[muzani]

Bubbles happen when a) someone buys something where they don't understand the value to, b) sell it off to another sucker who also doesn't understand the value.

If a is not true, the prices will fall to their value. If b is not true, overpriced goods don't move, and the price doesn't blow up as fast as it does.

Yes, they increase productivity, but how much? Is OpenAI really contributing a trillion dollars of value to the world? A thousand billion, a million million. 50 billion months of a $20 subscription. 80 million lifetime subscriptions of $20/month. That much value?

[atleastoptimal]

The valuation of a company != an approximation of how much it is contributing to the world, it's more of an estimated total future potential value, a market aggregate of demand for a piece of it.

I would say that the valuation of OpenAI et al exceeds a normal multiplier based on how much productivity it is contributing, but much of its value is based on the premise that the improvements to its models that have occurred in lockstep over the past 5 years won't just suddenly stop, and will continue for at least as long as the underlying compute for training scales.

All AI companies are selling are tokens, which aren't really a speculative asset in that they are consumed at the moment of inference. The question is whether this token of intelligence has a multiplicative effect on the applications towards which it is directed, which currently I believe many companies are seeing positive signals towards, which is why their revenues are accelerating so much so fast.