. I can spend the value of the house having it built and then have the house collapse on me. Since I am rich, I can just buy another house or pay to rebuild it and that’s the end… no bubble.
However, if I am pitching plans for pools on roofs… and millions of people buy into it, many of whom can barely afford my terrible plans, when the houses start collapsing, too many people will be left with no house or means to procure another one… that’s a bubble
The problem is that the companies that actually produce revenues and profits are also in turn being propped up by AI.
You know if you invest all your winnings into all the companies that buy your stuff so that they can buy more of your stuff, you are actually not generating any winnings.
such as?
Hard to say, really. Yes, MS can absorb loss if the value of their stake in OpenAI goes to $0 overnight, but how much of their stock value is based on expectations that they can sell cloud compute for billions of dollars? And how many private and institutional investors have a stake in that?
Microsoft also lowered stake in OpenAI from 32.5% to 27%
https://blogs.microsoft.com/blog/2025/10/28/the-next-chapter-of-the-microsoft-openai-partnership/the smaller the share, the smaller the quarterly losses. Other sources have included that MSFT now gets a 20% royalty on openAI revenue, but its not in that PR. It’s not clear why else MSFT share would have fallen.
is this $11,500,000,000 in real money or speculative money?
There is no difference anymore
Yes, lol.
You think it’s 11.5B worth of gold bars?
Catch yourself up on the discourse; you look like a fool.
Their comment is a bit snarky but pretty funny. This seems like an OTT reaction
You look like a blocked user.
AI is funded solely by sunk cost fallacy at this point. I wonder how long it will be before investments start getting pulled back because of a lack of ROI. I can already feel the sentiment towards AI and it getting pushed in everything turning negative amongst consumers recently.
Why do you think AI is pushed so hard?
Everyone is aware this has to be useful. Too much money.
Still the powers that be will do everything to avoid a hard crash, which would be so much earned.
AI is funded solely by sunk cost fallacy at this point.
and the us economy an gdp relies solely on ai make of that what you will.
Yeah, Trump will prop it up with tax dollars to prolong the inevitable. That’s the American way.
One of our biggest bookstores contracted with a local artist for some merch. That artist used AI with predictable results. Now everyone involved is getting raked over the coals for it.
No surprise, they just announced a 4th round of layoffs too. 😟
https://www.koin.com/news/portland/powells-layoffs-employees-10292025/
How many years did Uber go markiing a loss ? Amazon similarly.
this is not a bad analogy, but you are off by orders of magnitude
more importantly, both Uber and Amazon always had a path to profitability (Amazon specifically was already making tons of money on AWS long before the store front made money). AI has already been shown to not have a path to profitability; whatever little value companies around the world have been able to extract, cannot pay the cost of producing it.
think of it this way:
You produce a little car that can drive 2 people and some bags around, it costs you $1000 to make and you sell it for $3000 which a ton of people can afford… you have a path to profitability
I enter the market with a car that can carry 20 people, plus full on luggage for all and it moves twice as fast… but, in practice, I can only really move 3 people and often take them the wrong way, also the luggage was a complete lie and I can only allow passengers with their purses… also my car cost $50,000 to make so I would have to sell it for $70,000 and nobody would pay that when they could get 20 of your cars for less… also also, I promised the people making some parts of my car that would invest 7 kajillion on their companies somehow.
Which company would succeed? yours or mine?
Amazon didn’t make a profit, they didn’t lose 11Billion a quarter
Investment is done really to train models for ever more miniscule gains. I feel like the current choices are enough to satisfy who is interested in such services, and what really is lacking is now more hardware dedicated to single user sessions to improve quality of output with the current models.
But I really want to see more development on offline services, as right now it is really done only by hobbyists and only occasionally large companies with a little dripfeed (Facebook Llama, original Deepseek model [latter being pretty much useless as no one has the hardware to run it]).
I remember seeing the Samsung Galaxy Fold 7 (“the first AI phone”, unironic cit.) presentation and listening to them talking about all the AI features instead of the real phone capabilities. “All of this is offline, right? A powerful smartphone… makes sense to have local models for tasks.” but it later became abundantly clear it was just repackaged always-online Gemini for the entire presentation on $2000 of hardware.
more development on offline services
There is absolutely massive development on open weight models that can be used offline/privately. Minimax M2, most recent one, has comparable benchmark scores to the private US megatech models at 1/12th the cost, and at higher token throughput. Qwen, GLM, deepseek have comparable models to M2, and have smaller models more easily used on very modest hardware.
Closed megatech datacenter AI strategy is partnership with US government/military for oppressive control of humanity. Spending 12x more per token while empowering big tech/US empire to steal from and oppress you is not worth a small fraction in benchmark/quality improvement.
The problem is there is little continuous cash flow for on prem personal services. Look at Samsung’s home automation, its nearly all online features and when the internet is out you are SOL.
To have your own Github Copilot in a device the size and power usage of a Raspberry Pi would be amazing. But then they won’t get subscriptions.
They’re investing this much because they honestly seem to think they’re on the cusp of super intelligent AGI. They’re not, but they really seem to think they are, and that seems to justify these insane investments.
But all they’re really doing is the same thing as before but even bigger. It’s not going to work. It’s only going to make things even more expensive.
I use Copilot and Claude at work, and while it’s really impressive at what it can do, it’s also really stupid and requires a lot of hand holding. It’s not on the brink of AGI super intelligence. Not even close. Maybe we’ll get there some day, but not before all these companies are bankrupt.
The dot com bubble 2.0 is on the horizon
I knew it was a bubble since Computex January 2024 when Derb8uer showed an “AI PC case”. He asked “What’s AI about this PC case?” and they replied that you could put an AI PC inside it.
You are talking more about the term here being used everywhere out of context.
I am talking about companies slapping “AI” on their products and systems and raising their value, in the same way that companies in the 90s slapped “dotcom” on their branding and raised their value.
I wonder how long it will be before investments start getting pulled back because of a lack of ROI.
Just wait for the next hot thing to come out
I’d love to see a revisit to METAverse. Lmao.
Oh no!
Anyway…
So they “lost” $11.5B? Cool, I lost 20 bucks last week and still had to explain it to my accountant 🤭 Feels like the entire AI industry is built on “don’t worry, growth will save us”, but at some point someone has to pay the electricity bill…
It’s magic that will magically transform the world and make everybody rich and magically do our work for us. Like in Disney’s Sorcerer’s Apprentice.
No, you don’t understand. Lose money on every sale, but make up for it in volume!
If you lose enough money, you trigger an integer overflow and end up with a profit!
When I lose $11 Billion dollars, I have to go to bed without supper.
If you owe the bank $100, that’s your problem; if you owe the bank $100 million, that’s the bank’s problem.
The difference between 100 million and 11.5 billion is about 11 billion. If you own a bank 11 billion that’s not only that bank’s problem, it’s the economy’s problem.
It’s about 11.5 billion, really.
It’s exactly 11.4 billion, really.
Well, if you want to get exact, sure. But if we’re talking about half units, like 11 and a half billion, then 11.4 is so close to 11.5 there’s no difference and calling it just about 11 sorta implies that it’s a more significant difference IMO
So I wondered a bit how much it actually affects the economy.
“S&P 500” companies’ market cap is about 57 trillion dollars with a P/E ratio of about 30. So openai by itself is dragging down the total s&p 500 earnings by only about 0.5%. The bigger problem is that there are multiple companies like openAI, and a large chunk of the entire economy’s valuation is tied to the promise that all the AI companies will somehow become profitable sometime soon.
When you put it that way, I’m actually kind of mad. Most of my retirement is in index funds, so essentially OpenAI just pissed away half a percent of my life savings in the last quarter!
According to this article written in July, it’s a bit more dire than that if you take a step or two back. Basically, openai and their copycats/derivatives are being held up by investments from Microsoft, Google, Amazon, and Meta, who in turn are being held up by investments from Nvidia. If/when the whole chain collapses it’ll be more than 0.5% of earnings that disappear.
If OpenAI goes down then it will start a domino effect as people lose confidence in AI and AI companies. That’s how the bubble pops.
So it ALL depends on the definition of “soon”?
Probably
I was referring to the general concept behind the quote.
I originally want to post the OG (apocryphal?) variant:
Owe Your Banker £1,000 and You Are at His Mercy; Owe Him £1 Million and the Position Is Reversed
But it sounds rather quaint these days.
Partially, if OpenAI lose 11.5 billion, someone get 11.5 billion, the money is used to pay something it did not vanish in a cloud
12 billion in one quarter…. Holy fuck
What’s a few billion to a TRILLION company? That’s peanuts. Everything is fine fellow citizen.
I look forward to the AI bubble bursting, and billionaires looking shocked, ‘because there were no signs’
They won’t lose any money…
In contrast to the housing bubble, where a lot of the value was in overpriced houses sold to individuals, this overpricing is almost entirely in tech stocks, and tech stocks are almost entirely owned by by the wealthiest 10%, even 1%. The tech billionaires have limited ability to divest themselves of their own overpriced companies and absolutely will lose money.
None of them are going bankrupt, they’ll all be just fine when the market recovers in a few years, because that’s the nature of capitalism. A bunch of peons, who convinced themselves that the bubble-value of their 401k meant it was safe to retire, will suffer, will have to go back to work - if you’re not an oligarch, losing money is painful.
In contrast to the housing bubble, where a lot of the value was in overpriced houses sold to individuals,
was?
34% of single-family housing are now rented out. We’re not building enough housing, a fact that hasn’t changed since the housing bubble collapsed. So, a lack of investment in new property, large funds putting money into existing properties instead, and less risky homeowners overall means we don’t really have a housing bubble. We have a supply shortage, leading to high prices. The correction for that isn’t a crash.
What housing bubble are you referring to?
If you watched that movie, you would know that wasn’t a housing bubble, and it had nothing to do with pricing. It had to do with lenders fraudulently selling mortgages to anyone who could fog a glass, knowing full well they wouldn’t be able to repay them.
They will be fine either way…
Im watching all this and im thinking you guys are being convinced to not buy these stocks.
I just keep buying. Because I know how this works. Seen it many times now. Media says one thing, market goes another way.
Do you guys remember when Tesla was down extreamly much because the media and most people on Lemmy were convinced that musks nazi salute would mean the company is done? It was only like six months ago, you cant have missed it.
Now go look at the stock. Buy tech stocks. Dont do what the media is telling you. They are not there to help you.
You have to be smart, and being smart is not following the public opinion about things, because its being shaped by the owner class. If the media is telling you to sell, you probably should be buying. And when its telling you to buy, be very careful because the media owners want to sell.
You have to view it like you are inside the matrix. In a way, we are.
This will no doubt keep working for a while, but eventually the bubble will burst. Without selling stocks just before that, chances are you’ll lose money, and since apparently a Nazi salute isn’t enough to crash a company nowadays, this shit is completely unpredictable.
Hang on… unless it tanks below his/her entry price they aren’t losing anything. Just gains that were missed by the drop in value, but selling at any time before that point will make them money (above any brokerage/trade fees).
Sure, if you’ve invested early that’s the case. If you invest now and there’s a crash in three month, you’re likely screwed. But maybe a crash happens in a couple years or not at all for some unforeseen reason and you might be alright, it’s basically impossible to know. The point is, the worth of all these tech companies is severely overinflated and trying to make money off of their stocks is definitely possible but risky. If you’re aware of that, go right ahead.
Y’know, I’ve been hearing that drumbeat for well over a decade. News doesn’t sell if it isn’t bad. Eventually the Boys Crying Wolf will be right, but it certainly won’t be because of their prognosticating accuracy. The market has long stopped making sense.
You cannot know what the market will do, and if you can figure it out, it’s already too late. If you want to assume the parent comment will actually lose money because they didn’t put stops in place or whatever, fine. My comment is still correct: If you sell above purchase price + fees and gains taxes, you don’t “lose” money. The rest is just making stuff up.
I never said your previous statement was incorrect, and I never said investing is a bad idea. I was specifically talking about investing in overinflated companies. I am myself buying diversified ETF shares every month and will continue to do so.
Good luck.
Of course its not enough. Stock market cares about money, not morals. They know negative emotions are temporary and doesnt last.
I see more white Teslas than ever on the streets. They are the most popular company leasing vehicle appearently. A lot of things play into what cars people pick. Most people probably forgot about the nazi salute in a few weeks, or got a good deal on a Tesla and bought it anyway.
I dont think this is a bubble and it wont burst. I think its the beginning of a switch to a robotic society, with robots, Ai and implants, all requiring more energy than we have right now. The massive investments in power may look like its going to be used for training models, but it will be used for very different things we dont even have right now.
Any future high tech society will need tons of power. The billionaries are several steps ahead of what the media is talking about. As always.
You seem very convinced that glorified auto complete will lead to AGI…
No not agi, thats a dream we wont see in decades. But this is the start.
And VR will take off any day now?
If it’s a switch to a robotic AI society, where’s the profit gonna come from? The stock prices reflect expected future profits. If we have more work done by robots and AI, that work isn’t done by people, so people aren’t getting paid for it. Who’s gonna pay for this product to materialize these expected profits?
Companies and governments are gonna buy robots, made by other robots. Typical scenarios include military, manifacturing, surveillance and so on.
Today companies pay humans for those things. It will change as soon as robots can do a task.
The key is getting out at the right time, and that is weighed massively against small investors. The big investors and institions control the market and can move quickly while small investors cannot.
Tesla is not doing well - look at its falling sales. It’s a risky stock to hold. The AI companies are also highly risky stocks to hold.
That doesn’t mean don’t hold them - all anyone is saying really is that these are high risk investments, and at some point they are going to probably crash because it’s a bubble.
That doesn’t necessarily mean “don’t invest”. It does certainly mean be prepared to get out fast and also only use money you can afford to lose when investing with such high risk stocks.
If you look at Tesla chart, or any other tech stock chart, you can see that nobody would have lost money if they didnt sell. They are all going up long term. Tesla is up 100% in three years, 240% in five years. Everybody who sold during that time made the wrong choice, unless they invested in something that went up more.
Just dont sell, ever, until you retire. This is super hard to do but its what the charts show is actually best.
I don’t invest in these companies on principle. I ain’t going to fund the rise of fascism for stock gains. That won’t help me when I’m shot dead or in a camp.
Nothing will help you when you are shot dead in a camp. You live your life until that happens, if that happens.
But yeah, I understand your principles. The problem is that if only bad people have money, only bad people have power as well.
I have enough money (for now). Divested from all tech during inauguration funding news, invested in European defence companies, and then just gold because all the crazy uncertainty about everything. Still made pretty good gains, but not as much as if I stayed in tech.
I missed both gold and defence… Now I dont know, what is the next thing to invest in? What do you think?
I know power is something that will be massively needed.
What’s investment got to do with the article (or even the comments or people’s sentiment on the Threadiverse)?
There are a wide variety of investment strategies depending on your situation and other factors. I don’t see how these are related to tech news discussions.
I am not saying your are wrong or right, just an observation.
Negative news about stock bubbles = influencing people to not buy the tech stocks because they get scared. No?
Perhaps, but how do you know that this is an actual trend?
An argument can be made that there are more people with your sentiment or perhaps the news about a bubble will attract short terms investors (trying to cash in as the wave is rising).
Generally speaking, discussion on Threadi, even ones that mention bubbles in context of AI/Nvidia, don’t mention investment strategies.
I dont know if its an actual trend. But it would make sense that most people buy and sell based on what the media is telling them. I believe that most people trust what the media writes. They are not sceptical and cynical like me. :)
I dont have an investment strategy except buy and hold.
That’s fair. For me personally, I don’t see a connection with forum posts and investment decisions (in aggregate, retail investors to my understanding make a small part of the market).
How do you make your investment decisions? You are not influenced by media at all? Just buy what you believe in?
Of course I am influenced by various things, we all are. I am not implying otherwise.
On a personal level, I don’t see the connection between posting on a forum about articles on the possibility of an AI bubble and investment decisions.
I am not necessarily disagreeing with you. I think people are a bit more complicated than that and circumstances can be very different.
