Well yeah. Sam Altman just came out and basically said he needs a few trillion dollars and government backed loans. This shit is going to be BAD.
Yay, yet another once in a lifetime financial crisis.
Capitalism is the only way ;)
Has anyone else noticed the recent resurgence of mechanical turk jobs? It’s all AI training work. Before the work was doing tasks directly. Now they have people training tailored AI models.
In other words the tech bros have found get another way to shoehorn themselves in as a middle man. Instead of having workers do the work itself. Now the work is delegated to AI. Which is trained to do the task by humans.
At first it said the LLM era was the end of mechanical turk work. It’s going in a circle back to mechanical turks again.
This is in a category I’d like to call hopebait. People so badly wish things they feel are bad simply stopped themselves, that they’ll upvote anything that appears to confirm this.
In this instance, there is nothing of substance in this article to suggest the end of anything is anywhere near in sight.
One guy, who makes bets constantly, made another bet.
Seriously the stock market can remain irrational longer than you can stay solvent.
People are idiots.
Is there a consensus there’s an AI bubble? Sure?
Can anyone predict what will happen? LOfuckingL
There’s an AI bubble?
I was pretty certain it was grifts all the way down lol
This is the most accurate take I have yet seen.
I’m thankfully OoL enough but I guarantee there are some AI backed crypto out there which is so deliciously awesome given the double down on smoke and mirrors.
I think it’s all the way up in this case
Now I most definitely don’t want it to pop 🤣 moreso because the reality is the bubble popping doesn’t hurt them it only hurts all the idiots who spent their meager earnings on this shit.
The rich never suffer, other than having to buy the smaller yacht.
If he needs a straight pin to pop it I can send him a couple
I’ve got a problem with articles like this: “The guy who got it right once is betting a second time he’s going to get it right”. and then the article continues: “Even though he’s got it wrong a bunch of times since, he got it right that one time… So this has gotta be his second time!!”
The odds of being right x times in a row must be really low, correct?
I just phoned a business today that ended up with an “AI receptionist” when they didn’t answer the phone.
They wanted to take my name down, asked who I was leaving a message for, and then recorded the message…
My god what a painful process that was. It was absolutely useless. Firstly it got my name wrong, and then the name of the person I was leaving the message for wrong. No “Janet” my name is not Don it’s John, and no I’m not leaving a message for Kim Its for Kam. And then it needs to repeat your entire message back to you in order to make sure it didn’t fuck it up which amazingly the message was probably 95% okay but it was a giant waste of my time when a FUCKIN VOICEMAIL WOULD HAVE SUFFICED
Had an issue with Comcast today. They forced me to use their Xfinity app, but what I needed to do wasn’t an apparent option within the app. The only option I saw was a support chatbot. The chatbot listed a link to the option I was looking for. The link opened a webview within the Xfinity app, in which there was a link to download the Xfinity app.
Unnecessary Apps and chat bots. Two of my least favorite things referring me back and forth, forever, in an endless loop.
comcast is probably the worst cs, plus they always trying to pedal you shit.
Peddle but yes, they’re monsters
referring me back and forth, forever, in an endless loop
Just like they intended.
an online store, for games used a fully AI agent as a CS, it was giving them the run around, till i kept asking about escalting it, finally it was able to either contact them shortly or through email.
I’m reading along and I’m im like, “yep that’s dumb and that’s dumb, and that’s dumb. Yep that’s dumb and that’s dumb too.”
Then I read the last 7 words and, “Oof… yeah that is REALLY FUCKING DUMB”
What does his height have to do with anything? Are we body shaming?
deleted by creator
Huh. I understood that as “big player in shorting world”
You understood that part correctly, but misunderstood the joke
It’s a movie title ‘the big short’ which tells the story about the housing market bubble crash
My money is on the American bubble popping. China would do just fine. As to Europe’s? Probably not developed enough to seriously impact them, but probably able to fill America’s void once the bubble action has died down. America is pretty fucked in general, so it isn’t so much AI in particular, but rather a ghost economy.
Something based on imaginary stocks, grift, de-industrialization, ghost jobs and falsified labor statistics, likely mixed with a debased dollar, just doesn’t bode well.
Most of the European digital infrastructure is caught in the web of Microsoft, and will be pulled down with it when Microsoft inevitably lose their bets on AI.
Pulled down how? They will just keep using office or azure or whatever. No changes.
Seems to me that the Microsoft stock may drop 20% but otherwise, what consequences will it really have on European markets?
Europe should focus mlre on using mivrosoft, google and amazon (european) alternatives
Something based on imaginary stocks, grift, de-industrialization, ghost jobs and falsified labor statistics, likely mixed with a debased dollar, just doesn’t bode well.
This is literally describes China, what are you even talking about?
It is a matter of degree. While China has issues, America’s is much worse across the board.
Again, what are you even talking about? Literally everything you listed China is doing much worse in, not to mention other major issues like a demographic crises on top of everything else.
You’re an actual moron if you truly believe that.
even if chinas AI doesnt work out, they probably do a slow deliberate fall, orchestrated by the ccp. much like they did with the evergrande ponzi scheme.
What a shitty take. Imagine betting on something with a poor human rights record and countless privacy violation. America may have it’s faults, but it will get ironed out like it always does. I’m hoping for everybody’s sake that China doesn’t become the new global superpower. America has the soft power thing down to the t at least.
As for the other claims you made, source?
In my humble opinion Bush kind of fucked America up, but that is fixable.
Dude. I live in the US, and would like it to be a super-awesome place that genuinely leads the world in morality and prosperity.
Unfortunately, my nation has been going down the toilet. If you haven’t noticed, things like ICE’s raid on Hyundai, the undeclared war and crimes upon Venuzela, over 1,800 people disappeared from Alligator Alcatraz, Mike Johnson refusing to open congress, the SNAP denial, and other bouts of malicious stupidity are very bad signs for the future.
In any case, I don’t like China, but it is likely to be a superpower for awhile until India or someone else takes the crown. The crown was America’s to lose, and I am pretty sure we are losing it.
If I had to make a guess, I say it probably will. The convenience of AI is probably here to stay, but the craze of replacing everything with AI will go out the door.
AI will become exactly what it should have been in the first place: an assistant. Not your friend, not your doctor, not your therapist, not a replacement for artists/authors/programmers, and not inside every piece of tech post 2025. It has a place. That place is over-embellished right now, not to mention unsustainable.
It will definitely burst, and might take out some fairly large companies with it. Potentially even one or two tech companies that have been around for decades depending on how large it gets before that burst. One or two companies will end up with the IP all of them are “building” and it will fizzle into the background of daily use just like the previous assistants like Alexa, Cortana, etc. have.
Potentially even one or two tech companies that have been around for decades depending on how large it gets before that burst.
Please be Microsoft, please be Microsoft, please be Microsoft.
Itll be
nvidia andopenai primarily, id have to imagineIt wont be Nvidia unless they play things incredibly badly, they’re the only ones making actual profit by selling shovels in the goldrush.
Yeah, but dont they also have the largest promisory debt? Havent they loaned the most most money that they dont actually have?
From a quick look they have ~40B USD in liabilities and make ~115B USD gross profit. Being able to pay off the entirety of their debt with 4 months of profit seems pretty healthy to me.
Cool, in a not super cool way. Nvidia is kinda scummy but the work they do is valuable. I appreciate you dropping the facts on me, but im not sure how to feel about them.
They “loaned” money to companies that immediately turned around and used that money to buy their products… So they got the money back and are only maximum out the production costs of those units if the loaner can’t pay.
But if there is a bankruptcy, they’d be at the front of the line to collect
Pretty sure they meant “[have been] loaned” but you make an interesting point
Yeah, but can they handle the collapse of going back to the company before the AI boom? They’ve increased in market cap 5000%, attracted a lot of stakeholders that never would have bothered with nVidia if not for the LLM boom. If LLM pops, then will nVidia survive with their new set of stakeholders that didn’t sign up for a ‘mere graphics company’?
They’ve reshaped their entire product strategy to be LLM focused. Who knows what the demand is for their current products without the LLM bump. Discrete GPUs were becoming increasingly niche since ‘good enough’ integrated GPUs kind of were denting their market.
They could survive a pop, but they may not have the right backers to do so anymore…
Definitely a possibility! But dealing with “only being a normal profitable company” is a very different problem to “oops, we were selling $10 for $5 and VCs have stopped giving us money to burn, and people are using self hosted models too”, which is the possible outcome for the big AI labs.
Microsoft already had a proven business model and established products and services before the AI boom. If a company goes under it would almost certainly be one focused almost entirely on AI such as Palantir.
Lol, Palantir isn’t going anywhere.
And the AI bust will hit primarily generative AI, and Palantir does things a bit differently.
agreed palantir is on the government tit
if boeing fuckups can kill people palantir is not foing anywhere
Nah, they already converted all their business clients to recurring revenue and are, relatively, not very exposed to the LLM thing. Sure they will have overspent a bit on datacenters and nVidia gear, but they continue to basically have most of global business solidly giving them money continuously to keep Office and Azure.
In terms of longer term tech companies that could be under existential threat, I’d put Supermicro in there. They are a long term fixture in the market that was generally pretty modest and had a bit of a boost from the hyperscalers as ‘cloud’ took off, but frankly a lot of industry folks were not sure exactly how Supermicro was getting the business results they reported while doing the things they were doing. Then AI bubble pulled them up hard and was a double edged sword as the extra scrutiny seemingly revealed the answer was dubious accounting all along. The finding would have been enough to just destroy their company, except they were ‘in’ on AI enough to be buoyed above the catastrophe.
A longer stretch, but nVidia might have some struggles. The AI boom has driven their market cap about 5000%. They’ve largely redefined most of their company to be LLM centric, with other use cases left having to make the most of whatever they do for LLM. How will their stakeholders react to a huge drop from the most important company on earth to a respectable but modest vendor of stuff for graphics? How strong is the appetite for GPU when the visual results aren’t really that much more striking than they were 3 generations of hardware back?
the real danger is if it will cause another great depression when it pops…
Depends on when the bust happens. If its in the current admin? All those tech companies are getting bailed out.
I think that might actually send the US into a debt spiral that would require leaning into printing and inflation. Net interest for FY25 is $933 Billion putting servicing debt as the third largest federal expenditure. Any bailout will either be insignificantly small or will tank the dollar.
I’m not saying you’re wrong, but it would be an incredibly stupid thing to do.
It’s a good thing trump isn’t dumb enough to think US debt is easily solved by printing more money, right?
Wouldn’t that be crazy?
(I really hope this isn’t something he can actually do. It shouldn’t be possible, but neither should a lot of things he’s done.)
but it would be an incredibly stupid thing to do.
So we can pretty much bank on it definitely happening, got it.
Agreed. Probably where it should have stayed in the first place. Not that its not interesting, just that the scope of AI has widened beyond what it should have.
I am having trouble seeing how OpenAI survives without investment cash. What exactly is their moat? I know they are hoping to power the AI behind everyone else’s tech but that is more and more untenable as the others develop AI models of their own.
Just a reminder that the term “AI” stands for a category of systems that contains a lot more than just LLMs.
Sir, this is the stock market.
People order with their feelings, not facts.
I don’t know how this relates to what I said.
Once the ai bubble breaks for llms it will drag general machine learning down with it once panic sets in. People wil dump any stock that even faintly smells like ai.
Some actually valuable business may disappear, on the other hand those that survive and are undervalued may actually be a good investment opportunities.
This is not financial advice, to gamble your money is dumb.
Yeah, okay, but I still don’t know how this relates to what I said.
Um… You are aware you made your comment about ai being much more then just llm within context of a discussion on wether the ai bubble will burst or not?
Cause that’s what this post/thread is about.
The ai bubble will burst nonetheless. I was also playing on the “sir, this is a Wendy’s” meme. In a way joking that your comment is actually not relevant to the discussion.
I was commenting on what another user said, not on the article OP posted. Not every reply in the comment section is a direct response to the topic at hand. I was talking about the definition of terms, not the stock market.
True, true. In this context I mean the LLM craze. The GPU era of AI.
Main reason it can flourish as assistant in the first place is that Google search engine became shit
It’s not that Google’s algorithms got bad, but the entire Internet turned to shit and they can’t compensate for it.
For anything not time-sensitive, try adding “before:2023” to your search. I’m betting the quality of your results will skyrocket.
ETA: fixed autocorrect
I’m paying for a search engine “kagi” just because Google search results have more advertising than time square. It kind of sucks since we got used to search for free but at least I can get relevant results rather than advertising when I search.
Dotcom groundhog day for the tech sector.
“convenience”? You mean CEOs being able to lay off workers with some magical technology that does nothing? Yeah, that’s surely convenient for the 0.1% of people in the world that doesn’t affect. Love that “convenience” for them.
Did it cup your balls during the last BJ or something? Fucking hell, what is it with randos on the web scaping for AI at every instance…
Friend saw ‘convenience’ and that was it. No more reading, only fists. I thought I was quite neutral. Yes, convenience. I have been known to use a local LLM based on recipes to give me ideas what I could make based on my pantry.
I have a lovely recipe for absolutely delicious chocolate-chip cookies that use pancake mix.
Are you trying to deny that AI is also convenient for regular people?
Uh, yes. AI cannot and does not have productive output as its goal, technologically speaking. Therefore, any “convenience” is imagined and projected upon an algorithm of statistically most likely text. It’s just a statistician strapped in front of the 1 Million Monkeys thought experiment.
It’s quintessentially useless, unless your ultimate goal is text resembling language en masse. But usually, Loren Ipsum is much more energy efficient.
But if it saves time on some simple tasks, how can you say it’s not convenient?
there is no task that is meaningful time saved by a kind of context-dependant lorem ipsum. The task is then not done, but simply rejected on its face.
I have no clue what you’re trying to say.
If I ask an AI to write an email and it does so both better and faster than I could, how can you say it’s inconvenient and doesn’t save time?
Burry also lost money since 2008 making shorts like Tesla. The Big Shart.
Looks like very mixed returns. Which is what you’d expect from a strategy of betting on areas that are significantly overvalued.
The market can remain irrational for longer than you can remain solvent
See Bill Ackerman and Herbalife.
Federal regulators should have shut that shit down ages ago, but the grifter party loves MLMs (look at how the DeVos family made their money…)
Ackerman and Valeant. He promised congress he was going to stop price gouging on drugs.
Nah.
Oh god, I just saw another storefront in my local area that popped up. My coworker dragged me in there, and aside from the incredibly overpriced products, the countertops were loaded with pamphlets on doing the herbal life thing.
Can investors remain irrational long enough for OpenAI to remain solvent?
They have been irrational longer than you’ve been an investor. They have become exceedingly efficient at it.
I mean, he is not wrong per se, he just had the wong timing.
With shorts timing is all that matters.
…what if he had the Jiang time?
Nvidia down ~8% this week, Palantir down ~10%
Maybe the needle really is shifting.
Maybe, but he’s also been super wrong a bunch of times on his skitzo twitter account so grains of salt and all that. Not saying the guy isn’t smart, clearly called one of the biggest systemic crisis of our times, but he struck gold once and struck out a bunch more often.
Because it’s more likely that he got lucky once and his short position was strong enough that he could keep paying the premiums than it is that he is some super genius who knew something noone else knew
The fact that he was even able to make that bet is incredible. How deluded do you have to be to think the AI bubble won’t burst? Keeping it going will require in ever-increasing amounts of money to paper over the gaping chasms that keep cropping up, and eventually the amount of money necessary to keep it going will cease to be feasible. Then, after taking gullible investor for all of they’ve got, the whole thing will fall over in the world’s most well deserved and predictable market crash.
The subprime mortgage collapse was inevitable only in hindsight, you had to have a good understanding of the market to see it in advance. To see the level of corruption and false promises that have to be made in order to make the mortgage bubble possible. But everyone can see the AI BS right out in the open, I’m not talking about the “how many Rs are in strawberry” questions either, I can sort of see why that’s not really a fair question. I’m talking about the fact that every single business that has ever tried to replace its employees with AI, has always failed, and failed almost immediately. Even Amazon couldn’t make it work.
inevitable only in hindsight
I’m not so sure. I’m still friends with a guy who told me emphatically “you dont understand what we did, we destroyed the global economy” and then explained the whole subprime mortgage scam to me, back in like 2007. Lots of downstream businesses, new home builders, paint and drywall companies, building materials stores, started folding several months before the official crash as well. I wasn’t nearly as aware of things then, I was a grown adult but not yet 30 and with little formal education, but there were definitely huge flashing signs. Only the media, based 100% on the words of the banks and insurance companies, thought that a crash was undetectable.
I’m not sure quite what it would look like yet, but I’m willing to bet if you look where these data centers are being built, when the cash runs out to keep the whole scam afloat, these big companies will stop paying their bills. The smaller companies providing services and supplies will run out of money before the huge mega corpos start showing signs, so that is one of the metrics I’m watching closely. I just happen to live in the shadow of these data centers so I’ll be pretty close to it, that is if I’m right.
One of the first deals I did in real estate (~2006) was a sale at 115% loan-to-value, no money down, seller-paid closing costs. The buyers received $2500 at closing. Nobody batted an eye.
I remember the news reporting about record breaking amounts of mortgage defaults in like 2007 as well. The signs were all there, but people were too oblivious or high on their own supply of farts to see them.
Anytime people are like “we couldn’t see this coming” I never understand why they are allowed to pass that obvious lie off in public.
The AI bubble signs are in plain view everywhere you look right now. If (or much more likely when) it bursts everyone will be talking about how they couldn’t possibly see it coming again.
If people say they couldn’t see this shit coming, maybe their myopic asses shouldn’t be in charge of anything important ever again.
There was quite a lag between the variable-rate mortgage rates going up and everything noticeably exploding, so lots of people who were aware there was a real risk of things going tits up decided that it hadn’t and therefore wasn’t going to and had stopped looking for signs by the time they started to appear.
I think the idea is that, whilst shorting, you get squeezed. The question is not ‘if’ but ‘when’ and if it takes too long and you’re $1B deep you can lose your shirt
Yep. The market can stay irrational etc
The thing is though as long as it goes down that’s usually all you need. You don’t need a total collapse.
That’s the thing though, options are generally relatively short in duration, with most being a few months. The longest options are around 1-2 years out.
Could AI stay keep its hype for 1-2 years? Probably. Will it? Who knows!
I assume he has enough funds to buffer and roll it forward if it takes longer than he thinks.
The question is, will he still see a profit if it takes 5-10 years? Will his investors stick with him even if he loses billions? They almost left in 2008, what if this takes longer than that?
If you’re taking the contrarian stance in investing, you have to be right both about direction and timing, and timing the market is very hard if not impossible.
Yep, you can only do so much risk management and hedging, and only for so long. There comes a time when you have to cut it off but, you know, hubris
I think, AI quality aside, it’s mostly a matter of timing - IMO the AI bubble is obviously going to pop, NVIDIA’s market cap is now 16% of the entire US GDP and OpenAI is trying to IPO at a trillion dollars, which seem like ludicrous numbers to me. But I learned from the last few years that you can also never really underestimate society’s ability to just say fuck it and kick the can even further down the road.
And of course, SOMETHING is going to have to be the final straw that brings it all down, and it could very well be this. But I also didn’t think we’d get this far - the 2008 crisis didn’t do it, COVID somehow didn’t do it, but these things are are also all compounding as we don’t deal with them properly. And if AI is going to be the last straw, how long can we put it off for? Could it pop next year or can we still hold it off for another decade with even more ludicrous number-fuckery? I think that’s where the trick is going to be.
The market can remain irrational longer than you can remain solvent.
Uh oh, I can stay solvent for quite longer
And if AI is going to be the last straw, how long can we put it off for? Could it pop next year or can we still hold it off for another decade with even more ludicrous number-fuckery? I think that’s where the trick is going to be.
The thing that boggles my mind in all of this is the possibility that Trump installs some absolute toady tool bag in at the Fed and then just has the federal reserve bail out all of the bad investments. It’d mean probably hyperinflation, but who cares about normal shmucks trying to live a life? It’s much more important to pay the genius, scammy billionaires so they can keep their mega yachts fully gassed and assed.
everyone can see the AI BS right out in the open
To me it is four things in particular:
- How AI use erodes skills in the subject AI is being used to assist in. This is a 100% occurrence, and has been demonstrated across all industries from software developers to radiologists. Most experience a 10-20% erosion in their skill set within the first 12 months of AI use, but others in the study groups have seen up to a 40% erosion in their skill sets.
- How AI use shuts down critical thinking, and makes users more stupid. This is a 100% occurrence, and has been clearly demonstrated by MRI scans of the prefrontal cortex while users are actively using AI.
- How AI use makes the user slower. This is the only user point that is not 100%, as only less than 2% of the most senior and skilled users show a slight increase in work completed… after more than 12 months of using AI. Projections have been made on the other 98%, and over 90% of them will never work faster with AI than without it, regardless of training or experience.
- The gratuitous hallucinations, which are only increasing in scope and severity with every AI generation. It arises entirely from the constraints the AI are rewarded with - providing no answer is weighted just as negatively as a wrong answer - and anywhere from 60-80% of all responses are hallucinatory or incorrect in some fashion, depending on the current model.
In prior generations, any industry with such performance would be laughed clear out of the boardroom.
But because capitalism is desperately seeking a solution to what they perceive as a problem - how to obtain labour without having to pay said labour - AI is being adopted hand-over-fist.
After all, the underlying purpose of AI is to allow wealth to access skill while removing from the skilled the ability to access wealth.
Ugh… Minor rant.
My aunt is into tech like me. She dived head first into the AI in the middle of the hype instead of during IoT era when machine learning (the foundation of GPT models) was part of a larger SDK for building smaller tasks. Now she won’t stop pushing it onto my mom like a salesman by saying she should do this and that with ChatGPT or whatever, and it’s so freakin’ annoying.
Luckily, I’ve told my mom straight up to not buy into it.
Huh. Never noticed the MLM parallels of the current AI hype so much before. Literally levenschtein distance of one, should’ve spotted it.
Investors have been happy to incentivise companies to hire idiot CEOs and managers who say the right buzzwords but reduce output by making bad decisions and only hiring people who don’t think they’re bad decisions, so an automated buzzword-dispensing idiot isn’t necessarily going to seem to investors like a downgrade compared to what they think most workers are. They’re just as likely to think AI lets them invest in companies where even the lowest tier employees are potential CEO material, and continue not noticing that the per-employee efficiency keeps going down. Data showing that layoffs nearly never pay for themselves doesn’t stop stock prices soaring whenever one happens, so I wouldn’t expect data showing AI makes companies less profitable to stop stock prices going up when a company announces a new dumb way they’ll use it.
Do you have references for these claims? I believe you, but I’d like to know more.
All this you listed is the reason why we are fucked if we keep depending more and more on “this” AI and don’t get a revolution in the AI field to replace the current one with AGI. Because in ten years we risk losing a big chunk of expertise and if we don’t have an AI that can really replace the current one with something that can actually replace experts then there will huge infrastructure problems across multiple industries.
The fact that he was even able to make that bet is incredible. How deluded do you have to be to think the AI bubble won’t burst?
Nobody believes the AI investment/growth trajectory we have right now will continue for infinity. What nobody knows is: when the correction will occur.
- Do you pull your investments out now and sit on the sidelines waiting for the fallout while your principal loses value daily from inflation?
- What does the correction look like when it happens? Does all the value evaporate on day 1, the first week, a month? This is important to figure out for this strategy to know when to go back in.
This is the info/decisions you’d need as an average investor. What Burry is doing is the riskiest type of investments with shorting the market. If growth continue to occur he and his fund will have to pay for the growth to those whose shares he borrowed to short.
In summary, its not enough to know that a bubble exists, but to profit from it you have to figure out when it will burst and when the full burst is done.
Rich dumbasses found a place to waste all their money instead of the government taxing them and using that money for important things. they let them waste it on some climate change accelerator
Everyone can see it coming, but they believe the AI companies’ hype that the AGI breakthrough will be here “soon”. Which if actually true, might be worth the bet.
For my money they either hit AGI and then we all die, or there is a crash before that. Yay.
