I had the same thoughts as much as 2 years ago on how this will play out. Unlike with railroads and fiber optic cable however, the core infrastructural asset of GPUs tends to become rapidly obsolete after about 5 years.
Commoditization of this scale of compute is definitely going to be a boon for many fields of research. Unfortunately fundamental public research is exactly what is being cut right now in the US.
Long term, I think the real winners are going to be in robotics. Still an unsolved field, but Waymo proves that even a nearly 20 year slog to the finish line is viable. And robotics infrastructure may be more robust to obsolescence than the underlying compute. I find it odd so many companies are making humanoid robots though... Over engineering that reeks of bubble economics and possible fraud.
ehnto · 51m ago
I think the allure of humanoid robots is that they are drop in replacements for agents in a world desgined for humans.
If you want your robot to be a helper around the general populations houses for example, you would aim to make a general purpose bot capable of stairs, ladders, lying down, reaching high, stepping over things, holding awkward weights and loads while doing all of the above. Pinch, twist, push, pull, in all degrees of motion a human has etc.
dijit · 47m ago
The half-life of iron is pretty low too, the advantage of the rail system is what it allowed us to do when it was cheap enough.
All the investment in AI should help bring infrastructure up to a higher level, power distribution and cooling for example are at a much higher level than would have otherwise been.
Who knows what use that might have if it suddenly becomes incredibly cheap.
(this is my silver lining thinking)
willvarfar · 50m ago
Yes the thing that might be missed in the point about how the big buildout of GPU compute is going to be the backbone of the future etc is that, unlike railroads and dark fibre, the GPU compute gets obsolete really really quickly. So it's not the same.
I had a friend who got a Sun cluster for basically free when the 2000 dot com bubble burst. And when we were doing recreational math contests a couple of years later it was slower than our laptops.
So it is very likely that a load of today's GPU compute is very competitive next year or the year after?
The AI bubble bursting will kill investment in the next gen hardware in the west.
But china will come to market with its first gen that it is currently building to replace its dependency on the west and will leapfrog the west etc. China isn't really completely dependent on competing in our AI bubble, its using AI for its own things and will plough on even when the west bubble bursts. Seems obvious?
Still, there has been so much talk about the AI bubble bursting last week and this is the the best writeup.
Negitivefrags · 34m ago
I do agree with you, but I think there a non-zero chance the situation might be different now.
We are not getting the same insane gains from node shrinks anymore.
Imagine the bubble pops tomorrow. You would have an excess of compute using current gen tech, and the insane investments required to get to the next node shrink using our current path might no longer be economically justifiable while such an excess of compute exists.
It might be that you need to have a much bigger gap than what we are currently seeing in order to actually get enough of a boost to make it worthwhile.
Not saying that is what would happen, I'm just saying it's not impossible either.
xg15 · 1h ago
> The speculation democratized investing in a way never seen before. Clerks, shopkeepers, and domestic servants, people who had never owned stocks before, mortgaged their homes and borrowed money to buy railway shares.
I like the term "democratize investing" here. "We're granting the masses the privilege of dumping their lifesavings into this overhyped project, so we can make a clean exit".
aurareturn · 15m ago
FYI, Altman also said OpenAI is planning to invest “trillions” into AI in the “near future”. He said this at the same time as saying AI is bubbly.
This article is based off of the Altman bubbly comment.
xg15 · 7m ago
Self-contradictory communication seems to become his style.
"AI is an existential risk for humanity, that's why we have to dump all resources we have into building it".
"It's critically important that AI as an industry is regulated, but also we'll pull out of the EU if they try to regulate us"
ivape · 12m ago
He’s saying it’s bubbly because he can’t get good prices to buy out startups. He’s a buyer, first and foremost. No one wants to have to pay $20bn for some of these companies. They don’t believe it’s a bubble on any level, and I do think anyone in involved sees it as an infinite investment until the very end of the world (not kidding). It’s the end-game for software tech, especially if you are willing to be humbled by what stuff like Genie3 will become.
There is absolutely nothing else left to invest in when it comes to software development, this is it.
raldi · 50m ago
> Anthropic raised $450 million at a $4.1 billion valuation despite negligible revenue
What year is this from? The author might want to do a recent news search.
aurareturn · 13m ago
Isn’t Anthropic worth hundreds of billions by now and their revenue is doubling every 6 months?
FinnLobsien · 44m ago
I think this is directionally correct. But we tend to remember the technologies which became mainstream after the bubble burst and forget those that fizzled or found a much less world-changing niche.
Blockchain, NFTs and 3D printing are still around and have vacuumed up billions and billions without the average person being able to tell an impact on their lives.
Ekaros · 40m ago
VR is good example of money being burned and middling adoption to a not that big population. For average person it has ended up something cool, but in the end not common and forgettable. And I am not sure if it even was a bubble, but selected players just investing in it.
FinnLobsien · 27m ago
Exactly. Right now it’s easy to look at it as a relatively niche thing.
But at the time it was going to be the next big thing transforming everything.
Same as 3D printing. Certainly cool and useful in some niche contexts, but it has not disrupted manufacturing.
ivape · 39m ago
Influencers, streamers, crypto …
Housing is back …
Dotcom came back…
Nothing was a bubble. Dotcom was into a new paradigm shift with mobile in less then a decade. These aren’t even significant timelines when you think about it.
So you pull out of the AI hype today, fine. These past recent bubbles show that everything ramps back up within five years.
AI-is-hype people are delusional. The computer has never been able to do what it’s doing today. We could only dream of it.
WA · 18m ago
> AI-is-hype people are delusional. The computer has never been able to do what it’s doing today. We could only dream of it.
Sure, but do the math. It doesn’t work out yet. This stuff burns money and energy. Either revenue has to go up A LOT or costs do have to come down A LOT (or quality has to suffer by using smaller models).
kortilla · 17m ago
Eventually coming back doesn’t mean it wasn’t a bubble that popped.
spaceman_2020 · 41m ago
Mostly agree with the author. But I also believe that this is very emergent tech and we’re still figuring out the best way to actually make use of it
The clearest example is in AI generated visual content. If you dig through what people are doing, its clear that only a very small % of users are actually getting truly high-quality, ready-for-production content, while the rest are just prompting in pure slop. There is a skill level to this that hasn’t really permeated the mainstream
Once that happens, we might see some of that 95% waste figure change to, maybe, 50% waste
hahahacorn · 48m ago
I recently gave an unprompted tirade about bubbles creating pockets of fake economic activity with no “real” economic output or value creation tied to them, and how sometimes, the circulatory systems in those bubbles feed into themselves.
E.g. someone borrowing against their higher property value(s) to put a down payment on another property.
Leverage is the amplifier. And I don’t see many self-circulating capital flows. I expect contractions to be reasonable for this bubble, or more realistically industry stagflation.
Commoditization of this scale of compute is definitely going to be a boon for many fields of research. Unfortunately fundamental public research is exactly what is being cut right now in the US.
Long term, I think the real winners are going to be in robotics. Still an unsolved field, but Waymo proves that even a nearly 20 year slog to the finish line is viable. And robotics infrastructure may be more robust to obsolescence than the underlying compute. I find it odd so many companies are making humanoid robots though... Over engineering that reeks of bubble economics and possible fraud.
If you want your robot to be a helper around the general populations houses for example, you would aim to make a general purpose bot capable of stairs, ladders, lying down, reaching high, stepping over things, holding awkward weights and loads while doing all of the above. Pinch, twist, push, pull, in all degrees of motion a human has etc.
All the investment in AI should help bring infrastructure up to a higher level, power distribution and cooling for example are at a much higher level than would have otherwise been.
Who knows what use that might have if it suddenly becomes incredibly cheap.
(this is my silver lining thinking)
I had a friend who got a Sun cluster for basically free when the 2000 dot com bubble burst. And when we were doing recreational math contests a couple of years later it was slower than our laptops.
So it is very likely that a load of today's GPU compute is very competitive next year or the year after?
The AI bubble bursting will kill investment in the next gen hardware in the west.
But china will come to market with its first gen that it is currently building to replace its dependency on the west and will leapfrog the west etc. China isn't really completely dependent on competing in our AI bubble, its using AI for its own things and will plough on even when the west bubble bursts. Seems obvious?
Still, there has been so much talk about the AI bubble bursting last week and this is the the best writeup.
We are not getting the same insane gains from node shrinks anymore.
Imagine the bubble pops tomorrow. You would have an excess of compute using current gen tech, and the insane investments required to get to the next node shrink using our current path might no longer be economically justifiable while such an excess of compute exists.
It might be that you need to have a much bigger gap than what we are currently seeing in order to actually get enough of a boost to make it worthwhile.
Not saying that is what would happen, I'm just saying it's not impossible either.
I like the term "democratize investing" here. "We're granting the masses the privilege of dumping their lifesavings into this overhyped project, so we can make a clean exit".
This article is based off of the Altman bubbly comment.
"AI is an existential risk for humanity, that's why we have to dump all resources we have into building it".
"It's critically important that AI as an industry is regulated, but also we'll pull out of the EU if they try to regulate us"
There is absolutely nothing else left to invest in when it comes to software development, this is it.
What year is this from? The author might want to do a recent news search.
Blockchain, NFTs and 3D printing are still around and have vacuumed up billions and billions without the average person being able to tell an impact on their lives.
But at the time it was going to be the next big thing transforming everything.
Same as 3D printing. Certainly cool and useful in some niche contexts, but it has not disrupted manufacturing.
Housing is back …
Dotcom came back…
Nothing was a bubble. Dotcom was into a new paradigm shift with mobile in less then a decade. These aren’t even significant timelines when you think about it.
So you pull out of the AI hype today, fine. These past recent bubbles show that everything ramps back up within five years.
AI-is-hype people are delusional. The computer has never been able to do what it’s doing today. We could only dream of it.
Sure, but do the math. It doesn’t work out yet. This stuff burns money and energy. Either revenue has to go up A LOT or costs do have to come down A LOT (or quality has to suffer by using smaller models).
The clearest example is in AI generated visual content. If you dig through what people are doing, its clear that only a very small % of users are actually getting truly high-quality, ready-for-production content, while the rest are just prompting in pure slop. There is a skill level to this that hasn’t really permeated the mainstream
Once that happens, we might see some of that 95% waste figure change to, maybe, 50% waste
E.g. someone borrowing against their higher property value(s) to put a down payment on another property.
Leverage is the amplifier. And I don’t see many self-circulating capital flows. I expect contractions to be reasonable for this bubble, or more realistically industry stagflation.