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.

  • Dispassionate@quokk.auEnglish
    9·
    2 days ago

    I think technology will catch up and AI models will improve to the point where we have whatever ChatGPT is using at the time of this comment running locally on regular hardware.

    That’s not saying the industry will die out of course, just that homegrown will be a real option.

    But that’s not solving any real problems.

    • NekoKoneko@lemmy.world
      7·
      1 day ago

      That isn’t really compatible with this timeline because these companies are spending trillions of dollars building data centers, which serendipitously is extinguishing any hope of buying local AI hardware by cornering the market for GPUs, RAM, CPUs and both solid state and platter hard drives.

      The implication of this all is that we will rent compute and run nothing locally. If hyperscalers succeed, that is the only way they make their money back. And if we will be able to afford local AI hardware, that also means they must fail.