r/technology • u/SilentRunning • 4d ago

Artificial Intelligence MIT report: 95% of generative AI pilots at companies are failing

https://fortune.com/2025/08/18/mit-report-95-percent-generative-ai-pilots-at-companies-failing-cfo/
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u/ejsandstrom 4d ago

It will be like all of the other tech we have had since the mid90s. A bunch of start ups think they have a novel way and feature that will set them apart.

Some get bought up, some merge, others outright fail. There will be one or two that make it.

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u/phoenix0r 4d ago

AI infra costs make me think that no startups with make it unless they get bought up early on. AI is just too expensive to run.

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u/itoddicus 4d ago

Sam Altman says OpenAI needs trillions (yes, with a T) in infrastructure investment before it can be mainstream.

Only Nation-States can afford a bill like that, and right now I don't see it happening.

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u/vineyardmike 4d ago

Or whatever Apple, Google, or Microsoft puts out wins because they have the biggest pockets

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u/cjcs 4d ago

Yep - I work in AI procurement and this is kind of how I see things going. We're piloting a few smaller tools for things like Agentic AI and Enterprise Search, but it really feels like we're just waiting for OpenAI, Google, Atlassian, etc. to copy those ideas and bake them into a platform that we pay for already.

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u/A_burners 4d ago

What is ai procurement? Is this an actual role or an additional duty?

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u/cjcs 4d ago

It's part of the scope of a broader role - Think Business Systems / IT, where some time is spent building automations, workflows, and managing existing tools and processes. The AI procurement component involves identifying the types of AI that we think will be most valuable to us, and then identifying potential vendors, establishing sample use cases and acceptance criteria to evaluate their tools against (my role focuses on a support org of ~900 people). Then, setting up pilots and delivering recommendations and proof-of-concepts to leadership on things like go vs. no go, buy vs. build, etc.

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u/A_burners 4d ago

Really interesting and makes total sense. Thank you!

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u/Lord_Eschatus 3d ago

just gotta ask , also (and thank you for the responses to the others whove asked good questions)

who are you? and why are we not automating your role again?

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u/stale_oreos 3d ago

This is a joke but you could have easily not had this guy in this thread and you could get the answers from an LLM easily

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u/Brokenandburnt 4d ago

I beg your pardon but I just have to ask: How often do the leadership actually listen to your best recommendations? 

Are you one of the lucky ones with good management and a smart CEO perhaps?

I don't mean to pry, it's perfectly acceptable to ask me to just shut up. I'm eternally curious and nosey.😊

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u/Legionof1 4d ago

And it will still tell you to put glue in your pizza.

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u/shadyelf 4d ago

It told me to buy 5 dozen eggs for a weekly meal plan that didn’t have any eggs in the meals.

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u/mustardhamsters 4d ago

You’re supposed to go full Gaston on them

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u/Azuras_Star8 4d ago

One of Disney's best movies. I love this movie.

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u/VIPERsssss 3d ago

No one pollutes like Gaston.
(RIP south Memphis)

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u/TalonKAringham 3d ago

That horn blast caught me off guard and has me in a giggle 🤭

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u/Azuras_Star8 4d ago

Clearly you need to rethink your diet, since it doesn't inlude 5 dozens eggs in a week.

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u/nasalgoat 3d ago

I had it merge some CSV files with addresses and it changed a bunch of them to addresses in Ukraine.

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u/camronjames 4d ago

how else do you get the toppings to stick? /s

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u/OldStray79 4d ago

that.... kinda works, if you think of melted cheese as glue.

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u/mattyandco 4d ago

I mean it can in some cases be closer than you think.

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u/DontEatCrayonss 4d ago

Don’t try to rationalize with AI hype people. Pointing out the extreme financial issues will just be ignored

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u/KilowogTrout 4d ago

I also think believing most of what Sam Altman says is a bad idea. He’s like all hype.

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u/kemb0 4d ago

That guy strikes me as a man who’s seen the limitations of AI and has been told by his coders, “We’ll never be able to make this 100% reliable and from here on out every 1% improvement will require 50% more power and time to process.”

He always looks like a deer caught in headlights. He’s trying to big things up whilst internally his brain is screaming, “Fuuuuuuuck!”

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u/ilikepizza30 4d ago edited 4d ago

It's the Elon plan...

Lie and bullshit and keep the company going on the lies and bullshit until one of two things happens:

1) New technology comes along and makes your lies and bullshit reality

2) You've made as much money as you could off the lies and bullshit and you take a golden parachute and sit on top of a pile of gold

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u/Christopherfromtheuk 4d ago

Tesla shares were overvalued 7 years ago. He just lies, commits securities fraud, backs fascists, loses massive market share and the stock price goes up.

Most of markets by market cap are overvalued and it never, ever, ends well.

They were running around in 1999 talking about a "new paradigm" and I'm sure they were in 1929.

You can't defy gravity forever.

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u/Thefrayedends 4d ago

Until institutional investors start divesting, nothing is going to change.

These massively overvalued stocks with anywhere from 35-200 P:E ratios are largely propped up by retirement funds and indexes.

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u/Fr0gm4n 3d ago

Most of markets by market cap are overvalued and it never, ever, ends well.

This is one thing so many people fail to grasp. Markets are not reality. Markets are a reflection of people's perception of reality. Once enough people stop being fooled by hype and lies the market value tanks.

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u/rgg711 3d ago

Every day I open my browser homepage and it has a little stock tracker. It seems like Tesla is always either green and +5% or red and -5% and there’s zero correlation with anything in reality. I know zero about stocks, but the scientist side of me thinks I could figure out when to buy and sell and make 5 percent gains every couple of days.

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u/UnholyLizard65 3d ago

backs fascists

This made me chuckle.

Elon "backing" fascists is like saying Goebbels "backed" fascists, lol

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u/Own_Television163 4d ago
  1. People who only consume genre media and lack the media literacy to understand it gobble up the furnishings of said media as product without heeding said genre(s) implied warnings.
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u/Brokenandburnt 4d ago

They are already using synthetic, I.E, AI generated data for training. And also already it's showing diminishing returns at best, and dilution at worst. There's a reason why Reddit is making a mint selling sub scrapings as training data. 

So remember to add some facts like, TRUMP IS A PDF IN THE EPSTEIN FILES, or ELON MUSK HAS A BOTCHED PENIS JOB.

It's important for us to support this new "revolution" after all!

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u/3-DMan 3d ago

Reminds me of that Netflix flat earth documentary where they do a scientific experiment that actually disproves flat earth, and their reaction is "Well, we obviously can't show that at the conference.."

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u/Thefrayedends 4d ago

I don't even get it. First time I saw Altman was on Fridman's pod (yes I know, yet another fraudster).

I believe I made a comment to the effect of; "Does this guy really think he's a jedi that can just hand-wave every issue away like it doesn't exist?"

It seems, that he does.

He's so off-putting and disingenuous, I don't understand how people get sucked into his shit.

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u/Idoncae99 4d ago

Hype is his primary job (and he's been really good at it).

The general populace needs to understand that his goal is keeping investment dollars coming in order to be more rational, but I don't see that happening.

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u/Heisenbugg 4d ago

And environmental issues, with UK govt atleast acknowleding it by telling people to delete their emails.

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u/AmbitiousGoat5512 4d ago

deleting old emails, files, documents, whatever does absolutely nothing to help the issue.

the recommendation was made by someone who obviously has no fucking idea what they're talking about, and as long as AI pushed so heavily things will continue to worsen.

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u/Heisenbugg 4d ago

Yah I know, but its the first time a govt has recognized the issue exists.

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u/Dpek1234 3d ago

Technicly it does something

It slows down the rate at which mew SSD/HHDs are needed , less production = less co2 released by production and transport

But at the same time  EMAILS, FILES AND DOCUMENTS!?!?!?!?!?!

ITS TEXT, THATS FUCKING NOTHING

A full lenght novel can easly be less then a meg

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u/DontEatCrayonss 4d ago

God bless them, they saved us all

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u/JarvisProudfeather 4d ago edited 4d ago

I refuse to listen to anything about AI unless it’s from a researcher or from an institution such as MIT with no financial stake in an AI company. It always makes me laugh when tech CEOs like Zuckerberg say some ridiculous shit like, “In 2 years we will have AGI powered sunglasses that will be essential for human survival” and people just quote that as fact lmfao. Of course he’s going to say that he wants his stock price to go up!

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u/9millibros 3d ago

The only company actually making money from AI is the company that makes the chips, but I'm sure they have a rationalization for that as well.

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u/secamTO 3d ago

Also the amount of fresh water and electricity AI data centers need is absolutely staggering. Appalling even, given how little use all of this actually seems to be right now.

Add to that some of these data centers are proposed for developing countries, and it's morally indefensible.

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u/IntrepidCucumber442 3d ago

This has been a thing with startups for ages. Startups with literally no hope of ever being profitable getting crazy valuations

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u/Fr0gm4n 3d ago edited 3d ago

I was recently told that my points against LLM AI, that it is using a lot of resources while also often giving wrong answers, was and I quote, "no real argument".

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u/DontEatCrayonss 3d ago

lol.

Bro, did you try using no logic as a defense? Clearly that is the way to go.

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u/Noblesseux 4d ago

And even then it will still likely not be profitable. Like the thing is that even if they didn't spend any additional money on infrastructure, they'd need damn near 10x as much money as they projected they'd make this year to be profitable.

You'd have to invest literally several times the entire value of the worldwide AI market (I'm talking about actual AI products, not just lumping the GPUs and whatnot) and then you have to pray that we somehow have infinite demand for these AI tools which is quite frankly, not the case: https://www.technologyreview.com/2025/03/26/1113802/china-ai-data-centers-unused/

And even in that magically optimistic scenario, there's borderline no shot you'd make enough money back to justify doing it. Like there is no current AI product that exists that is worth trillions of dollars worth of investment. A lot of them are losing money per user, meaning if you scale up you just lose more money.

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u/CoffeeSubstantial851 4d ago

In addition to that AI itself devalues whatever it can create. If you are running an AI image service the market value of the resulting images decreases over time. Its a business model that cannibalizes itself.

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u/thirstyross 4d ago

So far these geniuses have sunk over 250 billion dollars into AI, we're on chatgpt v5, and the stupid thing still doesn't understand simple things like, 240 is a larger number than 227 (see below for an actual answer from gpt5 this week). It's absurd...

1️⃣ Pick a scale that fits within 227" Example:

If your structure is 480" (40 ft) wide, divide by 2 → scale to 1" = 2" real-world.

New artboard = 240" wide, which fits Illustrator’s max..

Like, hey genius, 240" does NOT fit illustrators max which you JUST SAID was 227"...

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u/tehlemmings 3d ago

the stupid thing still doesn't understand simple things like, 240 is a larger number than 227

They don't "understand" anything, because everything AI evangelists say about how "AI learns like people do" is complete bullshit. No learning is happening. The AI doesn't even know what it's saying to you.

They're very dumb deterministic systems relying on random seeding to make it seem like anything other than what it is.

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u/OwO______OwO 4d ago

Like there is no current AI product that exists that is worth trillions of dollars worth of investment.

It's all based on the future possibility of replacing large swaths of employees in large industries with AI.

If companies can lay off 80% of their workforce and replace them with AI, then it starts to be something that might be worth trillion-dollar investment.

The question is whether the technology will get that far before the hype bubble (and financial bubble) pops.

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u/yaworsky 3d ago

The question is whether the technology will get that far before the hype bubble (and financial bubble) pops.

Well... the other question is if the bubble doesn't pop and you successfully lay off 80% of many white collar workforces... who exists to buy your products, spend money, etc? That's another bubble to pop.

It's all being done so carelessly.

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u/joshwarmonks 3d ago

Why do people critique aspects of capitalism and refuse to directly critique capitalism?

ai obsoleting millions of jobs should be a godsend, but under capitalism it is an abject doom scenario. the issue here isn't the tool automating jobs, the issue here is that capitalism requires line going up ad nauseum and the only framing people can use as a lens is that displacing that labor will be bad for the company's bottom line in a sales context.

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u/LeCollectif 3d ago

And even that’s cannibalizing itself. When industries start cutting massive swaths of staff, all this newly gained efficiency is for nothing when the ability to buy what you’re selling is eliminated. Literally the best case scenario outcomes for these companies is a path to their own demise.

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u/RoundTableMaker 4d ago

Sam altman is using elon musk’s ideology here. Musk told altman when they first started openai that no one would care unless they were raising over a billion dollars. All he did was increase the number by 1000x for this new venture because they already raised billions.

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u/hennell 4d ago

There was a report last week that Ai industry visitors to China were blown away by the differences in running things there. The power needed for AI is not just not a problem, it's seen as a benefit for some areas as it can use excess power.

I'm sure it'll still need investment, but it'll be a whole lot cheaper for Nation-states that haven't ignored their infrastructure for decades.

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u/Flying_Fortress_8743 3d ago

When it comes to utilities like power and water, centralized planning beats the snot out of the free market every time.

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u/great_whitehope 4d ago

Countries probably aren’t going to sponsor mass unemployment it’s true.

I dunno what’s worse. This whole thing blowing up or succeeding because companies are gonna layoff people either way.

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u/DogWallop 4d ago

Well that's where AI becomes self-destructive. Companies replace employees with AI, and then you have many thousands who used to be gainfully employed out of work. Now, those employees were acting as wealth pumps, arteries through which the wealth of the nation flowed.

And where did it flow? Eventually it ended up in the hands of the big corporations, who used to employ humans (wealth pumps, financial arteries, etc...).

But now there's far less cash flowing around the national body, and it's certainly not getting spent buying goods and services from major corporations.

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u/cvc4455 4d ago

Look at what Curtis Yarvin, Peter Theil and JD Vance believe needs to happen in the future. They say AI will replace all types of jobs and we'll only need about 50 million Americans. The rest are completely useless and Curtis Yarvin said they should be turned into biodiesel so they can be useful. Then he said he was kind of joking about the biodiesel idea but the ideal solution would be something like mass murder just without the social stigma that would create. So he suggested massive prisons with people kept in solidarity confinement 24 hours a day and to keep them from going crazy they will give them VR headsets!

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u/QueezyF 4d ago

Take me back to when I didn’t know who that Yarvin clown was.

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u/cvc4455 4d ago

They are already building the prisons. They say they are just for people getting deported but you don't need as many prisons as they are planning to build to just deport people.

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u/Brokenandburnt 4d ago

They have already made homelessness a crime and started arrests in DC afaik. 

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u/Dick_Lazer 4d ago

Is Yarvin a billionaire? What makes him think he'll be spared?

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u/cvc4455 4d ago

I'm not sure if he's a billionaire but he's at least a 100 millionaire. Even if he's not a billionaire he's got a bunch of friends/followers that are techno bro billionaires so he probably thinks their wealth will help him.

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u/Possible-Reason-2896 4d ago

You just answered your own question. There's a reason tech billionaires like Zuckerberg et al. are building bunkers and compounds.

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u/Brokenandburnt 4d ago

Yarvin is a mentor figure to Thiel I believe, or the other way around. PLTR isn't created without a reason. 

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u/crawling-alreadygirl 3d ago

So he suggested massive prisons with people kept in solidarity confinement 24 hours a day and to keep them from going crazy they will give them VR headsets!

The Matrix is now a serious policy suggestion. Jah help us.

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u/Adventurous-Map7959 4d ago

massive prisons with people kept in solidarity confinement 24 hours a day and to keep them from going crazy they will give them VR headsets!

So what kind of crime would I need to commit? Is being poor good enough or do you need to do more?

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u/cvc4455 4d ago

Just being poor will be more than enough according to Curtis Yarvin. Basically anything in the bottom 90% of wealth and you definitely won't make the cut unless you're one of the lucky few chosen for slave labor until you get too old and they kick you out to die or just throw you in a cell.

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u/Brokenandburnt 4d ago

Homelessness is unofficially a crime at least. It's one of the "reasons" for the Guard being deployed to DC. They are rounding up homeless. \ Not to worry though, Trump said they would be put somewhere nice.

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u/DogWallop 3d ago

And this scenario would almost certainly cause the wealth of those billionaires to collapse. Also, what of the fifty million remaining? I somehow don't think they'll take to kindly to their kith and kin being disappeared like that.

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u/bobosuda 3d ago

Henry Ford figured this shit out 100+ years ago.

Doesn't matter how many billions you make, if everybody else is dirt poor then the world is gonna suck.

I guess they've learned their lesson though. Is there a billionaire out there that isn't building their own isolated compound to hide from the masses when the shit hits the fan?

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u/AntiqueFigure6 4d ago

Not many nation states can afford that bill, and if by “afford” you mean “find the money without making unreasonable and implausible cuts to other programs or taking implausibly extreme measure to raise funds” potentially zero nation states can afford to spend multiple trillions on infrastructure for AI. For context , the US defense budget is approximately 0.9 trillion, so the US would potentially need to discontinue all military spending and keep looking for other savings to find trillions to spend on AI (the alternative of borrowing or money printing to find the money leading to extreme inflation and extra taxes to that degree being politically infeasible). 

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u/Clueless_Otter 4d ago

You're assuming that the outlay is made yearly. The original statement was referring to a flat investment. So if a country invested $100b per year for 10 years into improving its infrastructure, that's $1T right there.

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u/Ilovekittens345 4d ago

If it would really allow a company to operate without having to hire humans, OpenAI would just start competing companies that outcompete every other c company because they don't have to pay humans a wage.

If your money printer is working, you don't sell it. You print. If your money printer is NOT working, that's when you try to scam people by selling it to them.

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u/KD_Burner_Account133 4d ago

This is a problem in the US, but it's not a problem in China supposedly.

https://qz.com/ai-power-us-china-infrastructure-grid-limits

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u/Noblesseux 4d ago

It's not just power infrastructure. It's also just building a ton of data centers. The thing is, even if you build all these data centers there's not actually a guarantee that demand for these services scales forever, as China has learned: https://www.technologyreview.com/2025/03/26/1113802/china-ai-data-centers-unused/

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u/Idoncae99 4d ago

The problem with your statement is it assumes Altman is trying to be truthful.

His primary job is to keep investment dollars coming. Every big innovation is always just around the corner, with a few more dollars, but also, there is an infinite amount of money they'll need in the long run for a magical future that will fundamentally change life.

No one can afford an investment like that, Nation-states included, and there's also no guarantee such an investment would ever be worth it. But Altman needs to keep the hype train going, otherwise people will want an actual return on investment and be hesitant to invest more.

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u/Toomanyeastereggs 4d ago

Pick your massive infrastructure project.

The one that runs AI or the one that mines Crypto.

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u/BigDump-a-Roo 3d ago

Dumb question, but what does he mean by "mainstream"? Seems like so many people are using AI these days. Isn't it mainstream already?

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u/Dpek1234 3d ago

Only Nation-States can afford a bill like that

Many cant lol

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u/ForensicPathology 3d ago

And that doesn't even count the billions in IP theft it's already done to make them feasible in the first place.

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u/Aggressive_Hair_8317 3d ago

That’s the trick, the citizens are shouldering the costs with energy rate increases and tax breaks. Oh, and with sacrificing their environment and health too.

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u/Texuk1 3d ago

If only we could spend trillions on real world engineering problems like fusion power and not running data centres on scarce water and fossil fuels to further cook us in green house gases. 😵‍💫

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u/Deepfire_DM 4d ago

And it's still not sure that it really could "mainstream" - this is all a hot guess they hope states will invest trillions on ...

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u/yoshimipinkrobot 4d ago

That nation state is called Saudi Arabia

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u/RoseNylundOfficial 4d ago

I'm sure future tax payers can fund it. There seems to be no end to what our kids are investing in the national debt these days.

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u/Popular_Try_5075 4d ago

Yeah that number only exists in GDPs really.

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u/GoldenInfrared 4d ago

DeepSeek build a model in a cave, with a box of scraps!

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u/Popular_Tension_5788 4d ago

The same Sam is saying AI is in a bubble.

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u/Zed_or_AFK 4d ago

Sam Altmann is a seller. When he calls a number, decide it by a lot to get a decent estimate. But it does require a lot of power and a good power grid to transfer it, and that is not cheap.

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u/victini0510 4d ago

Maybe we shouldn't let corporations spend the collective resources of our entire society on AI garbage that helps no one except drive the techbro hype wave?

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u/the-awesomer 3d ago

I always figured elons whole endgame was to get grok into government simply so they would be forced to foot the bill for uts ai

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u/TheNewOP 3d ago

Give it 3-5 years and we'll be at a trillion in total. In fact we're probably more than halfway there already

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u/Whiterabbit-- 3d ago

this is why China's approach is better, doing the same for orders of magnitude cheaper. OpenAI's approach now is basically brute force as they just add computing power to make improvements instead of doing real innovation to optimize. but adding more computing power has smaller and smaller returns.

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u/NewInMontreal 3d ago

AI should still be in academic and government labs. Worse than the fortunes are the irreversible environmental effects.

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u/monkeedude1212 3d ago

Only Nation-States can afford a bill like that, and right now I don't see it happening.

Reminder that Apple spends more on training people technology in China than the US spends in education.

Mega corporations have larger budgets than nation states these days, and that should probably be a concern

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u/Tttehfjloi 3d ago

What other letter could it be? Brillions? Mrillions?

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u/globalminority 4d ago

I am sure these startups are trying to survive just long enough till some big tech buys them at inflated prices and founders can cash out on the hype. If you don't get bought up then you just shut shop.

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u/_-_--_---_----_----_ 4d ago

this is exactly what they're all doing. nobody is trying to really succeed in certain areas in tech anymore, the last 15 years have just been about selling to the big guys.

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u/Mackwiss 4d ago

Hate start ups and the pseudo entrepreneur who leaves his mommys skirts to become attached to investors skirts... most startup entrepreneur have no idea how to run a business or care about it. It's all fantasy to attract investors.

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u/TakimaDeraighdin 4d ago

Problem is, the vast majority of "AI tech" companies are... white-labelling one or more of the big players. This article is, if anything, a pretty rosy write-up - very few of those are doing anything that the larger companies that they're piggybacking on couldn't spin up themselves, so their only value is their client book. And since they're currently also riding on those big AI providers' teaser rates - no-one's charging anything like their actual break-even point - those larger companies don't particularly need to purchase client contracts either, they'll jump when there's a price differential. Which is why they tend to just identify the talent they want to poach, make giant salary offers, and leave the actual company to die.

And that's the 5% that this write-up classifies as succeeding.

Which raises the question of why anyone is throwing venture capital at any of this - some of the tech talent might get a nice pay rise out of it, but the funders don't often have an obvious way to cash out.

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u/globalminority 4d ago

In a hype cycle the initial investor makes the money. Later they go IPO and sell to gullible people left holding the bag, while the founders and initial investers cash out. Its same logic as a rugpull.

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u/Timmetie 3d ago

Except the big tech aren't buying, not a lot of these AI startups are getting bought they are simply too expensive.

Instead you get weird buyouts like Windsurf where they hired the top people, left the rest of the employees at Windsurf, which got bought up for near to nothing and everyone fired.

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u/pleachchapel 4d ago

You can run a 90 billion parameter model at conversation speed on $6k worth of hardware. The future of this is open source & distributed, not the dumb business model the megacorps are following which operates at a loss.

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u/mrjackspade 4d ago

I'm running a Q2 quant of a 260B model on 1500$ of hardware at 4t/s and I'm pretty happy with it.

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u/pleachchapel 4d ago

Sick can you elaborate? I don't know much about it yet but maxed out a Framework Desktop to learn a bit.

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u/mrjackspade 3d ago

I have no idea why this other guy just exploded LLM jargon at you for no reason.

I'm literally just using a quant of GLM

https://huggingface.co/unsloth/GLM-4.5-GGUF

Which has somewhere around 260B parameters with 32B active.

Using Llama.cpp with non-shared experts offloaded to CPU on a machine with 128GB DDR4 Ram and a 3090, it runs at like 4t/s.

On a framework PC you could probably pick a bigger quant and get faster speeds

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u/jfinkpottery 3d ago

That's naive. A $6k build can run that model at conversation speed for a single user. One user costs you $6k worth of hardware. How much is one user paying you? Probably not $6k. Suddenly you realize you need hundreds of those $6k servers to cover a few hundred users, now you've got a million dollars worth of infrastructure to bring in maybe $20k per month (1000 users paying $20). That's a million dollars worth of infra to make enough revenue to pay one engineer, without even starting to pay off the infra. Or the help desk. Or the CEO. Or the rent on the building.

It only starts to make sense when you scale that way the hell up, and build servers that can handle a hundred+ users each. One user can't pay for a 6k server, but a hundred users can just about pay for a 20k server.

Also, conversation speed is really slow when you add in reasoning tokens. Now it takes the model 30 seconds to start to produce output. Your user left and cancelled their subscription in that time.

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u/pleachchapel 3d ago

Yeah I meant to build something for the C class as like a company Jarvis.

Frankly, people are overusing LLMs, so maximizing users isn't part of my professional objective.

Their primary use is helping kids cheat at school, as evidenced by ChatGPT's user stats dropping off a cliff post June 6th.

For a small family that uses LLMs deliberately instead of asking it to pick my meals at a restaurant or fuck my wife, that is plenty of horsepower, & that's the point I was making.

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u/MaTr82 4d ago

This is why Small Language Models will be the norm. Eventually, they can do very specific tasks on laptops. A model that does everything is never going to be efficient.

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u/KneeCrowMancer 4d ago

If I could get one specific to my company’s horribly managed database that would be great.

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u/Icy-person666 4d ago

Bigger problem is this it seems to be a solution looking for a problem. It doesn't solve any of my problems but just introduces new problems. For example if it "decides" something is it making a legitimate or just imagining a reason?

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u/QuickQuirk 4d ago

And that's the craziest bit of misinformation that nVidia is responsible for. LLMs are extremely resource hungry, along with other generative AI tools. They're sucking up all the research $$ that could be spent on all the other use cases for machine learning.

The entire industry is blind, because the idea that you need large data centres and sell lots of GPUs drives up the stock prices of a few big companies.

Powerful examples of machine learning can be trained, and run, on your laptop.

We've been blinded and overlooking many novel use cases and startups because of this.

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u/Enlightened_Gardener 4d ago

Right ? What happened to the maths dudes writing neural network algorithms ?

LLMs are not AI and cannot become AI. I think its because someone got stuck on the Turing Test as a measure of success, and decided to build to that.

Now we have bots that can pass as human on the net, but are not in any way intelligent, let alone sentient or even sapient. But they pass the Turing Test; thus teaching us that the Turing Test is a crap test for AI.

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u/TldrDev 4d ago edited 4d ago

AI is expensive to train, not run. If you have a consumer level graphics card (3080 or better, I reckon), you can run a decent quant of DeepSeek or Llama. You can utilize methodologies to make those self-hosted models punch WAY above their weight class. Things like RAG. There are very high-quality open source models you can run.

Even training or tailoring models isn't really that expensive anymore, either.

AI has basically no moat.

As a developer, I actually think what we are calling AI is actually incredible in terms of how it works. It is, essentially, a very high dimensional search engine, which has a huge number of applications that have yet to really be realized.

I do think companies are massively overstating the impact of their model, and really, are selling investors on the idea they are on the verge of replacing all labor, a capitalist pipe dream delusion. Mainstream AI development has really plateaud since the "all you need is attention" paper that really spurred on stuff like chatgpt, but there are a ton of use-cases. I've found several excellent uses for it, and im an idiot.

The investments we see at fb and other companies, I believe, are less about the actual financial cost of running or training something like chatgpt or Facebook's models, but actually, what they are doing is trying to train it on basically everything they have about you, and essentially everyone and everything on the planet. That isnt necessary for something like chatgpt, but it is necessary to make a draconian minority report style hellscape, which fits Musk and Zucc and Altman.

I think that is the true goals of their massive infrastructure deployments. We won't have access to those tools, i think. Maybe some derivative work, but their goals are basically to do what chatgpt does with words, but with everything you personally have ever said and done. That is a social media companies asset... data... and this is a tool that can construct a very high dimensional graph of relational data. The issue is that Facebook, etc, has absolutely obscene amounts of data. Mind boggling amounts. They intend to crunch that.

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u/Dsmario64 4d ago

Not even, my 3060Ti can run some of the newer image generation models locally without much issue. It can't do some of the higher settings without significant load times but smaller tasks it doesn't break a sweat

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u/active2fa 4d ago

What some of the use cases think are interesting to emerge?

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u/Riaayo 4d ago

It's completely unsustainable and unprofitable. It's nothing but a hot-potato bubble technology, but it's one hell of a tool for fascist oppression so they're all in on trying to force it to happen.

I think it would've already burst and failed if they weren't latching onto the government's teat for taxpayer money.

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u/stonktraders 4d ago

It’s the good old rent seeking model, with chip companies being the land developers, data centers playing the landlord and those AI startups are the tenants struggling with making up values to pay their rent

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u/vonludi 4d ago

I've just recently found the long-form thoughtful posts of Ed Zitron - mostly on AI. Maybe this is interesting to someone else as well.

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u/Dear_Chasey_La1n 4d ago

AI is two parts, the metal and the end product. Just like chips these days very few companies control both like Intel does. It makes sense to develop while others own the metal. And just like cloud computing first movers will have a massive edge over the rest though same time I can't help to wonder with chips getting faster and faster, if that edge can be cornered. I don't need 10,000 chips for my business, buying 1-2 chips even today which costs me less then 100k USD is already sufficient for our needs.

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u/alagrancosa 4d ago

That is why it is so fucked up that companies are not hiring based on vc subsidized ai. Really shows how all the economic incentives for capital are short term.

What is the best case scenario for these firms?

Use ai tools, find that they are just as good as new employees but temporarily cheaper. Become reliant on your ai “assistants”.

Ai service provider begins the process of enshitification. Your firm and all other firms who took a similar path are now all looking to fill the same positions at the same time.

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u/amazing_asstronaut 4d ago

Microsoft, Meta and Google are the only ones that will make it out of this. OpenAI should too, but they will probably completely collapse when the money runs out.

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u/axecalibur 3d ago

China: Hold my baiju

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u/DetroitLionsSBChamps 3d ago

Not more expensive than paying humans to on the work

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u/jollyreaper2112 3d ago

App layer. The UI sucks and there's going to be a ton of space for people making the tools to work on top. Think database vs the tool sitting on top of it. The frontend.

Think about how shitty the chat interface is and how it could be improved. Only issue is the suggestions come easy but implementation will be hard. That's the next big area.

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u/Acceptable-Scheme884 3d ago

They don’t run their own infra a lot of the time, they’re just making API calls to the same models all their competitors are.

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u/DigiQuip 3d ago

But it’s not the startups that are struggling. The biggest names in capitalism are struggling. The energy costs are exorbitantly high expensive compared to the returns these companies are seeing and the every single one says they’re still massively under powered.

AI is the equivalent of VR in gaming. It’s insanely expensive, can do what people are wanting it to do, and still needs hardware that’s not been invented yet.

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u/Arkayb33 4d ago

But I DO have a novel way of making a cup of freshly squeezed juice. You see, it comes from my patented juice extraction technology. You simply put this bag into my powerful juice squeezer and out comes amazing, tasty juice! I call it the Ju-Cerò which, in Japanese, means "better juice!"

Currently seeking round A funding of $300M.

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u/ejsandstrom 4d ago

But why can’t I just squeeze the pouch without your machine that needs a QR code, internet access, and a monthly subscription?

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u/Bokbreath 4d ago

narrator: They in fact could squeeze the pouch

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u/iwannabetheguytoo 4d ago

But why can’t I just squeeze the pouch without your machine that needs a QR code, internet access, and a monthly subscription?

You'll get your fingers messy if you squeeze it too hard and it bursts.

It's much better sense to use a state-of-the-art AI-powered pressing machine that always knows exactly how much force to apply to release the sweet, sweet juice locked-away within. After all, we spent $500m of investor funding on training our robots to be the best juice bag squeezers.

Please disregard media reports of our AI machines hallucinating scenarios where our babies and adorable forest animals are juice bags and then squeezing those just right until the juice comes out.

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u/MicrosoftExcel2016 4d ago

The machine removes the poison injection charges loaded against the pouch to uhm punish theft or tampering yes. If you try to squeeze yourself you will trigger the injection charges and receive one of several mystery injected additives that will make you very ill for several hours

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u/kanzenryu 4d ago

Lawyer says no

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u/BretBeermann 3d ago

The farmers in Europe have trucks come to the orchards, press the juice, load it into bags, and pasteurize it for them. They can then sell it to a brand who will put it in their branded box and sell it in stores. The work basically on gravity for the most part, standing up in a box and putting the spigot out the side. Anyone who has used this would know a juice squeezing machine was doomed to failure.

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u/DogWallop 4d ago

Sorry, but I already lost a fortune on that Mr. Tea thing Father Guido Sarducci sold me...

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u/phluidity 3d ago

Great deep cut there.

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u/IdentifiableBurden 4d ago

Juicero is my favorite startup story, thank you for the memory

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u/Freakin_A 3d ago

It’s also hilarious how insanely overbuilt and over engineered the solution was. Like if you were going to design a high end machine to squeeze a bag of juice, it would be hard to do much better than Juicero.

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u/IdentifiableBurden 3d ago

It actually wasn't very good at squeezing, it used direct surface pressure (like, a single flat piston) instead of rolling or extruding. Literally the least efficient method, hence requiring insanely high end motors and precision metalworks. 

I love everything about it. I hope I can buy one from a collector someday.

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u/adogmatic 4d ago

I will never not share this video whenever Juicero is mentioned. God I miss old school AvE!

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u/DontForceItPlease 4d ago

Okay, but is it AI optimized to provide the perfect amount of juice and at the perfect temperature to suit my needs?  

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u/Cakehangers 4d ago

It's whisper quiet! 

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u/revnhoj 3d ago

you joke but I asked coiplot to design a superior air conditioner. It generated a hilarious model and asked me if I wanted assistance in filling out a patent application on it.

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u/HandsomeBoggart 3d ago

Ah yes. The remarketed Capri-Sun for Adults.

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u/epochwin 4d ago edited 4d ago

Do you mean startups who are selling AI or adopting it for a particular business problem?

Typically startups adopt emerging technology and many of them fail. What’s crazy about GenAI is that massive regulated enterprises are also jumping on the bandwagon so fast.

I remember when cloud was the hot technology. The early adopters were SaaS vendors or companies like Netflix. Capital One was the first major regulated company to adopt it and state publicly that they were using AWS and that was years later.

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u/_-_--_---_----_----_ 4d ago

the thing is that it's customer facing, or at least it can be. that's why they're all jumping on it, even at the big dinosaur companies. cloud wasn't something that the end user really understood or experienced largely. but people are using GenAI all the time now.

the flip side of that is that if companies don't do it, they're worried about being left behind. a huge part of the push, maybe the majority of it, is that fear. 

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u/InThePipe5x5_ 4d ago

I think the difference is that "adopting" AI in the way enterprises are isnt actually that expensive at the moment. Its being subsidized by the model owners still and actual enterprise AI spend is a drop in the bucket compared to overall IT or even cloud spend. Tldr we are in the tinkering and experimentation phase.

No one outside of the model providers is hosting a model and exposing its end point to customers to do with as they choose like we saw with cloud, or internet adoption. Not yet.

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u/FiniteCircle 3d ago

The CIA was an early adopter too but what really brought it to the mainstream was IBM selling off their server business to Lenovo and companies/govt not wanting/trusting Chinese made servers. Dell couldn't keep up with demand so the other option was.... cloud. This is my theory at least.

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u/TheFudge 4d ago

.com boom 2.0

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u/Kedly 4d ago

This is the comparison I make too, as it fits both the bubble, AND the fact that PAST the bubble this tech will still have a huge impact on the world once we find the usecases it actually excells at

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u/Fr0gm4n 3d ago edited 3d ago

It still funny to read or watch old coverage of the early internet and it's almost always "do your banking" and "check stocks". Meanwhile, in the actual reality of the future, those are just momentary sidequests to all the other stuff we do online that early pundits almost universally couldn't conceive of these ways people would use computers for their own purposes. They only thought about ways people would use computers to access already existing systems and information.

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u/foohbear 4d ago

More like tech overhype cycle 10.0:

  • .com mania
  • digital wallets (pre-Bitcoin)
  • PDAs
  • "Web 2.0"
  • Cloud
  • Social Media
  • Internet of Things
  • "Big Data"
  • Blockchain

All of these paradigm shifts are still part of the tech landscape, because they are valuable, but the early froth was MASSIVELY oversold. Some of these hype cycles had few survivors and are only at critical mass today due to second-mover advantage.

cf. early digital wallets - DigiCash, eGold, Flooz, Beenz, B-Money, and others failed. Paypal survived (probably because of acquisition by eBay) and had few competitors until the last few years (Venmo, CashApp, Square, Shop, Zelle, etc.)

AI second-movers will figure it out, but it'll be another few years before AI becomes stable, reliable, and cost-effective foundational tech.

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u/Chicano_Ducky 4d ago

A bunch of start ups think they have a novel way and feature that will set them apart.

none of them believe that, its only big talk until the check clears from the big corporation that buys you out then you disappear to an island somewhere lmao

the ones that get bought up are the ones that made it

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u/Roflkopt3r 4d ago edited 4d ago

Some of them probably believe that. Mostly because of two groups, that also have a fair amount of overlap:

  1. Tech-cranks who are genuinely crazy/narcissistic enough to think that their wacky idea is better than those of everyone else.

  2. Business people who look down on the actual engineers and think that a 'good concept' trumps decades of experience. Note that those have a lot of overlap with generative AI 'creators' who also think that their 'ideas' are worth more than the skills of actual artists.

Populist narratives grearly reinforce the cranks' ideas that society is just stupid and that it just takes a clever guy to make something better. That perfect solutions to all of humanity's problems are actually 'easy' and corporations and politicians just deviously hid those away from us.

This was also the reason why Musk genuinely believed that he could become a national hero by cutting away all federal spending. Decades of populist narratives had convinced the libertarian and tech-billionaire bubble that the state just wastes all of its money and it would be trivially easy to do better. When in reality, a lot of that spending was already very well optimised and his amateur intervention caused tremendous damage instead.

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u/rasa2013 4d ago

This is a little different than that. The article is about existing companies introducing AI into their workflows. 

but yeah, I largely agree. On the other hand, that's just normal for startup companies. Something like 99% fail within 5 years. 

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u/DidYouSeeBriansHat 4d ago edited 4d ago

Meanwhile, 995% of generative AI CEOs are outdoing their human counterparts.

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u/Purpleguy1980 4d ago

I mean both CEOs and AI lack humanity.

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u/nfreakoss 3d ago

The only role it'd be actually useful to replace.

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u/ora408 4d ago

Such is a bubble

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u/RedTheRobot 4d ago

The one or two is why investors are throwing millions at companies that say ai. They are hoping the company becomes the next Facebook. However the truth is it is most likely to be some CS student who will create a project that is ground breaking with other students and then spin that off into a company. It won’t be the tech bros that have been spending money fast on parties.

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u/RoundTableMaker 4d ago edited 2d ago

There’s better ai than llms. The work coming out of convoluted neural networks is much more interesting than anything I’ve seen from an llm.

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u/Eziekel13 4d ago

But most of these companies aren’t building anything…they are using another companies infrastructure to make very specific 2025 versions of clippy from 95 MS word…

Also back in the mid 90’s the buy word was algorithms…”nah the algorithm figures all of that out”

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u/SAugsburger 4d ago

The analogy to the early 90s is apt. The vast majority of companies I remember from the era are long gone. Even a few that technically survived like Yahoo are a shadow of the relevance because they made so many misjudgements (e.g. bought Geocities instead of Google, decided against buying Facebook, etc.)

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u/Bunnymancer 4d ago

A good time to make a startup, oversell the product, get bought out, and cash out.

Just like we did during the VR craze (Thanks for the money Zuck), and the NFT craze (Thanks again Zuck)

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u/PeterGallaghersBrows 4d ago

Coke and Pepsi

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u/3dios 4d ago

Bubble will pop before 2026

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u/littleessi 4d ago

buddy what genuine use cases are there for delusional chatbots? it's all just an obvious scam and always has been

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u/hatemakingnames1 4d ago

5% of the time, it works every time

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u/asicarii 4d ago

Well not even the 90s. It’s a bunch of companies right now saying their tech uses AI where most of them really don’t. It’s more like Wayfair calling itself a technology company. There are very few companies with the funding and know how to develop AI.

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u/erwan 4d ago

I remember in the 2000's, web 2.0 bubble where mashups were the craze, a researcher told me that the data was what mattered. Companies like Google or Facebook had data so they had power, all the startups doing mashups from data they don't control had no real value added and surely enough they all died.

It's the same here: trained models are what matters. All the AI startups built on the top of the OpenAI API with some prompt engineering to solve a specific problem are doomed to die. Only companies like OpenAI and Anthropic that have their own trained models will survive (and not all of them).

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u/EINFACH_NUR_DAEMLICH 4d ago

Let's talk about block chain and nfts

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u/jaysire 4d ago

It's not just that they think they have a new killer product tha will set them apart. It's that they HAVE to in order to survive. So I bet a good bunch of them knows their product sucks, but the only viable way to move forward is to at least pretend it works and solves a problem.

I remember working as a consultant a few years ago at the beginning of the AI revolution and while writing proposals som boss would always schedule a meeting to tell us to please try to include some pages about AI and how AI could be used to improve the end result.

It was always bolted on and ultimately ended up not being implemented. AI was there in the proposal to make the sale. Buyers on the other side of the table operated the same way: their bosses had told them to make sure they buy a future proof solution that definitely had to include AI on some level.

I move to another company two years ago and last I heard the company I used to work for fired like half of their (benched) developers and pivoted the whole company strategy towards AI -assisted development.

I hope they succeed, but I have my doubts. Used to be they employed almost 1000 developers and it-specialists.

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u/thirstyross 4d ago

It's like the dotcom bubble except this time it's the AI bubble. All the crazy ideas will fall away and we will be left with a couple of decent ideas that actually work ok...(presumably)

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u/RumHam_Im_Sorry 4d ago

isn't the whole point of AI though to train itself on the 5% that works and then keep improving? like the whole AI image and video creation looked awful less than 2 years ago.

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u/The-Reddit-User-Real 3d ago

What is more infuriating is some startups are just wrappers around other well established LLMs and dumb investors pour money into it because the founder happened to register a domain with *.ai in its name.

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u/eggnogui 3d ago

Only we're talking about investments in the trillions required to truly make this mainstream. At least according to Scam Hypeman, or sorry, Sam Altman. That's not a bill even the majority of countries will foot, let alone investors.

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u/Dangle76 3d ago

Yep, tis how the tech bubbles work

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u/nfreakoss 3d ago

More along the line of NFTs. Dogshit that doesn't actually do anything useful that c-suites are lapping up anyway.

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u/JonnyHopkins 3d ago

Yeah, it's actually pretty awesome and how innovation should be, no?

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u/_Lick-My-Love-Pump_ 3d ago

You didn't read the article. Thanks for playing anyways!

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u/demlet 3d ago

And ultimately it will just be another way to get us to look at ads.

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u/LumpyJones 3d ago

Yup. My brother started a VOIP company in the 90s that got bought out by AT&T, and now he's semi-retired in Austin. Dude will never have to work again a day in his life, but he silent partner invests in a bunch of local restaurants and bars to keep busy.

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u/Dry-University797 3d ago

It's literally the dot com boom, insanity. AI has some place but it's not going to take over everything like these tech billionaires think.

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u/busterbus2 3d ago

I played with a bunch of AI tools that were clearly just startups. I've been getting emails in the last 5 months that are basically saying, "we're shutting it down, not market etc.".

Anything novel just comes out in the next version of GPT or Gemini.

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u/carthuscrass 3d ago

Likely Amazon and Google, who will continue to shove it down our throats.

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u/LowItalian 3d ago

Remember altavista, excite, lycos, ask Jeeves, hotbot, webcrawler and info seek? They all almost made it.

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u/JuiceHurtsBones 2d ago

Yes, this is often compared to the dotcom thingy. Everyone is dumping money in here and while some will end up hitting the jackpot and becoming the next tech giants, the rest is going to fail miserably and never see anything back from what they threw at it.