[wowohwow]

History doesn't repeat itself, but it rhymes. Callbacks to the infrastructure laid out during dotcom bubble, i.e Cisco, and all of the networking infrastructure. Likewise, internal memos at Oracle indicate they're losing money on their hardware. Anecdotal and hand wavy; but there are plenty of signals out there that it won't pay off. I'm not arguing one way or the other, but there are plenty of arguments for it to not succeed in a way that's required to justify the mind boggling growth we've been experiencing.

[simianwords]

The mind boggling growth you should also focus on is consumer demand of LLMs. Can you account for it and then re-analyse?

[overfeed]

Surely, Oracle could make up for its unit losses with volume, just like SNL's "Change Bank"

[wolfie69]

Lol CityWide Change Bank. I was nervous because I was running out of change, then I saw a CityWide Change Bank up ahead. She went to CityWide Change Bank to get exact change for the toll, "to save time".

[simianwords]

why do you assume unit losses? they can just price it a bit higher

[wongarsu]

The technology obviously has merrits. When the bubble pops LLMs won't go away, just like the dotcom crash didn't spell the end of the internet.

The issue isn't that there aren't good business models or value creation, it's that anything related to AI currently has valuations that are unsustainably high given the current limits of the technology. That leads to economic activity that just couldn't exist without those valuations. And once the hype cools down the valuations will go closer to reality, leaving a lot of companies unviable, and many more will have to severely cut back spending to remain viable.

Or maybe the entire AI market pulls a Tesla and just stays at valuations that aren't justified by normal market fundamentals. Or maybe the technology adapts fast enough to keep up with the hype and can actually deliver on everything that's promised. This doesn't have to come down, it's just very likely that it will.

[re-thc]

> internal memos at Oracle indicate they're losing money on their hardware

That doesn't mean much does it? Oracle is a huge company. Not just a cloud either. Companies often offer discounts or promotions; so? There could be plenty of managed services, managed databases, CRM and many more that make up for it.

Whilst I'm not sure if Oracle's stock price is right - the memo was more like a way to pressure the stock down for whatever reason.

[mike_hearn]

History doesn't necessarily repeat nor rhyme. For 15 years now there have been people wrongly calling a bubble. The justifications change but looking back we can say they were wrong - or at least, a "bubble" that never pops and people get bored of talking about might have just been actual, real economic growth.

September 2020: 2020 Tech Stock Bubble (Sunpointe Investments, tech in general)

https://sunpointeinvestments.com/2020-tech-stock-bubble/

August 2017: When Will The Tech Bubble Burst?" (NY Times)

https://www.nytimes.com/2017/08/05/opinion/sunday/when-will-...

March 2015: Why This Tech Bubble is Worse Than the Tech Bubble of 2000 (Mark Cuban, bubble is social media)

https://blogmaverick.com/2015/03/04/why-this-tech-bubble-is-...

May 2011: The New Tech Bubble (Economist, bubble is "web companies")

https://memex.naughtons.org/where-angels-dare-to-tread-the-n...

And of course I haven't even bothered listing all the people who said cryptocurrency is a bubble. That's 15+ years of continuous bubble-calling.

At some point you have to say that if the thing supposedly inflating the tech bubble changes four or five times over a period that lasts a big chunk of a century, then maybe it's not a bubble but simply that economic growth comes from only two sources: a bigger population and technological progress. If technological progress becomes concentrated in a "tech industry" then it's inevitable that people will start claiming there is a "tech bubble" even if that doesn't make much sense as a concept. It's sort like claiming there's a "progress bubble". I mean, sure, there can and will be bankruptcies and retrenchments, as there always are at the frontier of progress. But that doesn't mean there's going to be a mega-collapse.

[fragmede]

Similarly, economists have predicted 9 of the past 7 recessions.