[bdangubic]

the investments are being made by massively profitable companies (our biggest and brightest ones, the ones that have been carrying the economy for quite some time now, even before "AI"). even just in recent history we have seen companies making large investments and being very unprofitable until they weren't anymore (e.g. Uber). and it is always the same story, everyone is up in arms "this is not sustainable etc..."

whether or not these companies can turn a profit - time will tell. but I am betting that our massively profitable companies (which are biggest spenders of course) perhaps know what they are doing and just maybe they should get the benefit of the doubt until they are proven wrong. but if I had to make a wager and on one side I have google, microsoft, amazon, meta... and on the other side I have bunch of AI bubble people with a bunch of time to predict a "crash" I'd put my money on the former...

[arctic-true]

The fact that the companies that have already shoveled billions of dollars at this are continuing to do so is equally consistent with AI improvement and adoption stalling as it is with infinite improvement and widespread adoption. Yes, it’s irrational to chase sunk costs - but unlike the VC funds that backed Uber and its competition, may of the players in this game are exposed to public markets, which are not known for being rigorously logical. If you pull back on your AI investments, the markets will punish you - probably vigorously - and if your only concern is the value of your stock options, it is entirely rational for you to act in a way that keeps the market from punishing their value. We’re 3 years in without showing any ROI, and who’s to say we can’t get 3 or 5 or 10 more? Plenty of time to cash out before the eventual reckoning.

[bdangubic]

> If you pull back on your AI investments, the markets will punish you - probably vigorously

quite the opposite is happening as evidenced from last earnings reports…

[arctic-true]

There is definitely growing hesitancy in the market, but pulling back at this juncture could set off a full-on race to the bottom, because it would disprove the original point (“all the smart tech companies are all-in, so there must be profit at the end of the tunnel”). Right now, they can point to the skeptics as bears or doomers or whatever. The first big tech company to drop its capex will pierce the aura of invincibility and make the moderate retreat from the exuberant highs of late 2025 look like a blip on the radar.

[jsheard]

I'd maybe think twice about assuming Meta knows what they're doing after they just pissed $75 billion up the wall on a Metaverse dream that went nowhere.

[testbjjl]

Pissed it away, but Zuckerberg is richer than ever and so are his stockholders it seems. I can’t imagine doing it, but also can’t imagine running Meta.

[bdangubic]

if it was just Meta perhaps I’d think twice but it is not just Meta, it is all of them

[albatross79]

"The lemmings can't be wrong, they're all doing it". I think you're overlooking the incentive structures here.

[bdangubic]

I am certainly not saying that this can’t all come crashing down for the big boys, surely it can. I just am putting a little more weight on them than on people on the internet and doomsdayers hunting for clicks is all

[leetrout]

I just keep thinking about SGI and, to an extent, Sun. Couple missteps and a couple innovations in the commodity direction and it will start having a negative effect.