[827a]

The nasdaq composite p/e at its peak during the dotcom bubble breached 200.

Today we're at 40, and Nvidia alone is at 49.

As much as everyone wants this to be a bubble: it isn't. ChatGPT was the fastest "thing" in history to reach 100M MAUs, and is believed to be a top 5 most visited website today, across the entire internet. Cursor was the fastest company in human history to reach $500M in revenue. Midjourney, the company no one talks about anymore, is profitable and makes over $200M in revenue.

Being brutal here: HackerNews is in the bubble. Yeah, there's some froth, there's some overvaluation, some of these companies will die. But I seriously do not understand how people can see these real, hard statistics, not fake money like VC dollars or the price of bitcoin but fucking deep and real shit and still say "nah its like crypto all over again".

48% of survey respondents to a recent survey said they've used ChatGPT for therapy [1]. FORTY EIGHT PERCENT. There is no technology humanity has ever invented that has seen genpop uptake this quickly, and its not dropping. This is not "oh, well, the internet will be popular soon, throw money at it people will eventually come". This is: "we physically cannot buy enough GPUs to satisfy demand, our services keep going down every week because so many people want to pay for this".

[1] https://sentio.org/ai-blog/ai-survey

[hijodelsol]

S&P 500 P/E is 30 and historically used to be much lower. Some of it can be surely attributed to increasing inequality and increased wealth of the hyperwealthy who have no other option than to store their money in stocks absent a hypergrowth market, even at lower expected profit. But "growth" can only so long serve as an argument to justify a 40-50 P/E vs. a 25-30 as in other parts of the stock market. If that growth stalls, there is a lot of room to fall, even if the companies will still be profitable and won't go under. Ed at no point claims that Nvidia, Microsoft or Google would cease to exist as companies, as they can of course be very profitable in smaller markets than those that are currently being priced in and without AI contributing to revenue. But companies that purely rely on AI for revenue will have a hard time to ever turn a profit and there is not a single example to proof otherwise. And if that happens, you might also see -20%, -30% or more on some of these larger players that will survive.

[tim333]

>we physically cannot buy enough GPUs to satisfy demand

is caused by mispricing - VC money is used to pay for the GPUs but the product is mostly given away for free. If companies just charged the public what the service cost to provide usage would go down dramatically.

[827a]

If they had to actually fund R&D and footprint expansion with customer money: Absolutely yes. But, that's exactly what VC money is for. If VC money can cover expansion while customer money can cover per-token incremental costs, eventually they won't need to expand quite as much, and then profitability should catch up.

In other words: How literally every tech business that has ever worked has worked. This isn't news. This isn't novel. This is just how it works.

If you want me to feel fright that the world is coming to an end, wake me up when Google (one of the world's largest frontier AI labs by any measure) isn't posting $35B in profit on a 39% gross margin every quarter, or when Meta (who is reported to be paying AI researchers nine figure comp packages) isn't making $16B on 40%. The amount of money these companies make is disgusting, its so disgusting that they can blow a hundred billion on GPUs and key people, they could write it all to zero two years later, and its all a teeny tiny little blip on their graphs, it becomes the third line-item in their quarterly board meetings, behind far more important stuff. The reason why some of you get so freaked out is because you literally cannot comprehend the scale these companies operate at, and how financialized their operations are.

[troupo]

> But I seriously do not understand how people can see these real, hard statistics, not fake money like VC dollars

You're commenting this under an article showing how deeply unprofitable most of "AI" companies are. Revenue isn't profit. Midjourney is probably the only company that is profitable.

> 48% of survey respondents to a recent survey said they've used ChatGPT for therapy [1]. FORTY EIGHT PERCENT.

No idea why you provide this frankly scary statistic. It's not proof that this isn't a bubble.

> This is: "we physically cannot buy enough GPUs to satisfy demand, our services keep going down every week because so many people want to pay for this".

It's called a mania. Manias always end.