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It’s objectively a bad thing when a country’s entire economy is being propped up by seven companies and the vast majority of consumer spending is concentrated in the top 1%.
Specially when those companies are valued in TRILLIONS. Nothing is worth trillions, somehow these surreal numbers have been accepted as hard fact.
Nothing is worth trillions,
There is things worth trillions. Like full countries, and the largest pension funds and social security funds. Having a single company be comparable to those massive collections of people is insane, and it’s because they think it can replace workers–when it can’t, not yet, and not for a long time
Evaluations of everything is crazy. Net worth of celebrities with make up lines in particular is crazy. Look how many celebs are worth a billion dollars. To be worth that much, they should be selling at least $50 millions a year of product with no prediction of winding down.
The most optimistic take I’ve seen: AI is a drain on the entire economy that sucks up all investment and this is why the rest of the economy is basically in a recession. Once the bubble pops, investors will flood back into the real economy and correct the problem.
I’m not optimistic.
Can the AI bubble please suck up all the housing investment?
The way to make a big dent in that is to tax unused housing, with peogressivwly increasing amounts as they continue unoccupied. And limit or outright deny ownership by companies and investment firms.
We have more than enough housing for everyone, but a large portion of it sits unused. In many cases only because no one will/can pay what some of these companies are demanding monthly for them.
Yep it’s such a fragile situation
There is definitely a bubble. But also what Nvidia is doing is smart. They have boatloads of cash. They are investing that cash in the companies that are using their products to create money making services. If one of them can create a killer app or viable service this will create demand for their products and they will have an ownership stake in it. Is this guaranteed or even likely? Probably not. We have reached the point where we were in 1996 where the chairman of the fed came out and said we are in a period of “irrational exuberance.” That bubble took four more years to pop. This one may end quicker, but it is impossible to tell when it will end or what will come out of it from where we sit today.
The funny thing about people who say it’s not a bubble because AI has value is that the asset category having value doesn’t prevent valuation bubbles from forming.
Houses have value: you can live in them. Yet there was a housing bubble.
The internet has value: you can watch cat videos on it. Yet there was a dot com bubble.
Tulip bulbs have value: you can grow pretty flowers with them. Yet there was a tulip bulb bubble.
In my experience, whenever you start reading news stories asking if something is a bubble and quoting investment bankers say, “no, it’s not a bubble,” well, usually it’s a bubble.
NVIDIA really out here selling shovels in the gold Rush
Nvidia are very smart in that regard, ethics aside. Very early on they decided that selling cards to gamers will not give them the infinite growth everyone so desperately desire, so they started looking for what does, and they were consistent at it ever since. Every tech bubble of the recent history is powered by Nvidia cards. How much they contributed to the hype (and damage) is not entirely clear, but that’s not zero for sure
They lucked into it. They made their cards for gamers, and various groups, AI researchers, bitcoin miners and others, discovered that they those gamer GPUs were really good for other tasks too. I think it took a while before Nvidia started making specialised cards for those purposes.
I can’t really blame them for serving that market that they just lucked into. I can and will blame them for their terrible Linux support.
If it’s just luck why isn’t AMD rolling in it with their cards?
Oh believe me, it wasn’t just luck. They have special labs full of people who’s whole job is to find another unexplored niches that can buy their cards. And they only make specific single purpose cards only when the market is mature enough to justify the spending, which is also smart.
They made gpus long before the gold rush and will not stop after. The usefulness of tensor cores will not dwindle with any market correction. Even before ai boom they were valued astronomically out of reality. Not a single stock is tied to actual selling or owning of anything anymore
Just like shovels existed before the gold rush and will exist after humanity’s death. But we have a saying for a reason
Hold up everyone. It’s not a bubble.
“So it is true that valuations are high but, in our view, generally not at levels that are as high as are typically seen at the height of a financial bubble,” said Goldman Sachs strategist Peter Oppenheimer.
He’s from GOLDMAN SACHS LOLOLOLO I THINK THEY WOULD RECOGNIZE A BUBBLE LOL ah fuck me our economy is gonna splode
Goldman Sachs also though NINA mortgages were a good idea, and they also thought it was a good idea to bundle bad mortgages in with good mortgages, and find a rater to mark them AAA investments.
And then we saw how that worked out.
yeah, how could this go wrong?
at least after the crash those houses could be lived in. these datacenters are made for one purpose, AI, and really would have to be completely gutted and refurbed for general purposes… fun.
This doesn’t really tell me anything, I’d have to compare it with other charts. E.g. what does the chart for agriculture look like? Airplane manufacturing? Internet in early 2000s?
If Lemmy is supposed to be the place where the most tech savvy people in the interest congregate, and everyone in the comments is unsatisfied with AI then we really do have a problem. These companies have all reached a point where they no longer listen to their most informed customer base but instead take 100% of direction from investors who don’t even know what they want except a line going up.
Investments and income have been divorced from reality for a while now, bud.
Eh. Lemmy has a lot of ignorance surrounding technology and science compared to other sites. Hacker News is what you’re looking for if you want somewhere that is full of the most tech savvy people on the Internet, and most of them are extremely pro AI (with some weird AI cultishness alongside). Myself I think AI is a bubble but there is a lot of promise in the underlying technology once you take away the hype, just like the .com bubble at the turn of the century.
I am not sure if you have discussed AI in a room full of hackers recently, lol. I have. Maybe 1/100 is pro-Generative AI in my estimation:
Too many people equate AI with LLMs only. LLMs are mostly bubbled bullshit, with a few limited use cases. But AI is a much broader topic. The really scary AI is the stuff we hear little to nothing about.
People also forget how dramatically tech can advance over time. Spoiled impatient Americans in particular want a finished product or they quickly write it off as “garbage”. They forget every product we own and use was once “garbage”.
If Lemmy is supposed to be the place where the most tech savvy people in the interest congregate
Says who? Mostly feels more like sales than R&D here. Which kinda fits with these pitches.
I feel like someone working at the pointy end of R&D in AI isn’t necessarily well placed to predict the future of AI.
Bubble is an econ term. Whether there is an AI bubble has a rather tenuous connection to the future of AI. Not much of a connection between the housing bubble and the future of housing either.
I dont think we are in a bubble and I think all the media posts about it are just trying to make people sell their shares.
Sure there is no obvious profit yet but there will be. Once people start using AI in their phones and ask it questions, everything from baking to coding becomes way easier since its an interactive conversation, not a search result.
People will pay for that convenience since its a huge downside to not have access to it. Search results now seem very limited to me since I cant find out more about what its saying.
I think you are overestimating the amount people will pay for convenience or cling to their old ways.
Did e-readers kill the bookstore? Some people will always prefer to cook out of a book or dive into docs to write code.
Or look at the modern streaming landscape. In the beginning there was basically Netflix and everyone was fine paying that monthly fee for the convenience of streaming basically everything. Now we have 20+ vendors all charging for some subset of content. And we have seen a corresponding loss in subscribers as people hit the limit of what they are willing to pay for convenience.
Literally the entire point of searching something is to open up the links and find out more about what it’s saying… Do you need your AI to come up with the search queries too???
Its not interactive. Did you read my comment?
If you dont understand why people are going to pay for that, I dont know what to tell you.
Thats literally the entire thing about Ai, you can have a conversation, not static text and links.
So how dangerous is that really? I assume one day we’ll finally see investors saying, “Nah, that’s a bubble. I’m not gonna see any returns from those companies - I’m selling.” Then stock prices will fall, and some investors will lose money by selling for less than they bought. After that, AI unicorns will start to lose funding and close their businesses, laying off people.
But will I - a person who does not work in the AI industry and has not invested in AI companies - be affected by this?
Your pension is tied to these companies stocks. I can pretty much guarantee that “your” pension fund owns quite a few of these stocks.
But, and this is the important part, that isn’t your pension. It is the pension for those that are retired right now. There is no saved stack of money that you earned during your life thats waiting for you. Unless there is an equal amount of tax paying workers by the time you retire, you wont be getting that pension.
pension
I’m not sure how old you think most of us are, but I don’t think pensions are a common retirement vehicle anymore, and haven’t been for a while. 401k would probably be the modern equivalent, and it’s still running on the stock market for the majority of its life prior to beginning to withdraw.
Pension is the correct English term. 401k doesn’t mean anything unless you’re american.
Pension is the correct English term
I don’t think it is.
A pension implies benefits are distributed to the person in retirement, usually with some fixed amount per month. My understanding is that in the UK, defined contribution plans are required to be invested largely in annuities by retirement, which satisfies that, whereas in the US, 401ks don’t have such restrictions. So a 401k could be depleated well before death, or be passed on to children as inheritance, unlike an annuity. There are required minimum distributions, but they don’t kick in until your 70s.
If 401ks switched to a defined benefit plan at retirement, I could see calling it a pension. But since they’re not, I think that’s misleading, and employer sponsored plan makes more sense.
I am in the US. In regard to employer based retirement, there are a few pension programs still available, mostly union based. In other corporate environments that do not offer union pensions (as they are non-union)- they offer the 401K if a for-profit or a 403B if non-profit. As you get closer to retirement, many 401K/403B recalibrate to a larger proportion of Bonds vs riskier stocks/futures. Although I also invest in some ETFs that are not pretax (only the earnings are taxable).
Not true of UK defined contribution, you can do what you want just like a 401k, though it may be disadvantagous for tax purposes.
It’s pretty normal in British English to use pension as a synonym for retirement account, though I can see why you don’t like that.
Were you affected by the dotcom bubble?
Maybe the remaining tech companies, such as Microsoft and Nvidia, might raise prices of their products to cover the losses.
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Looks more like the dot com bubble to me.
Is it just me, or are the bubbles coming closer together these days?
Is it just me, or are the bubbles coming closer together these days?
Yes and no.
Yes in the sense that we have a lot more “fad” economies. There is something new so that needs to be EVERYTHING and the market course corrects, often at the cost of hardship for many.
But “no” in the sense of what “bubbles” tend to refer to. Things like the Japanese Bubble Economy where it causes (I forget if it is officially one but) recessions and even depressions.
The AI Bubble is not going to do that (on its own…). Yeah, a LOT of companies are going to be left holding the bag when they realize LLMs can’t solve all problems for them AND manifest a Cyber Stana Katic to give them a blowie while it does that. But what will they be left with?
- A LOT of “prompt engineers”: This is bad because that is going to be a LOT of people who, increasingly, went to school to get a degree in something with very little utility. That said… Art History majors have been showing us how to do that for decades and at least they did something they loved on their way to service industry jobs.
- For the companies that gutted their workforce over the past few years: A need to rapidly hire talented workers who don’t require ChatGPT to do their job: This is REALLY good for the people who have been hurting and should actually lead to a lot of job mobility… for the old hats who predated this fad
- For the companies that purchased hardware: A lot of edge computing devices are going to be of questionable value. But for the folk who “just” bought a shit ton of GPUs from Daddy Jensen? They have a shit ton of GPUs they can either sell for cheap (not horrible) or repurpose (good)
Don’t get me wrong. There is going to be upheaval and it is going to be bad. But it is also important to remember that drawings like the above are actively misleading and bordering on manipulative. Because basically all the biggies, except OpenAI, have non-AI uses. Oracle ballooned massively because of the OpenAI injection but… they are still god damned Oracle. Same with nVidia who, when they aren’t powering every LLM on the planet, are also one of the companies that makes all the cards that power stuff like computer vision and the like in cars and what not.
Because… remember the dot com bubble? Remember how basically the entire world still runs on The Internet? It was just a case of rebalancing and pivoting for the most part.
All that said… the US is in a really bad way because the fascists have been increasingly gutting the economy and stopping basically any industry that involves manufacturing or communicating with external countries. We are gonna have a massive stock market crash when OpenAI et al pops…
Yes! The problem is that we won’t accept the full correction that is actually required. We print money, we buy securities, we find ways to prop to reduce the pain but we end up shifting the weakness to other areas of the economy.
The amounts going around now are getting too big for a government to cover. Instead of too big to fail, they’re now too big to bail.
Nonsense. We can print an unlimited amount of dollars.
Well if they want to devalue the US dollar…that’ll do it.
Last time I checked gold and silver were at all time highs and the dollar was down more than 10% YTD.
Unpopular opinion but this will not as bad as housing bubble and we’re way past bubbles actually popping in contemporary economy. Even China corrected for its massive ghost city housing bubble just recently and that was actually worse than ai tech overvaluation.
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Idk if ghost city thing was a bubble tho.
China used planned infrastructure and bunch of confused journalists in US were like “what kind of government plans for housing of their citizens”
It was a textbook bubble. They made and gambled on theoretical apartments where nobody involved had any intention of living there or any responsibility or connection to the underlying structure, to the point where building cardboard skyskrapers became a business… the is no point in denying it. Capital housing investment is a plague on humanity.
There are always bad actors in the system (see: hedge funds). But bubble? It can be argued that Ordos (the ghost city) was build too early, but it’s filling in nicely. From 30k in 2009 to 2.000.000+ in 2020.
https://en.wikipedia.org/wiki/Ordos_City
On the other hand noone ever build a damn whole modern city before for the people, so I’m not surprised they jumped the gun.
When Investors own houses only because it will appreciate in value from time only, that is a fundamentally flawed system because in reality houses decrease in value as they get older. It creates an environment where everyone involved is a bad actor
I’m sorry, I’m a little bit lost. I do agree that investment in owning rentals should be forbidden (and if city needs rental units they should be owned by the city).
I do not agree that “ghost cities” were built for speculative purposes. Speculants were buying them like crazy, yes, but the actual need for housing in regions planned (expected?) to undergo urbanization is real and the buildings were fulfilling that purpose.
Let me guess… is it because the people’s republic is flawless in every concievable way? I saw some footage from someone that was there, not a news agency. I won’t pretend that couldn’t be wrong, but I am known to occasionally enjoy Occam’s razor.
Yeah, my server end with ml so I must be a tankie, makes sense.
It cannot be that I genuinely appreciate long term vision policies. I must be a tankie. And you’re right, those cities were not needed, and planned urbanization must be planned only 2 years ahead because everything else is speculative bubble made for speculation.
