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by datadrivenangel 807 days ago
$11M in revenue on $153M in cloud spend + salaries...

Is the AI bubble going to pop hard soon?

5 comments

>Is the AI bubble going to pop hard soon?

No. I think it's going to get way bigger. When it pops, it will still be bigger than February 2024.

Right now, the companies making money are Microsoft, OpenAI, AI chip makers. Google might join soon if they get their act together. Apple as well.

Basically, only existing large tech companies + OpenAI are making money so far.

However, I expect newer AI-only startups, to start making money in the near future. For example, I can see a company like Devin AI get loads of revenue very quick such as when ChatGPT launched.

As for open source AI companies like Stability, they're in trouble.

Unfortunately, no one has figured out how to make money with open source AI. It used to be that you'd open source your tool, get adoption, then offer a cloud. With open source AI so far, this hasn't come true for whatever reason. Perhaps we're just early.

AI is not a bubble. Anymore than iphone / the internet was a bubble.
You have no way of knowing that. Remember, the parent poster is referring to the current ridiculous hype + push of current AI. Current AI models were trained on copyrighted material. Lawsuits are taking place.

Many different members of the US government have indicated that just because AI is new and fancy, does not mean companies get to violate established law, including copyright. The head of the FTC was the most recent person to state this.

OpenAI could very likely be sued out of existence. When that happens, all who invested in them could lose billions. The US government very likely won't intervene because there are multiple lessons to be learned from this.

Courts are there to enforce the law, regardless of how "amazing" a technology may appear.

To add something I forgot to say, yes, AI as a concept is here to stay. The current hype surrounding existing companies will not, however.
The internet was a bubble too. Remember the dot com era?

Just because the tech is legit doesn’t mean it can’t have a bubble.

> Anymore than iphone / the internet was a bubble.

By that do you mean they're technology platforms that outlive their obvious peak hype investment dice rolls?

As a broad advancement that's true, but on individual companies there's going to be a ton that don't make it (which is the case for all companies, but for AI there's a significant number of new ones to fail within the next 10 years).
Do you know what a bubble is?
Except that they're not talking technology, they're talking economics. It may be significantly to earn a profit on selling an iPhone than selling continued AI access at a reasonable price.
So where's the revenue?
At companies with a business plan like Midjourney, which has 200M in revenue, 40 employees, and no investors.
MS is pushing hard with copilot for $30/user/month (annual commitment... I see they've learned from Adobe, sigh).
OpenAI, Microsoft, Google, and other companies who have existing products and added AI, such as Notion and Adobe.
Then where's the use case?
and yet there was a dotcom bubble.
I think it will just shift away from relying on cloud providers for the underlying infrastructure.
If the big AI companies go under there could be a lot of cheap second hand H100s on the market.
We’re very far away from H100 firesales. Pretty sure capacity is booked out for years in advance still so even if it is a bubble and pops they’re unlikely to feature on eBay
Yeah. Looks like the gods demand one last AI winter.
Rookie numbers. How much did Uber lose? Wirecard?
Wirecard was a fraud, not a bubble.
*In a ZIRP environment.