Is the AI bubble bursting?
High flyers NVDA PLTR retreating after hours on NVDA earnings.

Renew Deal
(84,393 posts)Ilikepurple
(276 posts)Klarkashton
(3,767 posts)Send GBT math a serious problem along with the answer.
It will do it wrong and then tell you that if it did it correctly the answer would be what you told it.
The idea that it could come up with anything new is completely absurd and they know it.
The other thing that's like this is the musk robot that is actually a Wizard of OZ contraption that is controlled by a guy behind a curtin, or the "supervised" robo taxis .
Midnight Writer
(24,554 posts)Bernardo de La Paz
(57,747 posts)1. AI is a BFD.
2. AI is only going to get stronger. That is a main reason why it is a BFD. But not by any smooth function. There will be fits and starts.
3. AI hopes and adoption will get bigger until they get smaller. The latter phase is an AI winter: a reduction in funding and emphasis. There have been several AI winters so far, each less severe than the one before. The coming one will follow the same pattern. It will be milder and not as long as the last one.
4. After the AI winter will come an AI summer. That is another reason this is a BFD. You ain't seen nuthin' yet.
5. This late stage AI summer does have a bubble. Let me count the ways:
. A: Valuations are very high: Nvidia is over 30 times projected earnings and that is kind of mild and probably the best justified of the whole bunch of companies. Palantr is one of the worst in regards to valuations, but it is memish because of its tRumpian connections and the hard right politics of the foul-mouthed CEO. The pure AI companies are making pennies for every dollar they burn.
. B. The stock market is top-heavy with the Magnificent Seven, which all, more or less, are in head-over-heels on AI. Nvidia is the purest AI play but at some time next year or two or three after it may face an industry wide retrenchment and be stuck with an over-supply. Wang is an everyman-to-everyone business genius at moving a brilliant company forward, but retrenchments are very different. Tesla is betting on self-driving, overpromised, especially with their cheaper technology. Waymo is safer. Amazon is minting money with AWS and is going to make its own chips (good luck). Meta is all user (advertisers) and cattle (who do get a unique service). Google may be split and seems undervalued but may be a good horse on the outside. Apple is habitually late, but always aims to be as much best as possible which is a strategy hard to bet against.
B2. All of those heavyweights are investing mind-boggling sums of money in data centers and research and marketing, the whole nine yards, but especially data centers and the power supplies for them (reactors, disadvantaged neighbourhoods, suffering Texan utility customers). So not only is it a significant stock market bubble but also, and partly because, it is a significant part of the economy. A contraction in capital expenditures will have ripple effects which will reduce advertising expenditures, leading to further contraction in cap-ex.
. C. AI has been over-promised and over-sold. Each AI summer has delivered on the over-promise of the previous AI summer and made it's own over-promises. The current AI summer is delivering on the speech recognition and synthesis promised in the previous summer. It is now promising replacing human agents and decision makers. The next AI summer will perfect human assistants with limited decision making ability, sometimes broad decision making where no direct human issues are involved.
. D. Businesses are beginning to realize that:
. . i) Performance is problematic. Faults are too numerous.
. . ii) Applicability is limited in modes and areas. Human supervision and interaction can be heavy beyond basic chores / actions.
. . iii) Deployment is expensive and requires planning and testing.
. . iv) A recent study (by MIT?) has shown that companies are not seeing as many benefits as they thought they would.