[zkmon]

Ed's posts always sing the same tune - AI spend is unsustainable. But why are the investors pouring into these megacorps allowing them to burn cash? What calculations are the investors making? I would like to see those projections, assumptions and backout plans.

[yason]

Why bubbles happen? Because investors, out of greed, pour into corporations that burn their cash.

The internet was a bubble: you could make a web page and sell it for millions because next year it was going to be worth billions. And then internet grew up.

AI is technology that's still beginning to find its place to settle. It's far from mature and that's perfectly fine. We'll have reached a reasonable plateau once the technology and the related stack stops changing every month and instead develops incrementally and boringly over the span of few years. That's like internet in the 2008-2010, and many investors will have a collection of new burn marks by that time.

Not only financially there's an unsustainable push for AI by the zealots du jour who are more often than not managers rather than engineers. AI is championed most ruthlessly as a silver bullet revolution by people who least grasp the limitations of AI. It'll take some time to figure out the dreamed-up proceeds won't be there, and "then what?".

I predict that the real bottlenecks of development will re-emerge as soon as the limitations of AI will manifest out of the hype. They bottlenecks are human-based, in development processes and in human interactions. A large part of development is trying to understand what we want and what we need and you can't offload that to AI.

[fodkodrasz]

The idea is the same as in all hype cycles: Ride the wave and let the small investors hold the bag in the end.

[ndsipa_pomu]

I suspect that it's merely a long-shot bet that AI/LLMs will drastically change the nature of the world's economy and workforce. If there's only a 0.1% chance of that happening, but promises a chance of giving out 10,000% the return, then it kind of makes sense.

[efficax]

investors are driven by herding behavior. for people with enormous amounts of capital to invest, the worst thing would be for them to miss out on the next big thing. If that means losing on a bunch of bets that did not turn out to be the next big thing, that's fine, so long as you don't miss out on whatever that next big thing is. We're promised AI is the next big thing, and everyone else is throwing money at it. So that means I have to throw money at it, because otherwise I would miss out.

[lelanthran]

Greater fool theory, obviously :-/