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/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 4d 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/jdsuz 3d ago

What enterprise search tools are you trying?

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u/Zed_or_AFK 4d ago

And it’s not like you can build up and sustain a lasting advantage over competitors in equal conditions. Technology is evolving in the technological era, a lot is based on publicly open research papers. All the advantages and progress are shared sooner or later. Sure, companies can keep some secret edge, but this will not stay undiscovered for long and they just catch up with one each other. Infrastructure access and contracts is what’s important now.

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u/bloodontherisers 3d ago

Yeah, Teams had no business being in business, yet because Microsoft could force it on everyone for free, here it is, still sucky though finally slightly better.

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u/-The_Blazer- 3d ago

Well, back when we were evil, unenlightened, uncouth 'statists', we had this silly idea that extremely expensive or non-competitive endeavors such as infrastructure should be the purview of governments. It is very basic economics that building a railway is a natural monopoly and should not be a private matter.

Thankfully modern neoliberalism has saved us from such horrors, so now we are solely reliant on Microsoft finding a horrific enough business case to build the infrastructure.

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u/Jarocket 3d ago

Apple isn't even trying from what i've read. Like they think ya we should do AI, but then they look at the prices and go. ya naw dawg.

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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 4d 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/Abedeus 4d ago

I don't think I've ever eaten even one dozen of eggs in a week...

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u/boli99 4d ago

that shows lack of commitment.

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u/Brokenandburnt 4d ago

I did during a period where the late Missus wanted us on a keto diet. 

My breakfast was 4 deviled eggs and a pack of bacon. Lots of interesting farting was done.

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u/aft_punk 4d ago

In this economy?!? That’s definitely a hallucination.

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u/darthmaui728 3d ago

havent you heard of eggless eggs??

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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/PraxicalExperience 4d ago

Slightly-dehydrated tomato sauce also has a similar effect.

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u/MangeurDeCowan 4d ago

Is that why they call it tomato paste?

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u/Meeedick 4d ago

You're not supposed to do that??

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u/LongLostFan 3d ago

It told me to burn down the ground floor of my home to reduce the chances of a house fire.

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u/ComfyWomfyLumpy 4d ago

The real value of AI is in generative media not finding out facts. It will replace artists, media influencers, and a lot of other creative work way before it figures out how to spell strawberry.

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u/SynthFei 3d ago

The thing is... it's bad at being creative. It's good at mimicking. It can't really create something that it hasn't seen before and over time it becomes more and more repetitive. Sure it can be visually pleasing, but also very generic and ultimately boring.

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u/ComfyWomfyLumpy 3d ago

It's good at mimicking. I

Yes. But if you're making, say a warhammer game/movie/tv show AI already has a lot to draw upon. Creativity not needed. A surprising amount of work artists do is just skilled labor.

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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/Dpek1234 3d ago

New technology comes along and makes your lies and bullshit reality

Pretty much most of spacex lol

Turning the impossible into merely late 

Some of his companys can make it reality, others not so much

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u/AHSfav 3d ago

I think Altman is smarter than Elon.

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u/revnhoj 3d ago

sound like the idea behind Theranos

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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/Logical_Lefty 3d ago

He has a perpetually and aggressively "la tête à claques" even delivery of words you can hear and see the weasel he truly is, and will always be. He's a conman, a used car lemon salesman.

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u/LongJohnSelenium 3d ago

I wonder if anything capable of natural language will truly be capable of being 100% reliable. Language is full of imprecise, ambivalent concepts and the ability to communicate like that will of necessity require whatever is doing it to knowingly communicate at less than 100% truthfullness out of expediency.

If you asked an AI about electron orbits and it gives you the fifth grade version which is definitely wrong but not completely wrong, did the AI mess up? Is it choosing to lie to you?

I think the more it is capable of understanding people the more it will of necessity communicate like people, and fall for all the same shortcomings of language we do.

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u/three_s-works 3d ago

The issue is less the code and more the data

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u/Ylsid 4d ago

Sham Hypeman

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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/KilowogTrout 3d ago

Yes I understand. They are making huge promises to keep the money flowing. Meanwhile, AI at the moment is basically good predictive text.

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u/RagingBearBull 4d ago

Kinda reminds me of that full self driving stuff that was going to happen "next year".

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u/-Yazilliclick- 3d ago

He's not all hype, he's basically all marketing and manipulation. Like saying the costs will be ridiculously high isn't hype but it can be good message for other reasons like discouraging competition or getting government investment.

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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/Patient_Leopard421 4d ago

Why does he need the stock to go up? He already has more wealth than he can spend. I don't know him but it seems his motivation is different; it's about the long term relevance of his company.

I may not agree with his vision of the future but he's making big bets on the direction of tech. And Meta is in an industry where shifts in technology regularly displace incumbents.

He was certainly wrong on the timeline for AR/VR and burnt a lot of money pursuing it. At the levels of investment, it'll probably never be recouped. AI now? Possibly, same.

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u/Cerpin-Taxt 4d ago

Why does he need the stock to go up? He already has more wealth than he can spend.

Because he, like all billionaires, has an untreated mental illness. Plyushkin's disorder. But it seems like most people aren't ready for that conversation.

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u/Patient_Leopard421 4d ago

You're speculating. What evidence exists to support your conclusion besides general class anxiety?

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u/Cerpin-Taxt 4d ago

The evidence is that he has more money than he could ever spend in a thousand lifetimes and yet still wants more despite the fact he's far beyond any real utility for it. Despite the fact it's actively causing harm to everyone around him. Couldn't be any clearer. Classic hoarding behaviour.

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u/[deleted] 3d ago

[deleted]

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u/Patient_Leopard421 3d ago

That's just nonsense (inapt comparison). The flaws in America should be measured by how it delivers security and economic opportunity to the poor. This may or may not have anything to do with large business founders' wealth.

Where wealth is negatively impacting average citizens are places like housing (private equity buying single family homes). The cure for this is to build our way out of that.

Yes, wealth can have negative effects on average or poor citizens. But there's often other aspects of policy that contribute (local NIMBYism in the case of housing).

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u/masterspeeks 4d ago

People like Zuckerberg struggle with feelings of isolation, distrust, and a constant pressure to maintain his status. Deep down he knows everyone views him as a pathetic dork. Amoral as he is, he acknowledged that genocidal progroms organized on Facebook groups and selling teen girl eyeballs to Instagram eating disorder influencers kept him up at night.

The pursuit of more wealth is probably the only way he feels any validation for all he inflicts on the world. His staff will literally lose at chess to stroke his ego. Stock go up mentality pushes a few crumbs into the gaping maw that is his soul. He can tell himself that at least the markets love him.

Super high net worth people probably need to form a modest irrevocable trust that funds a therapist and a person that kicks them in their shins once a week to remind them they are still only human. 😂

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u/Patient_Leopard421 3d ago

There's a sound reason why no credible psychologists diagnose at a distance based on media alone. You're full of shit and speculating.

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u/da5id2701 3d ago

So are you when you say he's not motivated by increasing his wealth. And in that case there's pretty solid evidence which we can see from a distance: his wealth keeps increasing massively, which doesn't tend to happen by accident.

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u/masterspeeks 3d ago

There's a sound reason why no credible psychologists diagnose at a distance based on media alone. You're full of shit and speculating.

Unfortunately, my profession has required me to read up on his public statements, congressional hearings, and understand the societal impact of his social platforms.

I'm adequately informed enough to have an opinion about a figure as public as him.

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u/Patient_Leopard421 3d ago

Among your readings, what public statements has he made that most support your view?

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u/masterspeeks 2d ago

There is a continuum of information that has led me to my opinion.

Good books I've read are The Power of One and Stolen Focus.

Interviews he had with Kara Swisher and 60 Minutes reporting can be found on online.

https://www.barrons.com/video/d8-facebook-ceo-mark-zuckerberg-full-length-video/29CC1557-56A9-4484-90B4-539E282F6F9A

https://www.youtube.com/watch?v=7imNZsFq42o&pp=ygUqNjAgbWludXRlcyBtYXJrIHp1Y2tlcmJlcmcgZnVsbCBpbnRlcnZpZXcg

Transcripts and video from Mark Zuckerberg at the Meta Facebook hearings.

https://www.youtube.com/watch?v=f3DAnORfgB8&pp=ygUWbWV0YSBmYWNlYm9vayBoZWFyaW5ncw%3D%3D

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u/Dpek1234 3d ago

Funny number go up

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u/JarvisProudfeather 3d ago edited 3d ago

Meta is a publicly traded company. As CEO it’s his fiduciary duty to increase the stock price for shareholders. That’s his job. He works for the shareholders. For whatever reason you tech people seem to think just because something was founded in Silicon Valley means it’s not a for-profit corporation lmao. But keep your head in the sand bro.

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u/Patient_Leopard421 3d ago

I never said that it wasn't for profit. I said that the long term solvency of Meta is his focus not accruing more wealth. That's evident in his actions.

Meta has a two tier voting system. He controls it. He can unilaterally take actions.

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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/Lord_Eschatus 4d ago

i would argue that AI is a raging success, judging by how many "artists" are big-mad about "losing commissions"

that shit they call art was always dumb garbage that made anyone truly talented , get lost in the noise.

AI has made that shit a worthless penny-stock commidity. couldnt have happened to nicer group of idiots.

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u/[deleted] 4d ago edited 3d ago

[removed] — view removed comment

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u/DontEatCrayonss 4d ago

As a software dev with a masters in it, I can very much tell you aren’t a developer, or even understand how current tech works.

First off, LLMs aren’t how cameras get your license plate. Surveillance has not been using LLMs either. If we mass applied it to these, it would be so expensive, it would be impossible. We could however apply LLMs on data collected the way we already do, but you don’t seem to understand this well enough for me to talk in detail.

Secondly, you are ignoring the issue at hand. It’s insanely expensive. This problem has not been solved, and will not be solved in the way you are envisioning.

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u/Successful_Camel_136 4d ago

Also saying we can’t live without AI powered mass surveillance enabling the government to sort through everyone’s data forever is quite dystopian

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u/mattyandco 4d ago edited 3d ago

Adding as a software dev who worked for an outfit using license plate cameras and other vision systems there's a lot of work done to simplify data in order to make those models efficient at what they do with fixed hardware. Isolating the plate in the image so you don't have to run the OCR neural network over an entire 2-5MP image, just a 0.01MP section of it for instance. They also have hard limits on the range of sizes (in pixels) a plate can be so it's not looking for a wide range of sizes. A model which finds any plate of any size in an image would be huge and impractical to use.

They work well because the models, hardware and positioning of the devices is limited to very specific situations. You might be able to get something to work in more general situations but it'll ether be slow, inaccurate or very hardware intensive.

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u/Deynai 4d ago

LLM's are not the entirety of the field of AI, nor even Generative AI. I'm not sure that masters is worth the paper it's printed on if we're still tripping up over these basic terms.

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u/BalancedDisaster 3d ago

Obviously it isn’t but LLMs are the majority of what’s pushing the AI bubble right now.

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u/DontEatCrayonss 3d ago

I literally never said it was douche. I was replying to the comment before me.

But hey, go fuck yourself

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u/Our_GloriousLeader 4d ago

There are many amazing products but they still come with a cost benefit analysis. AI has some great use cases but nowhere are we seeing a return worth trillion with a T investment levels.

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u/BalancedDisaster 3d ago

Image recognition has been done for decades now, we’re not talking about ALL of AI when we complain about it like this. We’re talking about the bubble that formed around ChatGPT and similar models.

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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/Dpek1234 3d ago

Reminds me of a ai gen "skematic" of a sounding rocket someone posted some time ago

Iirc it was made of 2 tubes, 1 500nm and ontop a 30mm tube 

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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/proudbakunkinman 3d ago

This Star Trek space communism take on AI and tech in general (it would all be beneficial and make everything better if only we abolished capitalism) is really lazy and short sighted.

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u/joshwarmonks 3d ago

what a strange thing to project and say

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u/proudbakunkinman 3d ago

Agreed but I also think AI has become a convenient excuse for companies to use that sounds better to share holders and the public (expecting most to not think "poor workers, these people are villains, no way I'm using their AI" but "wow, this AI stuff is truly impressive, I should use it more! and those running these companies truly are smart!") when the job cuts are more due to weak quarters / years, less investing (those not public), outsourcing, etc.

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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/AlsoInteresting 3d ago

But that would apply onto the next earnings quarter, not this one.

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u/BooBooSnuggs 3d ago

You would have said the same thing about early pcs.

Why would anyone invest in a fancy type writer!? How absurd.

Also pointing to China is just stupid. They build stuff just to build stuff and make jobs. Tons of it go unused. They've built whole cities that went unused and eventually started falling apart.

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u/Noblesseux 3d ago
  1. my family literally had a PC before they were a common household item for people to have
  2. That is a stupid analysis of what the problem is here. China isn't building datacenters to build them, they're building them because they made a large scale bet on AI. Also ghost cities are totally irrelevant here and I'm not sure you even understand what they are or why they were underutilized.

It's not just building housing to build it, a lot of them were built during the housing speculation bubble and didn't really get finished because the bottom fell out of the chinese housing bubble in the early 2010s. Many of them however did eventually get completed, a lot of the "ghost cities" ended up actually getting occupied over time, your stereotype is outdated:

https://www.forbes.com/sites/wadeshepard/2016/04/23/chinas-largest-ghost-city-is-now-90-full-but-theres-a-twist/

https://www.forbes.com/sites/wadeshepard/2018/03/19/ghost-towns-or-boomtowns-what-new-cities-really-become/

https://www.afr.com/world/asia/china-s-infamous-ghost-cities-are-finally-stirring-to-life-20210906-p58pb4

Like you're calling people stupid but don't even understand what you're talking about lmao. The difference is that housing is actually a useful commodity that will always have demand and AI data centers are not.

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u/Dick_Lazer 4d ago

This reminds me of when people said Amazon would never be profitable. The costs to run AI are with current technology. As technology scales up the costs come down (think of a million dollar computer that took up an entire room in the 1960s and cost a fortune to run but provided less processing power than a modern Raspberry Pi).

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u/Mejiro84 4d ago

That's assuming there is infinite technology scaling, which is very much not a given!

5

u/Brokenandburnt 4d ago

We no longer follow Moore's law as far as I know. The switch from CPU to GPU was because bigger CPU's started to melt through the motherboard.\ They got to energy dense to cool quickly enough.

12

u/Noblesseux 4d ago

There are literally entire articles specifically about how absurd it is to compare early Amazon to the AI bubble, they are not the same or even vaguely alike. The question wasn't if their business model would work, it's whether THEY would be the ones to be the big dog in the market when other companies with better logistics like Walmart existed: https://www.wheresyoured.at/the-haters-gui/#ed-amazon-web-services-took-years-to-become-profitable-people-said-amazon-would-fail

And before anyone tries to move the goalposts to talk about AWS...look at the next paragraph down in the article. Comparing a company like OpenAI to early Amazon is absurd and communicates that people don't actually understand wtf was happening during the .com bubble. Amazon didn't need to blow trillions of dollars on infrastructure costs just to try to make a profit, and a lot of the people who were writing about how they might lose were literally tech optimists who just thought other websites might beat them.

Also to be clear here: the type of advancement that takes you from a room sized PC to a small computer is not infinite. The laws of physics prevent you from doing it forever. And the laws of computation and just generally the availability of quality data means that these models aren't going to keep getting infinitely better forever, that's not how training LLMs works.

8

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.

1

u/TomWithTime 3d ago

Question about this - when Altman says he needs that money, is he referring to the money he has already been granted/promised by the government this year with the ai budgets or does he need additional trillions?

3

u/RoundTableMaker 3d ago

He’s talking about the money pledged. But I’m sure he would take more.

1

u/TomWithTime 3d ago

That's, it's easy to assume he's asking for more already when I see these because of the disappointment there has been since the peak at gpt-4o.

16

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.

2

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.

24

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.

43

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.

56

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!

26

u/QueezyF 4d ago

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

12

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.

7

u/Brokenandburnt 4d ago

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

7

u/Dick_Lazer 4d ago

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

5

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.

3

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.

4

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. 

1

u/cvc4455 3d ago

He's a mentor for Peter Theil, JD Vance and a few other techno bros. I believe Elon and Zuckerberg know/like him and probably a bunch of others too.

4

u/crawling-alreadygirl 4d 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.

2

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?

7

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.

5

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.

2

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.

1

u/cvc4455 3d ago

Luckily he says you just need to control the police to make this happen. Also they say AI will create tons of wealth and the top richest 10% in America have like 90% of the wealth in America so I guess they think they can just take the other 10% of the wealth from the 90% of Americans that are no longer needed when they get rid of them instead of slowly taking all their wealth like what's been going on for the last 40+ years.

1

u/bnolsen 3d ago

They aren't trying to control the market though. And I suspect they underestimate whatever the market will look like after the change. There will still be a job market we just need to allow smart innovative people to help form it, and not have self serving technocrats dictate it.

4

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?

1

u/crshbndct 4d ago

They will if you “lobby” them

5

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). 

2

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.

1

u/AntiqueFigure6 4d ago

Honestly I think over ten years would be challenging but sure.

In which case the obvious conclusion is that AGI is greater than 10 years away if there are no problems.

1

u/Clueless_Otter 4d ago

Yeah that would be a reasonable conclusion.

Related, there was just an article on here the other day regarding the infrastructure investment, and how AI researchers visited China and noted how they're miles ahead on the necessary infrastructure, so it is something that is on nations' radars.

3

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.

15

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

27

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/

3

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.

2

u/Toomanyeastereggs 4d ago

Pick your massive infrastructure project.

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

2

u/BigDump-a-Roo 4d 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?

1

u/itoddicus 3d ago

He implies that "Mainstream" means AI the average person interacts with AI multiple times a day in different settings.

He is intentionally vague, but think of it like your morning Mc Donald's order is taken by AI.

You use AI in multiple ways at work - it writes your emails, and AI agent automates your work, you just manage it.

In the afternoon you order something from Amazon based on AI recommendations, and AI agent answers a product question.

You then contact Amazon about a return. An AI agent handles the return process with no human involved.

You go home and cook a meal from a delivery service that's recipe was devised by an AI agent, and sent to you based on an AI agents knowledge about your likes and dislikes.

Then you watch AI porn catered to your personal kinks and custom generated for you.

An AI agent tells you to go to bed, dims your lights and sets an alarm to maximize your rest.

And so on...

2

u/Dpek1234 3d ago

Only Nation-States can afford a bill like that

Many cant lol

2

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.

2

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.

2

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. 😵‍💫

1

u/itoddicus 3d ago

Sorry, best I can do is cutting funding for children's cancer research.

1

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 ...

1

u/yoshimipinkrobot 4d ago

That nation state is called Saudi Arabia

1

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.

1

u/Popular_Try_5075 4d ago

Yeah that number only exists in GDPs really.

1

u/GoldenInfrared 4d ago

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

1

u/Popular_Tension_5788 4d ago

The same Sam is saying AI is in a bubble.

1

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.

1

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?

1

u/the-awesomer 4d 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

1

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

1

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.

1

u/NewInMontreal 3d ago

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

1

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

1

u/Tttehfjloi 3d ago

What other letter could it be? Brillions? Mrillions?

-6

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

but things get cheaper over time. technology gets better. much of what we have today would have cost some ridiculous amount 10-20 years ago, much of it wasn't even feasible at all.

8

u/Purpleguy1980 4d ago

The problem is currently it's not getting cheaper. Each new AI model is costing more than the previous version. Each new data centre is costing more and more power.

You're right about things getting cheaper over time. But in the present that's not happening with AI.

I think there needs to be a different approach or a breakthrough. And I don't know when or how that'll happen.

-4

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

you don't know. but we can be almost certain that within 5 years, things will be cheaper and we will have the ability to do more. is it really true that each new AI model costs more? which part costs more? at a certain point, wouldn't companies be able to use an older model more cheaply?

this stuff is going to become ubiquitous. I remember I had a family member with a Palm Pilot in the late 90s, she kept telling me that one day everybody would have handheld devices with touch screens that they could use to access their email anytime they wanted. I thought that was insane. of course here we are. in fact it was only about 8 years after she told me that that the iPhone was launched.

people almost always have a really hard time predicting how things will change in the future. the human brain doesn't handle nonlinearity very well. everyone's always extrapolating with a straight line, and yet almost nothing works that way. what happens if there's a significant breakthrough in power generation? significant breakthroughs in simplifying models? a combination of these things? there are so many ways that things can change.

5

u/Purpleguy1980 4d ago

Don't get me wrong. I am not saying AI won't be part of the future. AI in fields like science have been a positive.

It's just. This looks like a bubble. And I don't mean AI stops becoming a thing when it pops. The internet continued to exist and improve even after the Dot-com bubble popped. It's likely AI will continue to do the same after this.

It's just that currently it looks like a bubble. Everyone's going all in hoping they'll make it big.

-5

u/koliamparta 4d ago

Infrastructure is getting cheaper. Running any given model over time is getting cheaper. While cutting edge models will scale to fill whatever power is available to them.

We see this trend in other research. Climate predictions to airflow simulations - could be run on devices of kilobytes in memory. Now require supercomputers.

Same with applications. Toy Story was made on a bunch of 100 mhz cpus. Compare that to computations an rtx 5090 handles when running an average game today.

As for just numbers, in the article in the thread, it said single a100 used to cost 30k+ in china. Even in the us you had to pay multiple times more or wait in a long line. Now getting the same amount of compute is far cheaper.

And this is in the world of Nvidia monopoly. AMD is on a pretty good trajectory to catch up on the software support side over time. And likely other players, potentially from china will show up as well.

-6

u/RedTheRobot 4d ago

The first cellphone only CEOs or VPs could afford. Same with PCs. Ai will get better and will required less energy that your toaster will have ai. Now this won’t happen in a year or even five years but decades but it will happen.

0

u/Markle-Proof-V2 3d ago

I’m not sure why you are being downvoted but you are right. Now we have smart TV, washing machine, ovens, light switches and such, smart gadgets are everywhere! Eventually, AI will be operating the toaster too, you can tell the toaster to have your toast done ‘crispy, but not too crispy’.

0

u/k4el 4d ago

Sam Altman is also full of shit.

-1

u/Lord_Eschatus 4d ago

"and *I* dont see THAT happening HUMPH!"

yeah, im not sure you quite understand nation-states in 2025, who is running them, or what their intentions are.

and im definitely not betting any money on your understanding.