Isn’t this true of like everything AI right now?
We’re in the “grow a locked-in user base” part of their rollout. We’ll hit the “make money” part in a year or two, and then the enshittification machine will kick into high gear.
I doubt it, LLMs have already become significantly more efficient and powerful in just the last couple months.
In a year or two we will be able to run something like Gemini 2.5 Pro on a gaming PC which right now requires a server farm.
We’re in the “grow a locked-in user base” part of their rollout.
An attempt at that. It will be partially successful but with AI accelerators coming to more and more consumer hardware, the hurdles of self-hosting get lower and lower.
I have no clue how to set up an LLM server but installing https://github.com/Acly/krita-ai-tools is easily done with a few mouse clicks. The Krita plugin handles all the background tasks.
Yeah, it’s basically like early days of cable, Uber, Instacart, streaming, etc. They have a lot of capital and are running at a loss to capture the market. Once companies have secured a customer base, they start jacking up the prices.
when this bubble pops it’s gonna be horrific.
google, meta, ms, so many more leveraged out huge investments in datacenters. nvidia is propping up whole segments of the fucking economy.
https://www.wheresyoured.at/ai-is-a-money-trap/
it’d be fun to watch if I could isolate myself from the chaos that will ensue, but we’re all gonna get fucked by the aibros, it’s only a question of which segment of the economy blows up first.
There is another factor in this which often gets overlooked. A LOT of the money invested right now is for the Nvidia chips and products based around them. As many gamers are painfully aware, these chips devalue very quickly. With the progress of technology moving so fast, what was once a top of the line unit gets outclassed by mid tier hardware within a couple of years. After 5 years it’s usefulness is severely diminished and after 10 years it is hardly worth the energy to run them.
This means the window for return on investment is a lot shorter than usual in tech. For example when creating a software service, there would be an upfront investment for buying the startup that created the software. Then some scaling investment in infrastructure and such. But after that it turns into a steady state where the input of money is a lot lower than revenue from the customer base that was grown. This allows to get returns on investment for many years after that initial investment and growth phase.
With this Ai shit it works a bit different. If you want to train and run the latest models in order to remain competitive in the market, you would need to continually buy the latest hardware from Nvidia. As soon as you start running on older hardware, your product would be left behind and with all the competition out there users would be lost very quickly. It’s very hard to see how the trillions of dollars invested now are ever going to be recovered within the span of five years. Especially in a time where so much companies are dumping their products for very low prices and sometimes even for free.
This bubble has to burst and it is going to be bad. For the people who were around when the dotcom bubble burst, this is going to be much worse than that ever was.
yeah datacenters never really aged well, and making them gpu dependent is going mean they age like hot piss. and since they’re ai-dedicated gpus, they can’t even resell them lol.
all this investment, for what? so some chud can have a picture of taylor swift with 4 tits?
fucking idiots
Who with what?
Hmm.
BBIAF.
FOUR TITS!? fuck whatever reservations I had, that’s worth it!
I don’t see why they can’t be resold. As long as there’s a market for new AI hardware, there will continue to be a market for the older stuff. You don’t need the latest and greatest for development purposes, or things that scale horizontally.
I didn’t say they couldn’t be resold, they simply won’t have as wide a potential user market like an generic GPU would. But think about it for a sec, you’ve got thousands of AI dedicated gpu’s going stale whenever a datacenter gets overhauled or a datacenter goes bust.
that’s gonna put a lot more product on the market that other datacenters aren’t going to touch - no one puts used hardware in their racks - so who’s gonna gobble up all this stuff?
not the gamers. who else needs this kind of stuff?
I’m not sure that they’re even going to be useful for gamers. Datacenter GPUs require a substantial external cooling solution to stop them from just melting. Believe NVidia’s new stuff is liquid-only, so even if you’ve got an HVAC next to your l33t gaming PC, that won’t be sufficient.
not just those constraints, good luck getting a fucking video signal out of 'em when they literally don’t have hdmi/dp or any other connectors.
They’ll write this off as a loss and offset their corporate taxes
Also china is a great example that you do not need all the latest hardware, but it does help
Came here to see if someone had mentioned Ed Zitron’s blog. His last two pieces on the AI bubble are fantastic reads.
pretty sure someone here linked it, it’s a long read and worth it.
Any chance you have a link,?
Damn. We’re looking at another recession when this bubble bursts, aren’t we?
Just great.
recessions work themselves out. I’m worried it’ll pitch us into a worldwide depression coupled with trump’s tarriff bullshit.
it’s the 1920s all over again. smoot hawley fascists and clouds of war
Thanks buddy!
The electrical industry is going to have a real bad time.
yeah secondary knockon effects - once nvidia realizes it’s not going to actually sell 5 gpus per human being, the datacenters for them evaporate, then the power production to feed those datacenters becomes pointless…
an effective administration would mandate all renewable energy for this purpose, so when it implodes they could at least derive a benefit from the expanded production… but no, trump will have them build coal plants for it all. or like grok, methane powered generators fml
Hopefully sooner rather than later, and maybe Elon can stop poisoning a neighborhood in Memphis with Grok
yeah that’s one of the more egregious examples, basically a methane factory that eats prodigious amounts of water and power, all in process of giving us MECHAHITLER.
what’s not to love?
Yeah I’m getting real dot com bubble vibes from all of this.
Man I cannot fucking wait until this stupid goddamn bubble pops
Im so tired of this stupud fucking refrain. Cause we all know how housing got so mich better after 08 and how we dont have any more dot coms and how the internet got so much better since that bubble. You people have no idea what your even asking for.
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And what happens when a bubble bursts? Did the internet die when the dotcom bubble burst, or is that just when it really started to get going?
I share most of your sentiments against AI, but a bubble popping won’t make it go away, and it won’t even rectify it to be more to people’s likings (i doubt it). It takes more than just waiting around to accomplish that.
This is the thing I don’t understand about businesses like Cursor. They take two other companies products (Claude and VS Code) and smash them together and sell the result at a loss. How is that much of a business when basically what you’ve got is something that could have been a VsCode plugin.
You disrupt the market and wait until someone buy you out for huge woads of cash
Yes, this is part of the business model. The goal is to get everyone addicted to their service, then jack the price up to profitable margins. It’s the same model Netflix and Amazon used. Bothe services lost money for over 10 years before becoming profitable.
Venture capitalism is what it’s called, I think
Venture capitalism is when you give somebody money to start a business in hopes that they make it big, giving you really valuable equity for relatively little money. What you’re thinking of is blitzscaling. Scale up in an unsustainable way in order to gain market dominance, so that you can use that to become profitable.
You are correct. However, you can only really blitzscale with VC backing.
It is not venture capitalism. Though it is fueled by venture capitalism. I am describing the type of car and you are calling it gasoline. They’re most distinctly not the same thing.
However it should be noted there both a part of the same corrosion of our society. Just how automobiles that run on gasoline are a corrosion on our atmosphere.
YouTube as well.
Isn’t this just the tech industry. Run at a loss. Eat VC money. Wait. Wait.
Some how you become normalized and suddenly important Next thing you know you’re raking profit.
Like the guy that has no friends who nobody really likes. He won’t go away. He just sticks around. Nobody ever told him to fuck off. So he’s just part of the group.
Yep, and they were helped a lot after the 2008 financial crisis when interest rates were dropped super low and loans were cheap. That’s a major reason why the market has been screaming for the fed to cut the interest rate as much as possible.
Basically, the only reason some of these vaguely functional AI tools actually work okay is because they haven’t been ruined with inevitable monetisation yet.
When this bubble eventually bursts, and it will, the economic fallout is going to be catastrophic.
So much of the AI stuff we see today are boards reacting and worrying about being “left behind” in AI. In many cases, the goal is not to deliver value. The goal is to be able to attach a little sticker that says “AI” to their products to excite the shareholders.
Unfortunately in this case, some of the largest companies in the world haven’t been able to figure out how to run AI services at a profit.
This could change any day if some more efficient hardware arrives, but until then, most of the software world is just crossing their fingers it becomes profitable one day while they light dollar bills on fire in their datacenters.
If this isn’t “bubbleish” behavior I don’t know what is.
I was in a local bike store looking at red tail lights yesterday.
One brand Lezyne had several versions. There was an “AI Alert” one. I looked it up and it just has a sensor to detect when you brake and it changes to a different flashing mode at that time.
Thats barely even “smart” let alone “AI”.
The stupid thing is, because of this dumb claim they needed to confirm that it doesn’t collect and transmit any data about your riding habits. Its a light with no connectivity other than a charging port.
The dumbfuckery is astonishing.
the day that these guys need to turn a profit will be the day that a lot of people lose access to this sort of thing
Good. Costs is the key point to get rid of it.
So what I am learning is that I should start vibe coding even the small scripts that are less than 10 lines.
Done. I will start doing that.
Now I’m suddenly tempted to start using it. or at least coming up with a bot to keep it busy.
good, everyone flood the AI with useless tasks so they go bankrupt
Caveat: this applies to literally every new technology especially in the VC funded world.
