If you want to know whether artificial intelligence is a gigantic economic bubble, don’t just take pundits’ word for it. Major investors are now moving their money to try to protect themselves from the AI bubble popping.

cross-posted from: https://lemmy.ml/post/54396848

If you want to know whether artificial intelligence is a gigantic economic bubble, don’t just take pundits’ word for it. Major investors are now moving their money to try to protect themselves from the AI bubble popping.

For an industry that we’re told is central to our collective future, the artificial intelligence (AI) industry increasingly seems to be built on a combination of artificially inflated hopes and bad accounting.

The industry’s critics have been raising concerns about its finances for a while: the fact that most of its flagship firms are grossly unprofitable, that they’ve had to jack up their prices to try break even (leading their business customers to pump the brakes on using their products), or that many of the eye-popping investment announcements that are meant to show demand for AI is strong have actually been circular financing — meaning different AI firms cycling money to and from each other.

But none of it has seemed to slow the industry’s boom or the relentless hype machine behind it. Until now, anyway. It used to be that you mostly heard concerns about the industry’s underlying economics in newspapers, blogs, social media posts, and podcasts, and that those concerns went completely unreflected in the markets. But these concerns seem now to have finally bled over into investors’ thinking.

  • Ech@lemmy.ca
    5·
    3 days ago

    I don’t think businesses want the overhead, but maybe some will. The capabilities will be much lower, though. The subsidized costs are high because of the hardware and power needed to generate the content it does. Companies willing to upgrade to comparable hardware and oversight would probably be just as willing to pay a higher subscription. Also, I would hope any company considering it would be able to see by then that the results aren’t worth the costs.

    • altkey (he\him)@lemmy.dbzer0.comEnglish
      2·
      3 days ago

      I am now wondering how would it be nicer to have a local scheduled solution, an LLM as an office printer. Slow moving common queue that makes people get more conservative in their LLM usage, plan it’s rent for themselves, send inputs to have outputs later that day. Some inconvinience to tone down hardware costs and establish a more mindful consumption.

      It could be fun to run experiments with that as one of test groups, and others unlimited or limited in some way, to compare how people adapt and how it affects workflows.