The air is hissing out of the overinflated AI balloon There tend to be three AI camps. 1) AI is the greatest thing since sliced bread and will transform the world. 2) AI is the spawn of the Devil and will destroy civilization as we know it. And 3) "Write an A-Level paper on the themes in Shakespeare's Romeo and Juliet." I propose a fourth: AI is now as good as it's going to get, …
Just check retractionwatch and spot people who were labelled as exceptional talents and got a lot of funding and nice careers.
And then remove the possibility of retractions and the whole peer review process and let a chatbot calculate probabilities from undeclared (wonder why..) datasets and just step up the coercion until people just consider everything that is being calculated valid. What could go wrong?
AI has limited value as a user interface for search queries, for those who think that boolean is a South Pacific language.
It may have some use in niche circumstances. This will not be especially lucrative.
It is not reliable enough to be built into operating systems or software and should only be an option. That is, there should always be an 'off' button, or better yet, an 'on' button, so it is off by default.
AI has no investment value, as the ROI is negligible and the data centre costs are vast. Essentially, it is a luxury gimmick.
It is also a major security issue and should not be used on any secure, enterprise, government or military system. It is inherently unreliable, it may phone home and requests to it can be mined.
No sane person would invest serious money in AI.
If you do want to invest money, invest it in your security - no public internet access to your intranet, two systems per desk, lightweight/ephemeral data only on any internet linked system, reduce the amount of data you hold, store it on paper if you can. Use simpler software, which will be more reliable.
As for the AI rollercoaster, it was amusing. Time to move on to the next big thing, hopefully distributed systems, including distributed social media.
Nokia was doomed anyway. They missed the boat on moving to smartphones and their pivot to using MS Windows for Phones was a last ditch effort to remain relevant. As far as phones went at the time they weren't actually all that terrible, but Microsoft repeatedly and chronically kept fumbling the ball on their phone OS which doomed Nokia.
"No sane person would invest serious money in AI."
Not sure about that. Maybe not so much money and I think maybe differently. But you are looking at it, in a user context, as someone with a high IQ. Most of the population, for a number of disgusting reasons, not of their making, just want to be told what to do. AI or I prefer LLMs are a great development but they are not a panacea. Also, the crazy investment rush is a big gamble by the oligarchs because if someone really pulled it off they would rule the world. Well until their government sent people with guns to take it over so they could rule the world.
General AI as being built now seems just to be a pattern-spotting system optimised towards human languages. To my mind, optimising towards languages is a very silly way to go other than for demonstration and proof of concept purposes, because we already have very good human language systems out there now. These are known as human beings.
Pattern-spotting on other things by contrast is quite a good idea, but once again this is a specialised tool of limited real-world use.
I think a caveat here is that similar to the way the 'metaverse' tried unsuccessfully to claim games such as Roblox and Fortnite under its banner, the term 'AI' successfully encompassed all of the various machine learning tools that we have had for a long time now and are very useful. When these specialist machine learning systems, image recognition, large language models and reverse diffusion image generators are all being marketed as one single thing, they have been able to ride on the success of some of these systems to pay the capex on others.
I also think LLMs will have a bit more use than you suggest: I suspect a few legitimate uses exist somewhere, but there are also plenty of places where quality doesn't matter. For instance they are great at quickly generating tons of low quality but structurally solid text. There is certainly a market there. I would argue it isn't making anything better for humanity, but there are those willing to pay small amounts to do it and you probably don't need to train the most effective models to support spam. Image and video generation also only needs to be good enough to flood social media. Maybe that has long-term negative effects on those networks (financial effects, other negative effects are a given.) but I think a market persists there for now. I think these markets will persist to some extent.
I know a depressing number of people who use and trust AI when they shouldn't, and they have jobs and lives where they are sufficiently padded from the consequences of their mistakes and misunderstandings that they will simply continue to do so. I am sure that remains a market. Some portion of people will sacrifice almost anything for convenience, Hopefully that market doesn't increase until the people and systems they unknowingly rely on collapse.
Of course the insane valuations and spending we have seen have been based on the idea that 'AI' was going to replace people. That companies would be able to lay off a major percentage of their workforce, and finally downgrade others in white collar sectors to 'unskilled' labor. That is the only justification for the spending we have seen, and I think people are increasingly waking up to the fact that these technologies we have today simply do not do this. So the bubble will burst and the dust will settle and we will see what remains.
"and finally downgrade others in white collar sectors to 'unskilled' labor"
When was the last time you saw a room full of ledger clerks balancing the books?
That downgrading and replacing has been happening for a while. AI is just the latest step along the way.
The irony is that for the most part it's going to replace middle management, not the coalface
Except gamers mostly can't pay the top dollar that GPU makers would like. When the AI bubble bursts, those GPU makers will be struggling to sell anything other than gaming cards, so they'll have to forgo their 60% margins and sell at rates that the gaming market will accept.
As the fizz went out of crypto-mining, along came AI, and that was just gravy for the makers, they thought they'd died and woken up in heaven. But the storm clouds are gathering, and where is ANY high volume business use case for new GPUs beyond the current AI bubble? Even if there is one, it can almost certainly use the billions of high end processors already bought, paid for and installed, so there's a big question as to what the vale of the market for new GPUs will be in say 2028?
Wouldn't want my pension invested in big tech in general, and GPU suppliers in particular.
"Wouldn't want my pension invested in big tech in general, and GPU suppliers in particular."
I'll be changing one of my funds this week. Has done well but I think things are going to pop before the new year. Of course the bastard banks may get it all anyway. Apparently, they are the first creditor to most finance businesses and get first call on money in a collapse. We do not own the shares, we do not own our pensions, we are simply beneficiaries. Scary when you think. So in a collpase the big banks sweep up the assets. No doubt that would include our homes. Just wondering if there is a collapse, what happens to the big guys; Blackrock, Vanguard, State Street etc. Do they go to the banks, although I suspect the banks may control them via obsfuscated routes anyway. There's some weird ownership thing going on among those guys and I'm convinced their priority is ownership and control of markets over and above fund beneficiary interest.
So when a financial disaster happens, the big banks absorb smaller ones, take assets and emerge controlling more of the world. At least that was the last big depression. We need to find a way to stop this, it's not in our interest.
>firstly with bitcoin then AI
It hasn't been possible to mine bitcoin with GPUs for many many years now (ASIC hash rates are just that exponentially higher) - the previous big demand for GPUs was for mining other cryptocurrencies.
GPU prices were indeed originally much lower, even for the highest end models - but more than a decade ago, nvidia learned that the suckers still pay, price increase after price increase.
You would hope that AMD or Intel would compete with nvidia by offering GPUs that work with free software (or at least aren't digitally handcuffed, allowing for a free driver to be written) - but no, those run more proprietary software and are digitally handcuffed and the price isn't much lower either.
The money will be in MESH networking and swarm robotics, with limited and specialised AI that is useful for military purposes. Where the Ukraine has pioneered a path others will follow and sooner or later we're going to see someone building a production line for small, general-purpose attack drones designed to clobber armour or devastate groups of people, depending on how the explosive system is triggered.
The only real question then is which minor state gets the overrun treatment and can the actors involved hang onto it long enough to earn a profit back out of the venture?
>buy a PC without copilot
Or even a mouse! I have a Logitech item that I like a lot, but it has developed an irritating habit of double-clicking when given a single button press, so I went looking for a replacement. At least two of the devices that I identified as candidates have "AI features", as in e.g. users can assign AI shortcuts to the mouse, such as launching Copilot or ChatGPT, summarizing selected text, generating code snippets, or autofilling templated emails. Dammit, I just want something that single-clicks on a single click!11!
I'm not sure I see such direct comparisons to the dot com bubble. Sure the big players are massively overvalued, but hardly anyone else has poured serious money into it. Most have just rebadged old tech with an AI label. So the bubble will pop, but it'll likely be limited to those few companies.
Even then, the ones who have invested in infrastructure like Google and Meta will probably take a bath, but the likes of Nvidia who are cash rich and all their other market segments are still hugely profitable, they'll probably be just fine. Not close to the most valuable company anymore, but otherwise just chug along like they were before.
So I don't think there's much reason to expect a recession from this.
Of course Nvidia will still be rich. They’ve made buckets of cash, and they aren’t stupid.
What will change is that their *future* profitability will drop off a cliff. No way they continue making $10B/qtr selling video cards and Mellanox NICs.
It will still be a business - but a much smaller one.
In a sensible world NVIDIA would distribute that cash to the investors because they're not going to make sensible use of it and go back to being that smaller business and the investors would be pleased with their windfall and realise it was a one-off. In the real world they'll scream and shout at the management.
So you think the damage will be contained to AI bubble stocks? Perhaps, but that's famously what Federal Reserve chairman thought with regard to subprime mortgages in 2007. Some of us out here are skeptical that big time market overpricing is confined to a few AI bubble stocks. Note that the s&p 500 Price Earnings ratio is hovering at about twice its long term average of 15.
No I don't. CDOs and SIVs were the instruments investment banks used to sell off subprime mortgages. By getting the ratings agencies to treat them like they were as secure as treasury bonds they conned most of the market into buying them, including pension funds. Then those were bet against by the same investment banks through credit default swaps.
There is however going to be a lot of spare data centre capacity not to mention all the hardware that they have installed in anticipation of the Big Payday.
Less demand for DC's and the servers that go in them will hurt the hardware manufacturers, The biggest fallout will be confidence and that could cause a stock market crash. These 2 together will certainly cause a slowdown if not a recession in the IT world
Google, Microsoft, Nvidia etc are probably big and cash rich enough to ride out the storm. Venture funds will have to take a haircut (they are used to having to do that). Metaverse/Farcebook? They could be in trouble.
What will be left? some will survive, mostly those that were put together for a specific application and trained on specific, sanitised data. Oh and the cockroaches.
Personally it can't come quick enough for me, the sooner it happens the less pain there will be for all of us.
There, that is my prediction, do I get a prize if I am right??
