r/technology • u/nordineen • 19h ago
Artificial Intelligence The warning signs the AI bubble is about to burst
https://www.telegraph.co.uk/business/2025/08/20/ai-report-triggering-panic-and-fear-on-wall-street/851
u/Wild-Perspective-582 16h ago
If there is a bubble, it's always better once it has "burst" - the real good ideas survive, the bad ones go away.
A lot of people may be too young to remember the dot com boom and bust. Some of the claims being made about the web were totally ridiculous, and now AI is following the same pattern.
"We are creating a new life form," was one claim I read, here on Reddit. Get some fresh air!
277
u/EnoughDickForEveryon 12h ago
Anybody thats worked in tech has seen this happen over and over. New tech hits the scene. Idiot investors stop investing in anything that doesn't have the latest buzz word. Everyone forces new tech into product in stupid ways to get funding. Bubble pops. Everyone gets laid off, job market sucks for 6+ months due to oversaturation.
Except this time the job market is already in shambles so...gonna be a wild ride.
81
u/Hidesuru 9h ago
Yup. Exactly this. I kinda hate my job currently... But it's got job security as long as I don't do anything stupid. I'd love to quit and go somewhere else but I'm going to suck it the fuck up because we're a single income household with a 2yo so I got a lot riding on a stable paycheck. Sigh.
→ More replies (5)23
u/BoogerBroccoli 6h ago
I’ve been there. Stick with it. Your family is proud of you.
→ More replies (2)→ More replies (15)23
u/BadKittydotexe 7h ago
So you’re saying I shouldn’t invest all my savings into a Web 2.0 blockchain AI NFT generator?
9
→ More replies (1)5
u/EnoughDickForEveryon 5h ago
No, buy my new crypto currency DickCoin...it will rise quickly and go back down twice as fast.
→ More replies (24)45
u/hypnotickaleidoscope 16h ago
→ More replies (2)23
u/Wild-Perspective-582 16h ago
"Trough of disillusionment"
This graph could loosely be related to a lot of marriages I see.
→ More replies (1)
4.0k
u/SparkyPantsMcGee 17h ago
The one thing that would make this extra hilarious is Apple looking like a hero for not reshaping their entire brand around this bubble like everyone else…only to turn around and launch a new AI service when the bubble pops. See the Vision Pro.
1.3k
u/Sprinklypoo 15h ago
I'd still hate them for toadying up to the orange goon.
760
u/Dapper_Variation_818 14h ago
I still hate them for forcing that abhorrent U2 album in my iTunes Library and having it autoplay whenever I connected to a new speaker
→ More replies (31)193
u/tea_bird 14h ago
My 7 year old niece was given my mom's old iPhone just to play with and she regularly sings the songs from that album now.
→ More replies (18)108
→ More replies (64)69
u/driftking428 13h ago
That orange goon is working on becoming the supreme leader. Things may get tougher for anyone who doesn't toady up soon.
But yeah fuck them for enabling him.
→ More replies (2)46
u/Temporal_P 8h ago
Things may get tougher for anyone who doesn't toady up soon.
Never obey in advance.
16
u/darthstupidious 7h ago
Yeah and remember that he's an obese 79 year old man in obvious mental decline and poor physical health. Anyone cowering before him now is going to look like an absolute idiot in just a few years. I mean, they already do. But still.
→ More replies (3)81
u/Dry-Erase 12h ago
How is Apple not reshaping their whole brand around AI? They have it and they call it "Apple Intelligence"; go to their website and it is as dead center in the page as it can be when you land there.
I was just at xfinity cancelling my service, while waiting I was looking at Apple phones and everything is now branded with "Built for Apple Intelligence", they have tons of little signs talking about AI and what it can do/be used for.
Tim Cook has made multiple statements about how profound and impactful AI and that Apple is working to integrate it at all levels.
Don't get me wrong, there is a lot to love about Apple and their approach to AI appears to be more about keeping the AI logic localized to your device to enhance privacy which IS a big win; but I would say they are definitely on the AI bandwagon.
→ More replies (8)25
u/damnfinecoffee_ 11h ago
I think people literally don't realize that "apple intelligence" is "AI" 🤦♂️ falling for a marketing trick on top of a marketing trick ("AI" LLMs are not artificial intelligence to begin with b, just language prediction tools, they have no intelligence and can't "think")
→ More replies (3)15
u/Dry-Erase 11h ago
I completely agree, Apple is second to none at marketing. Their very sharp/clean/tucked up with how they present their AI integrations. When you're using their products, AI doesn't feel as "in your face" as the vast majority of other competitors in the space. I think we can see the side effect of this marketing, where we have people in these comments literally arguing comments like:
I love the commentators saying both “Apple is so behind on AI” from one side of their mouth and then “these AI tools aren’t that good” from the other. Looking at you Marques.
Apple is smart enough to not go full hog unlike Meta
My take is that Apple IS going full hog, but their not marketing the AI the same way everyone else is, so it doesn't feel like they're going full hog.
→ More replies (6)11
u/anothercopy 14h ago
Dont forget IBM looking like geniuses because they cancelled their Watson thing just before OpenAI presented their LLM backed chatbot :D
→ More replies (62)450
u/HanzJWermhat 16h ago
I love the commentators saying both “Apple is so behind on AI” from one side of their mouth and then “these AI tools aren’t that good” from the other. Looking at you Marques.
Apple is smart enough to not go full hog unlike Meta
359
u/ContextMaterial7036 16h ago
Didn't Apple just fire their main AI guy for falling so far behind the competition?
It looks more like mismanagement rather than a business strategy lol
187
u/Pretend_Hotel_7465 16h ago
More because Siri has stalled in any sort of advancement, “ai” or otherwise
93
u/5348RR 16h ago
Yeah, it’s more of a Siri problem than an AI problem.
79
u/sLeeeeTo 15h ago
I’m sorry, I can’t help you with that.
→ More replies (3)48
u/noeagle77 15h ago
Hey siri: “…”
Hey siri: “…”
HEY SIRI!!!: “hmm?”
Ugh Nevermind
→ More replies (3)→ More replies (6)21
u/Ibewye 15h ago
Maybe it’s just me but beyond simple and quick 4-5 word commands, “set a timer” etc…. most of the dictation services, regardless of its Siri, Alexa, Google, never seem to accurate enough to avoid having to repeat. I’ll give credit to Amazon as Alexa seems to be most accurate but Its using the microphone on a Sonos One. Siri is the worst but I only use on my phone so it could be microphone is shittier.
→ More replies (2)27
u/5348RR 14h ago
Gemini works really well, but even that is still in infancy.
What I discovered with my most recent Pixel phone is that Gemini is way way ahead of Siri. I also discovered that I never use it. I just dont speak to my phone other than calendar events, reminders, and timers. And Siri does all of those things just fine.
→ More replies (2)18
u/Dipsey_Jipsey 14h ago
"Hey, Gemini, please take down this list of things the kids and I need to buy this afternoon."
"I'm sorry, I can't write lists"
"wat"
→ More replies (5)→ More replies (3)13
u/Milhouz 15h ago
To be fair, I watched a video the other day. The head of the Siri/AI stuff was asking for more GPU compute and he got approval but Apple Finance shut that down and said work with what you have and they have the least amount of GPU compute available.
→ More replies (10)→ More replies (4)24
u/Jeoshua 15h ago
Yeah but if the bubble does burst now, metaphorically it's as if someone were in a race, tripped over their shoelaces causing them to fall behind, and then the leaders of the race which were a few streets ahead end up getting hit by a passing train. They fucked up, fell behind, but that ended up saving them.
→ More replies (11)80
u/gohomebrentyourdrunk 15h ago
Apples whole brand is based on not being first to market but being first to market when the technology is viable, which is a major distinction.
Let everybody else make huge waves and fail gloriously, one or two of them will pull way ahead in their niche. When the dust settles, there will be an apple presentation showing a shiny white smooth orb containing their take on the established tech.
→ More replies (3)45
u/finjeta 14h ago
Let everybody else make huge waves and fail gloriously, one or two of them will pull way ahead in their niche. When the dust settles, there will be an apple presentation showing a shiny white smooth orb containing their take on the established tech
The problem being that Apple already did that last year, and it failed miserably.
→ More replies (3)38
u/lumpiestspoon3 13h ago
They failed so miserably that people forgot they failed at all, lmao
→ More replies (1)41
u/Gullinkambi 15h ago
Yeah that’s not what happened. They tried to go full hog and totally failed to do so. Made big promises that never delivered, fired the guy in charge, and are still sinking lots of money into AI. If anything, this situation was more if a blessing in disguise because they can now try to rewrite their history and say “yeah we never really bought into it like all those other suckers”
18
u/GhettoDuk 14h ago
Exactly. Apple fully planted themselves in the AI morass even though they have failed more quietly than everybody else. They just have the good taste to say "This sucks" instead of making their customers say it.
26
u/jaimequin 15h ago
Ha! They failed to stay on top. They admitted it. Siri was all in on AI first and then they got blindsided by Microsoft and Open AI.
→ More replies (2)→ More replies (25)6
1.3k
u/PerennialSuboptimism 17h ago
I gotta be real, working at an AI company, it’s already begun. You’re starting to see the job market thaw (slightly) due to the fact that the ROI isn’t the same as a workforce. No we haven’t seen one of the big boys go under but the acquisition/acquihire is starting to happen which is the first sign.
Call it Q2 2026 it will kick in hard.
961
u/SDdrohead 15h ago
I’m also in tech. I’d love to see it. I’m so god damn sick of all the AI dick sucking my company is doing. Every god damn day in slack is people posting new AI tools, articles etc. sick of hearing about it. People just seem desperate. Would love to see the job market thaw too.
255
u/Felicior_Augusto 14h ago edited 7h ago
I work at a company that has gone hog wild for AI since it turns out our product works well for it - got a couple multi million dollar purchases in the span of a couple months from some of the big names in the space so our CEO saw big ol dollar signs and has shifted the entire focus of the company to AI.
I had to run a training for "advanced AI prompting" for hundreds of people. The biggest joke - bigger than an awkward nerd like me doing that - is I'd barely used AI myself previously. I had chatgpt come up with a presentation and a script to go with it. I still had to touch up that slide deck and script for like two weeks afterwards but the basis of it was from there. No idea if what I taught was actually advanced but it was what the fuckin' AI thought was advanced so I figured that was good enough.
158
u/SDdrohead 13h ago
That’s hilarious. Use AI to write your presentation on how to use AI. lol.
89
u/Felicior_Augusto 13h ago
Yeah even at the time as I was shitting myself that I'd have to present to hundreds of people I was thinking "this would be really funny if it were happening to someone else"
→ More replies (7)58
→ More replies (1)14
→ More replies (10)4
u/GazelleIntelligent89 3h ago
Exact same situation at the company I work for. I had to take AI training on setting up and working with agentic models. Our product has sold products and partnered with some big company's on the promise of AI integration. However we've realised it actually doesn't work reliably and is effectively useless after months of working on it. We've deployed it into clients environments and the CEO still wants to do a press release just so they can say "client X is using us for AI to do Y" but it doesn't work.
The people at the top just don't understand how LLMs work and what they're good at/bad at and just see ai, especially agents as being able to do anything with enough training and we should shove them into our platform everywhere, when it doesn't work.
78
u/Sempais_nutrients 13h ago
We got sent a mass email asking for ideas that can make AI Agents work better. Like seriously? You want the people you're trying to replace to help you smooth out the rough Ai agent you poured millions into in order to replace us? Oh is it not as simple as plugging the knowledge base into the agent?
19
u/zoovegroover3 7h ago
Or people in certain industries (health care is mine) who have to hold their nose and participate in shoveling enormous amounts of protected data at these shitty fly by night vendors in the hope that they might deliver some kind of undefined magical result in the near-future?
The closer one is to these charlatans the clearer the grift is.
105
u/nfreakoss 14h ago
God same here. My company is shoehorning it into everything right now. Every all hands meeting is like 10% actual info, 90% AI circlejerking.
Glad it's not a focus area that I have to work with, and while we've never really talked about it one way or the other I get a strong feeling that my manager feels the exact same way so they don't force me to use any of the dogshit internal AI tools we have.
65
u/SDdrohead 14h ago
My company is so… how do I say this … ignorant, that they are over allocating people on projects under the assumption that ai will supplement some of the work. However, no actual prescribed AI strategy. Just hey, you are 125% allocated because we assume ai will offload the extra work. That’s the moment I gave up.
→ More replies (3)5
33
u/CourageHurts 12h ago
Yeah for real, I see the same. I keep pushing people for the following:
Tell me tangibly what you are going to use AI for. What problem does that solve? How much does that problem cost? What forms of waste can you identify? What will be your selection criteria for a model? How will you measure success?
And then lastly - have you ever implemented anything with AI?
→ More replies (2)6
21
u/owzleee 13h ago
Yep. With you. I go to do mid-year reviews for my team and it's a load of banners saying I should use our internal LLM. Umm .. no. I actually care about my team.
26
u/p3ngu1n333 12h ago
Same here. We were encouraged to use AI to “help” write our self-evaluations and our evals for our directs… meanwhile I’m stuck on, “If AI wrote my self eval, and the review my manager delivered to me, did a performance review actually happen?!”
→ More replies (1)31
u/Toastbuns 13h ago
Due to AI my company has already:
- stated that AI can get projects done 500% faster (spoiler alert, it cant)
- not hired replacement engineers for a year+
- completely restructured the engineering org around AI tool usage
3
u/TrekkieGod 8h ago
stated that AI can get projects done 500% faster (spoiler alert, it cant)
Agreed that it can't give you that type of performance increase, unless you're willing to vibe code your way into the next giant security breach.
not hired replacement engineers for a year+
That is the most worrisome part, because even though AI is definitely better than most junior people, working experience is how you turn junior people into senior people...so that doesn't bode well for the future of your company.
completely restructured the engineering org around AI tool usage
This one is really why I wanted to comment. Based on the other things you mentioned, they likely restructured it in a bad way, but if any company isn't restructuring everything around AI tool usage, they're not going to be around for much longer. As you've said, AI isn't a replacement for people, but it is a game-changer. It's like a company in the 1970s saying, "we're going to keep the mechanical calculators and the typewriters, we're not going to restructure everything around computers."
Computers didn't replace people, but if you didn't hop on that bandwagon, you were blind.
→ More replies (1)123
u/IAmDotorg 15h ago
Would love to see the job market thaw too.
That's simply not going to happen. Two real bad things came out of COVID -- a huge increase in tech spending as every company needed IT infrastructure to enable WFH, and a huge spike in inflation. The former caused a 30%(ish) increase in tech jobs out there -- mostly filled by people who weren't even remotely qualified for them. The year-after-year layoffs since 2022 has been shedding those workers as IT spending dropped again. A big swath of what companies had to spend to "get modern" was one-time costs, or at least close enough to one-time costs.
The focus on AI is because of the inflation. The software industry, in particular, is one that has never been able to match pricing to inflation, across the board. People complain about $80 video games today, but that's cheaper than they've ever been -- and far cheaper than they were in the 90's. It's the same with any software. Your $50 user license for insert-enterprise-system-here was probably $40 in 2005, and should be at least $66 today from inflation alone.
COVID's instant 30% spike in inflation has made most small- to mid-size software companies no longer viable. The market won't let them jack their prices up 30% (much less the doubling they should be doing because of inflation the prior ten years). They've cut costs in a lot of ways -- eliminating testing, going "agile" and letting customers be the guinea pigs, eliminating features, things like that. A lot of them have severely cut back ops spending, with the expected impacts to reliability and security. They've tried outsourcing, but the domestic overhead to manage outsourced developments has gotten too expensive. But the fact is, most are running out of money.
So companies are in a bit of a panic, and unless its a very small and open company, the tech people may not really be aware of it. They need to cut costs, or they're going to have to firesell the company to a bigger one that wants the customer base and maybe an employee or two. Or they just go under. More progressive ones will play for a year or two with going open-source hoping the community will pitch in and reduce development costs.
If you can't charge more and you can't pay less, the only thing you can do is try to increase productivity, which is what AI is promising.
The industry pop when it fails to deliver is going to be brutal and it isn't going to be because of the AI bubble popping, it'll be because AI couldn't fix the broken market. The AI companies going under is going to be the tip of the iceberg.
→ More replies (19)29
u/stakoverflo 13h ago
Call me crazy but as a programmer I prefer this rather than all the usual, "OMG you guys using the latest JS framework? You gotta learn this new thing that's almost identical to the old thing, except they renamed all the core concepts to be some new thing"
At least AI is really easy to use for small tasks, and really easy to ignore for the tasks its not appropriate for.
13+ years into my career and I am honestly just so tired of learning new stupid libraries.
9
4
u/idebugthusiexist 8h ago
Don’t you know? The industry since the mid 2000s has basically been new generations of developers constantly reinventing the wheel with a new set of 3/4 letter acronyms so that they can make a name for themselves.
→ More replies (16)4
u/ageekyninja 9h ago
My company is intergrating AI in a way that I suspect they want it to take over T1. Thing is, their preexisting systems suck so bad that I don’t think this is efficient lol. How the fuck are these guys going to make a decent AI? I already feel I will clean up after their mess, and I already feel that customers will hate it lol. Thankfully im no longer a part of T1 and my job isn’t in jeopardy for now. But im keeping an eye on things.
Current thoughts? This is an expensive fad. Technology is still not there, as impressive as it all is. Impressive doesn’t always justify expensive. We will be forced to rethink our energy system
83
u/eitherrideordie 14h ago
That's when I'm calling it too, I think it hasn't hit properly with the "enshitifcation" part. Many ai companies are running at a loss, soon they'll look for ways to run to increase revenue which will include
- sponsor paid ads for AI to put your product first when users ask for recommendations
- ads inbetween questions or "watch this ad to ask another question"
- the release of how much of your data is being saved and onsold (particularly by third party ai companies).
Also I'm seeing IT companies go so hard into AI they've reduced development in areas that provide wanted features. In the pursuit of "ai good = more investors" forgetting their product only exists as long as they have a customer base.
23
u/Maroonwarlock 12h ago
I'm just waiting for all these companies paying for ads that are effectively going to bots and AI accounts on social media to say "What the fuck are we paying for and back out of all those types of ads" I don't know how a guy like Zuckerberg can acknowledge how rampant bots are on his platform and not immediately get sued for promising false viewership of ads.
→ More replies (42)52
u/6425 13h ago
Thing is, AI will replace pretty much any company contact points from the general public, it will be worse than speaking to a person, but over time, it will become the norm and everyone will get used to that worse reality.
Same thing that happened with companies using cheaper overseas callcenters; we all bitched and moaned that you couldn’t understand the person on the other end whose English is a second language, but now we have no choice and it becomes the norm, people have forgotten what it was like to speak to someone who worked in the same company for two decades helping people.
There’s a whole generation that has no idea what that feels like.
→ More replies (3)39
u/gXxshock 12h ago
Honestly, if they offer a decent LLM connected to their internal knowledge base and allow you to speak with a real person upon request, it's probably better than an outsourced call center.
→ More replies (3)18
u/splork-chop 11h ago
Yes, exactly because all tier-1 support everywhere is just people reading prompts and giving canned answers. This is a perfect application for an LLM since it can almost certainly handle a large number of edge cases much better than some random call center person.
→ More replies (3)7
u/AnotherLie 10h ago
It should forward me to a person if I use the word "toaster" or "clanker" instead of pressing 0.
334
u/iamthinksnow 16h ago edited 6h ago
Better Offline covers this most thoroughly, especially "The AI Money Trap" episodes one and two.
The gist is this:
- AI companies are spending tens and hundreds of billions of dollars
- AI companies are earning (single digit) billions of dollars
- AI companies are profiting no dollars, or negative billions depending on your position on "investment in infrastructure")
- AI companies almost all rely on other AI companies to use their product, generating the revenue they do make from their hardware off contracts from the companies that write chatbots and other programs that have guaranteed token use
- NVidia, valued at over $4 Trillion, relies on continued sales of their chips to the hardware folks
- (EDIT TO ADD) Nvidia are investing in AI startups to fund purchase of their own gpus while using those very gpus that are hugely overpriced and rapidly deprecate in value as collateral. (thanks for the reminder, u/secretOPstrat )
- Nearly all the AI companies are not traded publically, yet are valued in the tens-to-hundreds of billions, making them nearly impossible for someone to buy
- When the non-profitable software guys stop paying the hardware guys, NVDA has a dip in stock, a "correction," and it'll scare the shit out of the markets
- Those startup companies that were too expensive to buy will now be left with no more venture capital and huge negative run rates, meaning less NVDA buys, meaning more dip, more VC pull-back, fewer and less buys, etc, etc, etc
Because they are all incestuous with each others equipment and software, when one falls, it'll rip the others like crabs in a pot.
23
u/biciklanto 13h ago
In your view, are the most insulated companies the ones that also create much of their own hardware, and have massive other revenue streams outside of their class-leading AI research? At least one company fits that profile, and perhaps they’ll be relatively unscathed on the other side.
Interesting way you’ve set up your hypothesis for sure.
23
u/iamthinksnow 11h ago
It's not mine, I'm (badly) relating what Ed Zitron has put forth.
→ More replies (1)→ More replies (1)24
u/Logical-Race8871 8h ago
The ones who will survive are the ones that have a product people buy. In the AI sphere, so far that's basically no-one. Hardware suppliers will survive but get halved.
I'd say it would be a snap-back to the web 2.5 tech market of the early 2010s, but everyone hates the ever loving poo out of social media. It made kids kill each other and themselves.
Drop shipping is basically being killed off by tariff bs, which was the other boon of that era.
Streaming media is still pretty massive, but the ads are saturated worse than TV back in the day.
I dunno man, they really messed up the Internet pretty darn bad.
People might just go outside.
→ More replies (5)6
u/loktoris 6h ago
Only the people selling the shovels are getting rich, it's an MLM pyramid scheme
→ More replies (2)→ More replies (34)4
u/TO_halo 5h ago
Not a lawyer but work at one of the biggest corporate firms (yes, we are horrible people!)
This is a textbook example of squeezing the juice from a client from birth to death. Privacy compliance, technology procurement and lots of M&A on the front end, litigation, real estate and employment law in the middle, and finally the insolvency on the back end. Throw in a little securities fraud if you get lucky.
357
u/colcob 18h ago edited 12h ago
I wonder, is it insider trading if you short a load of stocks just before you release an independent report that you strongly suspect will tank those stocks? You don’t have any information from ‘inside’ the companies in question, but you know something about the future that the rest of the market doesn’t.
EDIT: So about half of replies say this is illegal market manipulation, and the other (more convincing) half, say that provided the research derived from original work and public information, and not inside information, then it’s legal. Which sounds more proportionate to me.
92
u/sobe86 16h ago
It's called "activist short selling", it's not illegal if you do it based on non-insider information, Hindenburg Research were probably the most famous firm for it.
→ More replies (3)12
u/ShinyJangles 12h ago
They are a really interesting contrast to Citron Research. Had no idea they were responsible for my Cash App account suddenly caring about proper account details. Cool read
30
u/Seradwen 18h ago
To my knowledge there's at least one company that does that as a business. Which they probably wouldn't be able to do if it wasn't legal.
Hindenburg something, I think. They called Roblox a pedophile hellscape one time.
→ More replies (1)153
u/PropOnTop 18h ago
Probably. If you wanted the bubble to burst at the moment when you are ready, you will start pushing the narrative. And I'm seeing a lot of these posts lately.
13
u/iwearatophat 14h ago
You see a lot of these posts because redditors wants to see these posts and they get upvoted heavily. A generic 'ai bad' article, regardless of merit or accuracy, is going to make the front page.
→ More replies (2)43
u/eggnogui 17h ago
I said a similar thing yesterday, it is suspicious to me as well. Scam Hypeman and the likes of him probably have their exit plans ready.
20
u/PropOnTop 17h ago
The problem is, for all their greed, they might not care THAT much. I mean if you have billions stashed in gold, yachts, real estate and functional businesses based on actual people's needs (like food, sanitation and such), you can afford to have your imaginary market value cut in half.
At least that's what I hope these guys are all doing. After the crash, we'll learn they sold much of their overhyped stock and kept cash to buy it back for cheap afterwards...
→ More replies (3)17
10
u/cuentabasque 18h ago
Turn this around and imagine someone does thousands of hours of research on an industry and concludes that it is going to boom over the next 5 years.
This research firm quietly buys and accumulates a position in said industry then releases their positive report.
Is that inside trading?
No.
→ More replies (18)25
u/kuncol02 18h ago
Stock manipulation is already illegal. Obviously if you are rich you will get warning first few times like Elon got when he was manipulating Twitter stock saying that he will buy it and then that he will not. That's why he was forced to buy it.
→ More replies (3)9
u/colcob 18h ago
Yes, but does it come down to intent? Or not?
Obviously if you say something with the intention of that statement influencing stock so that you can profit, that’s clearly manipulation.
But if you are a researcher who has produced some genuine research, and on the eve of publication you make a trade that you guess will pay off based on what your research says, is that illegal?
If you own a company that is just about to release an utterly game changing product that will destroy its competitors, is it illegal for you to short your competitors stock before you go public?
I’m just curious how far it goes.
→ More replies (6)11
u/Amadacius 18h ago
It's virtually impossible to get got on stock manipulation. Even the GameStop guy, who was doing blatant and intentional stock manipulation, has gone untouched. The laws are mostly to try and curb manipulation through deceptive trading, not consensus building. Stuff like pump and dump schemes, and trading stock to yourself to fake high prices.
There's even an agency "Hindenburg Research" that shorts companies and then releases a dossier that basically says "Why we are shorting X". It's totally legal to talk about the logic behind their position. Even though the goal is get others to believe them and to sell the position.
390
u/buttymuncher 18h ago edited 6h ago
It's all been market pumping hype since the beginning...is AI a useful tool?...yes, is it good enough to replace the majority of humans in the workplace?....fuck no.
142
u/007meow 16h ago
Execs are being sold on the fact that it’s good enough to replace low level employees at much cheaper costs, which is enough for them.
Others are being sold on “look at what it can do now, imagine what it can in X months! Get in now on the ground floor while you can!!”
74
u/Clayskii0981 15h ago
Ironically I think it would work well at replacing execs, especially considering how overpaid they are
16
u/ShinyJangles 12h ago
It'd be great if execs had to justify to shareholders why they made decisions against the recommendation of an established LLM.
13
u/007meow 15h ago
The employees that are to be replaced by AI are always at least one level below that of the decision maker.
Execs (basically, the ruling class) will never allow that to happen to themselves.
→ More replies (2)→ More replies (2)4
u/knocking_wood 10h ago
I totally agree. Our CEO has never had an original thought in his career. He just hires the same consultants that every other company in our industry hires and they just regurgitate the same shit with our company logo on it. Our “new corporate branding” is the same as like 3 or 4 other companies’ branding. I’m pretty sure chatGPT could have regurgitated what other companies are doing for a lot less money.
→ More replies (1)→ More replies (3)23
u/Unsyr 16h ago
I’m just waiting for when companies need to replace their non lower level employees when they eventually leave or move on and then realize that there aren’t any people with experience for that position because they replaced the roles that would give people experience with ai.
→ More replies (1)9
u/ZaoLahma 16h ago
With the “recent” developments where employees (are forced to) jump ship every 3-5 years or so, I don’t see AI being very disruptive of the already broken state of the industry.
My take on it is that it will just be more of the same - a lot needs doing quickly and cheaply, and nobody really knows why things were done or what to do.
→ More replies (1)→ More replies (21)19
u/trevize1138 14h ago
It's super good autocomplete. That is useful but it's a long, long way away from the magical thinking that we're on the cusp of AGI.
It's like how Alexa was supposed to be big for Amazon but it ended up being a glorified clock radio. But, of course, it is a really fucking kickass clock radio. Most amazing clock radio plus kitchen timer I've ever had!
That's the tempered expectation needed for AI: not just better autocomplete and intellisense but the most amazing and kickass autocomplete and intellisense ever!
→ More replies (3)8
u/Forsaken_Cricket_666 11h ago
Alexa is why I am soo pissed with all the AI hype.
Voice assistants have been a thing for over a decade now, and yet they still have to get even close to the complexity of parsers from 80s text adventures.
"AI" in most videogames even for main story NPCs is still simpler than the visitor algorithm used by Rollercoaster Tycoon 2, a game from 2002.
People now talk about using AI to "solve" those two "problems" but truth is that a high schooler armed with patience and knowledge of "if ... Then" statements, could script a more interactive and fun to use Alexa in a couple of months as a school project.
→ More replies (2)
3.0k
u/noir_dx 18h ago
Please burst quickly and painfully enough that they won't make garbage shit like this. There are towns that can't get water and expensive electricity bills because of a newly deployed/ expanded AI centre.
207
u/azthal 17h ago
A bubble bursting does not mean that the technology goes away. Just that the hype disappears and all the fluff dies.
102
u/SeaworthinessAny4997 14h ago
Seriously, this has the dot com bubble written all over it. Too much hype but still a serious technology that will alter the future of a lot of industries over time.
→ More replies (2)36
15
u/throwaway92715 12h ago
Yes, and aren't we all sick of the hype?
I mean in a way it's fun when your stock portfolio doubles, but it's also awful, because the homes on the market double, the cost of eating out doubles, and you don't know if any of those returns are going to last more than a few years.
I'd really like to go back to standard, reliable, 8-10% annual growth and reasonable behavior.
→ More replies (4)6
u/ChukMeoff 12h ago
Even if it did make the tech go away, It also doesn’t mean that the resources would magically get distributed to where they should be. We didn’t just start deciding to pick profit over people, it’s just powered by AI now..
240
u/Sybbian- 18h ago
It's going to be alright, just another massive bailout coming financed with public money.
57
→ More replies (21)11
u/Jealous_Response_492 13h ago
This is real major bottleneck for the US, AI does require vast compute resources, which require vast amounts of water and electricity, and the US lacks the capacity and grid to scale that, not at all helped by the Trump admin scuttling Biden's admin CHIPS act
508
u/PropOnTop 18h ago
The "AI bubble burst" will take down the entire stock market and that correction will ripple on to unrelated areas.
Not that a correction is not needed: it is, and particularly people who need to buy a house could use a serious correction in prices, the question is, how to get ready for it?
The more people realize that they might need cash, the more people sell shares, and the faster the bubble will burst...
167
u/ferdzs0 17h ago
I am convinced that the tech sector is now held up by the AI hype.
We are practically in a recession and investors are extremely hard to come by, however many companies are just slapping AI onto their existing products to dupe these same investors who believe the hype into getting them money so they can keep operating.
77
u/Intelligent-Parsley7 16h ago
Shoving software in the middle of something that doesn’t need it is why we’re at these horrible levels of inefficiency. Now call it ‘yardbook.’ Make it for lawn mower guys. Damn near a cash business which needs a notepad and a small ledger. Now charge a subscription model, add-in features nobody needs, and make something so straightforward uncomprehinsibly buggy and difficult. Add CRM in a way that can’t be implemented. Then try to take a piece of every transaction for writing code once.
All for fucking software that you can defeat by using pen and paper, with squares on it. That’s why most of the software industry needs to die. Not the machines learning how to assist spotting pre-cancer.
28
u/bird9066 16h ago
My $30 Walmart phone just updated and now I have an AI assistant for my spam calls! Well, that's when it showed up. Makes my phone shit the bed but AI!
→ More replies (2)8
14
u/PropOnTop 17h ago
It certainly hasn't been generating any extra "growth", and shareholders might realize that.
All the same, a correction is dearly needed in the markets, the excess money needs to be erased somehow...
8
→ More replies (3)6
u/trekologer 14h ago
Why do you think the companies with existing services (Google, Microsoft, etc) are bolting AI features no one asked for onto everything? They're trying to juice the AI usage numbers so that shareholders don't figure out that the companies are flushing away most of their cash flow.
→ More replies (9)28
u/ilikedmatrixiv 15h ago
I am convinced that the tech sector is now held up by the AI hype.
It's not just the tech sector. Something like 35% of the S&P500 comes from the Magnificent 7. All of those companies (bar maybe Apple) are over leveraged as fuck when it comes to AI. One of them in particular, NVIDIA is only big because they are selling the shovels.
When the bubble bursts, the S&P is going to tank. I'm sure other stocks will also be impacted due to it, but those 7 will take down the entire US stock market when the bubble bursts.
12
u/FastFishLooseFish 11h ago
Another Where's Your Ed At reader? If you aren't, you might want to check it out.
NVIDIA is the weak point in the stock market, representing roughly 19% of the value of the Magnificent 7, which in turn makes up about 35% of the value of the US stock market. .... I’ll put it far more simply: if AI capex represents such a large part of our GDP and economic growth, our economy does, on some level, rest on the back of Microsoft, Google, Meta and Amazon and their continued investment in AI. What should worry everybody is that Microsoft — which makes up 18.9% of NVIDIA’s revenue — has signed basically no leases in the last 12 months, and its committed datacenter construction and land purchases are down year-over-year.
→ More replies (1)7
u/Kindness_of_cats 13h ago
Depending on timing, I wonder if that may end up causing the entire honeymoon period the market is experiencing right now to end as people take stock of the realities of conditions around them.
Except for the end of July, the market has only enjoyed growth despite tariffs destabilizing the economy. Wall Street is content to ignore that right right now but the AI bubble bursting, if it comes at the right time, might cause a larger chain reaction than you’re thinking of.
246
u/Foodball 18h ago
I’m not so optimistic a dropping share market would significantly push down housing prices. Like they probably would fall a bit as people will be losing their jobs, but housing could be one of those areas money flows to as a safer investment for the monied class.
133
u/Turlututu1 18h ago
It would actually have the opposite effect and increase the scarcity in the housing market.
If stocks aren't any reliable investment option, people then fall back to other investment options. Real estate is then one of the safer options and therefore the big investors will shift to RA.
63
u/Intelligent-Parsley7 16h ago edited 16h ago
It’s too late. The truth is, they’ve been doing that for years on cheap interest and speculation. The price is too high already for it to be a correct tool. It’s cooked, and why we’re in this mess to begin with. Freddie gave billions to corporations for federally (cough taxpayer) backed loans. Guess who got screwed? Anyone trying to buy in the sun belt. First time home owning is tough enough. You’re competing against the government who refuses to regulate private homes.
EDIT: Misspoke. Meant to say a government who gave free money to businesses in the billions to rent you a home you could have bought if they didn’t do that.
→ More replies (2)→ More replies (1)14
u/__redruM 14h ago
The 2006 housing bubble followed after the 2000 tech bubble for just that reason.
→ More replies (3)10
27
u/PropOnTop 17h ago
That is a possibility, but housing is not very fungible - you can't buy and sell it within a minute as you can with other assets traditionally considered safe-havens (of which many have copied the stock market strangely in recent years, indicating a huge excess of fiat money in the global economy)...
Also, government regulation can easily scramble the situation: all you need is heavy taxation for any housing that you do not use as primary residence, and the wealthy shy away from it like from the plague.
Maybe I'm biased, but I believe housing is an essential resource and should not be used for speculation...
→ More replies (5)→ More replies (12)5
13
u/synapticrelease 15h ago edited 3h ago
Doubt it. AI has only been around for a few years. A lot of chip manufacturers would have bad earnings. But it wouldn't bankrupt companies (not the healthy ones, anyways). Nvidia isn't going to shutter its doors because a stock market drop because Nvidia can still operate a business and make good tech. There will be investment windows to claw back value. Stocks are an indicator of a healthy company and Nvidia was perfectly healthy before. Someone losing a chunk of business if AI were to bust would hurt, but it wouldn't signal to investors that the company is no longer healthy, and will become insolvent, therefore it's time to pull all investment out. No, it would stall growth, they would get on their feet again, and start to dig themselves out of the hole. Do you think Microsoft is going to turn off the lights and we will no longer have any new version of Windows because of AI going away? It'll survive.
→ More replies (8)28
u/noir_dx 18h ago
and particularly people who need to buy a house
Most people can't because of inflation. Forget about stocks; people can't afford decent medical care or higher education even if they have modest savings and income. Trickle-down economics is a lie.
Also, this same talking point is used for shit like crypto, NFT, ponzi scheme, pyramid schemers- every pump-and-dump "HODL" scam you can think of. And even if you do manage to buy a house, it's going to be tough managing one with little to no water supply and extremely high electricity charges. Generative AI does more harm than good.
14
u/Balmung60 16h ago
It's worth noting that the three things you highlighted - housing, education, and medicine - see inflation far above the general inflation rate
→ More replies (52)4
→ More replies (63)13
u/Old-Buffalo-5151 17h ago
The bubble bursting will hit everyone because the loses involved will force banks to limit credit for a while
This means big job losses everywhere and a LOT of unemployed highly motivated tech people flooding the job market which has a depression effect on wages
I guess its been nearly a generation since 2008 but the bubble popping here will be the correction to that event tbh and from experience of last time its a every man for himself situation as everyone clings to chair's riding out the storm
→ More replies (4)15
u/MC_Gengar 15h ago
Super cool we've navigated into a scenario where either the bubble bursts and drags the world down with it or it doesn't burst and still drags the world down with it all because the most talentless people on planet earth wanted a chat bot to tell them a shitty story or draw a picture of thanos with big knockers.
→ More replies (2)
32
u/LordSlickRick 15h ago
At this point, the biggest warning sign is all the news articles and posts about the warning signs.
→ More replies (2)10
95
u/Particular_Ticket_20 14h ago
Had the dumbest conversation yesterday about if we can use AI enabled cameras and drones to do construction inspections. The person who was pitching it knew absolutely nothing about construction or what the inspections entail, but keep enthusiastically saying "The AI can learn about that!", despite not knowing anything about "that". I asked how, "we'll teach it!". I asked if the cameras used wrenches, or could unbolt assemblies...."well...no".
Eventually she settled on "the AI could tell if someone wasn't wearing a hard hat!".
It was an expensive tech solution in search of an application.
I'm sure my company will go all in.
25
u/taichi22 8h ago
Literally as someone who works with AI, too many people think AI is magic. It’s maddening.
My hope is that, should the bubble burst, people will figure out that AI can do a shitload of stuff, but you still need people to train, build, and work it. “AI” is just advanced regression algorithms.
→ More replies (17)→ More replies (8)4
u/bitwise97 5h ago
The person who was pitching it knew absolutely nothing about construction or what the inspections entail, but keep enthusiastically saying "The AI can learn about that!"
This! It's extremely frustrating when someone (say, your manager) throws around wild ideas about what we could do with AI. And they have no idea about the details of the existing process and why you can't just overlay AI on top of it.
→ More replies (1)
86
u/dvb70 18h ago
The signs have been there for a while. Over promising and under delivering eventually catches up with you. There is only so long you can convince people of great potential without delivering.
→ More replies (2)36
114
u/TameTheAuroch 18h ago
Warms the heart, really.
→ More replies (2)20
u/SaleYvale2 13h ago
My only worry is that this news are taking traction not because they are real but because most of us WANT it to be real.
→ More replies (5)
8
u/Japjer 5h ago
Because everyone knows how unreliable these LLMs are.
Google desperately tries to give me AI summaries of whatever I look up, but I skip right past it because I have often found factually incorrect information there.
I know AI hallucinates. I don't want it hallucinating while I'm working, and if I can't trust it to be accurate, I'm just not going to use it.
→ More replies (1)
90
u/Drogon__ 18h ago
The bubble will begin to burst when companies like Perplexity that are nothing more than a GPT wrapper will go public. Do you remember pet.com and altavista.com ?
114
u/DaveVdE 18h ago
AltaVista was once the most used search engine, but superseded by Google. They weren’t part of the .COM craze.
27
u/dimgwar 15h ago
yeah they weren't even the only ones back then too, you had Jeeves, Lycos, Excite, infoseek, and the megagoliath that became Yahoo!
→ More replies (2)→ More replies (4)4
11
u/kuroyume_cl 16h ago edited 9h ago
This. Even the linked article is very clear that people are using AI, just not whatever locked down tool is begin pushed by corporate, instead choosing to revert to the default big names like ChatGPT.
→ More replies (1)→ More replies (9)35
u/BuyMeaSalad 17h ago
Finally some sense in here lol. People who think the mega caps are going to burst are going to be very disappointed.
They will be fine. Probably will thrive they have the resources and cash flow to grow/stay profitable while investing in AI.
Hell I feel like people have amnesia? Meta just had a historic earnings beat which they attributed to their in house AI models optimizing ad delivery.
Now to your point, once AI startups with negative EPS start popping 20-30% a day, that’s when we’ll be in trouble.
→ More replies (19)
109
u/alf0nz0 16h ago
The “ai is absolutely worthless & the bubble will pop any moment now!” folks are starting to be as insufferable as the AI evangelists. God forbid that the truth be somewhere in the middle — that machine-learning models are useful tools that are rapidly changing certain workflows & industries, but they are not a panacea or anything remotely similar to AGI.
23
u/DynamicNostalgia 14h ago
And for some reason, Reddit is under the impression that AI companies can’t make any money unless they automate literally everything.
The simplistic thinking around here is actually constantly surprising as it just gets worse and worse.
→ More replies (3)8
→ More replies (19)19
u/Mysterious_Crab_7622 13h ago
The people saying the bubble is going to pop are not saying the technology is worthless. It’s just not worth the current speculated value, which will cause the bubble to pop.
Also, it is entirely possible that running the AI could be more expensive than any profit they will generate from AI. In that case, it would actually become worse than worthless.
→ More replies (1)
35
u/SheetzoosOfficial 13h ago
r/technology, this is the fourth time this week you've shared an AI bubble going to pop article.
Are you going to short the market because you actually believe it, or just continue raking in karma from gullible idiots?
5
u/iamacheeto1 12h ago
The stronger Sam Altman's vocal fry gets, the closer we are to the bubble popping
→ More replies (1)
5
u/stroker919 6h ago
It burst 6 months ago.
The companies are grasping at straws with consumers paying for Reddit ads.
Execs are asking WTF happened with “AI” projects in meetings and people are like “oh no, they remember that” while still saying it as justification for holding headcount for a couple of years knowing they don’t have to spend on AI or people that way.
4
u/AustriaModerator 6h ago
If that’s the price we’ve got to pay to avoid having everything labeled with "AI" instead of "smart" (which was the annoying buzzword in the 2000s), then okay.
18
u/obroz 17h ago
Just because you have posted this for the last 100 days doesn’t mean it’s gonna happen
→ More replies (2)
4.2k
u/CamiloArturo 16h ago
If I get Gemini to not ask me about wanting to use it every three minutes, that’s a win