AI is funded solely by sunk cost fallacy at this point. I wonder how long it will be before investments start getting pulled back because of a lack of ROI. I can already feel the sentiment towards AI and it getting pushed in everything turning negative amongst consumers recently.
I wouldn’t have a problem if they were actually investing the money in something useful like R&D
Nearly all the investment is in data centers. Their approach for the past 2 years seems to be just throwing more hardware at existing approaches, which is a really great way to burn an absurd amount of money for little to nothing in return
It’s very corporate, isn’t it? “Just keep scaling what we have.”
That being said, a lot of innovation is happening, but goes unused. It’s incredible how my promising papers come out, and get completely passed over by Big Tech AI, like nothing matters unless it’s developed in house.
The Chinese firms are picking up some research in bigger models, at least, but are kinda falling into local maxima too.
One of our biggest bookstores contracted with a local artist for some merch. That artist used AI with predictable results. Now everyone involved is getting raked over the coals for it.
No surprise, they just announced a 4th round of layoffs too. 😟
https://www.koin.com/news/portland/powells-layoffs-employees-10292025/
Why do you think AI is pushed so hard?
Everyone is aware this has to be useful. Too much money.
Still the powers that be will do everything to avoid a hard crash, which would be so much earned.
is this $11,500,000,000 in real money or speculative money?
Yes, lol.
There is no difference anymore
You think it’s 11.5B worth of gold bars?
Maybe, just maybe, the bubble started bursting now.
Would be nice, I want to buy some ETFs at a discount
So they “lost” $11.5B? Cool, I lost 20 bucks last week and still had to explain it to my accountant 🤭 Feels like the entire AI industry is built on “don’t worry, growth will save us”, but at some point someone has to pay the electricity bill…
No, you don’t understand. Lose money on every sale, but make up for it in volume!
If you lose enough money, you trigger an integer overflow and end up with a profit!
I look forward to the AI bubble bursting, and billionaires looking shocked, ‘because there were no signs’
They won’t lose any money…
In contrast to the housing bubble, where a lot of the value was in overpriced houses sold to individuals, this overpricing is almost entirely in tech stocks, and tech stocks are almost entirely owned by by the wealthiest 10%, even 1%. The tech billionaires have limited ability to divest themselves of their own overpriced companies and absolutely will lose money.
None of them are going bankrupt, they’ll all be just fine when the market recovers in a few years, because that’s the nature of capitalism. A bunch of peons, who convinced themselves that the bubble-value of their 401k meant it was safe to retire, will suffer, will have to go back to work - if you’re not an oligarch, losing money is painful.
In contrast to the housing bubble, where a lot of the value was in overpriced houses sold to individuals,
was?
34% of single-family housing are now rented out. We’re not building enough housing, a fact that hasn’t changed since the housing bubble collapsed. So, a lack of investment in new property, large funds putting money into existing properties instead, and less risky homeowners overall means we don’t really have a housing bubble. We have a supply shortage, leading to high prices. The correction for that isn’t a crash.
since the housing bubble collapsed
did it? it does not seem so. where I live to buy a house in good condition people need to take out loans that the bank may not even allow, but if it does they’ll pay it for decades. even empty plots are still very expensive. more and more people live in a rented place even though they don’t want to move, because their house is taken away.
Yeah all the people praying for a crash are praying for nobody to have retirement funds.
You can easily tell who’s actually employed in this thread because anyone with a 401k is going to get dicked down while the 0.1% get a bailout.
They will be fine either way…
A lot of them are actively talking about how it could be a bubble and the implications. No one is going to be surprised. Billionaires are just really hoping they can make it work before the bubble pops
Yeah… I mean billionaires have at least as much information as a random person on Lemmy :D
Wow. Glad they just converted to a for profit entity! Can’t wait for them to unleash all this success on to the the general financial market.
The whole “AI” thing is one big grift.
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This reminds me of something that came up recently. Copilot started hallicinating quite a bit more than usual in Copilot reviews. That made me think about the cost of operarion. As they burn money like this, I won’t be surprised if they start decreasing inference quality to decrease cost per user. Which also means people relying on certain model behaviour for tasks could get nasty surprises. Especially within automation workflows where model outputs aren’t being reviewed.
Copilot and Gemini are trash. They are driving away future business.
Github Copilot is somewhat useful for programming (or it feels useful when it cranks out some boring and routine code to my specs - not sure it actually saves me time though because I always review it all), but of course Microsoft have given a range of products all the same name for maximum confusion, as they do. The Copilot in Windows may be rubbish for all I know. I haven’t ever felt the need to press the button.
Anyone using something with inconsistent output in their automation deserves what they get.
Who wants to give me a billion dollars to dig a hole and I’ll give you a billion to fill it back in and we’ll both say to investors we posted a billion dollars in revenue.
Finally, some good news.
Oh no!
Anyway…
Microsoft also lowered stake in OpenAI from 32.5% to 27%
https://blogs.microsoft.com/blog/2025/10/28/the-next-chapter-of-the-microsoft-openai-partnership/the smaller the share, the smaller the quarterly losses. Other sources have included that MSFT now gets a 20% royalty on openAI revenue, but its not in that PR. It’s not clear why else MSFT share would have fallen.
apparently the bubble might not be as extreme as some people think because the major AI players are all being propped up by companies that actually produce revenues and profits
Like Nividia which… Oh all based on AI revenue.
And even though NVIDIA is better place as they do produce something, but the something in play has little value out of the AI bubble.
NVIDIA could be left holding the bag on a super increased capacity to produce something that nobody wants anymore (or at least nowhere near at the levels we have now) so they are still very much exposed.
I want cheap GPUs at home please!
me too, but the GPU used for AI are not the same as what we would use at home.
maybe the factories can produce both kinds and they would be cheaper, but it is speculation at this point
It’s literally the same chip designers, production facilities and software. Every product using <5nm silicon fabs compete for the same manufacturing capabilities (fab time at TSMC in Taiwan) and all Nvidia GPUs share lots of commonalities in their software stack.
The silicon fab producing the latest Blackwell AI chips is the same fab producing the latest consumer silicon for both AMD, Apple, Intel and Nvidia. (Let’s ignore the fabs making memory for now.) Internally at Nvidia, I assume they have shuffled lots and lots of internal resources over from the consumer oriented parts of the company to the B2B oriented parts, severely reducing consumer focus.
And then we have any intentional price inflation and market segmentation. Cheap consumer GPUs that are a bit too efficient at LLM inference will compete with Nvidias DC offerings. The amount of consumer grade silicon used for AI inference is already staggering, and Nvidia is actively holding back that market segment.
They’re the ones selling shovels in this gold rush, though.
The problem is that the companies that actually produce revenues and profits are also in turn being propped up by AI.
such as?
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What? there was no such thing a “bubble” around the Metaverse… (at least not the economic slang term “bubble”)
From the first video of the Zuck presenting the idea, everyone just laugh it off… Meta did waste tons of money on it but they had the money to burn so there was no bubble at all in play here
If I am rich and stupid, I may think a pool in the roof of my house is a great idea. I can spend the value of the house having it built and then have the house collapse on me. Since I am rich, I can just buy another house or pay to rebuild it and that’s the end… no bubble.
However, if I am pitching plans for pools on roofs… and millions of people buy into it, many of whom can barely afford my terrible plans, when the houses start collapsing, too many people will be left with no house or means to procure another one… that’s a bubble
lol, what? “Bubble” doesn’t just mean something is expensive
And that is probably only the beginning.
AI crash will be 11X bigger than subprime mortgage crash, also driven by mass stupidity.
The next movie will be titled: * The Big Shart*
This guys is jacked…jacked to the tits.
You too will soon be able to buy an abandoned datacenter for just $1,000.
Think of the gaming GPUs!
The GPUs are basically proprietary to the severs which are near proprietary to their racks/setups. I spent a few months on a contract quality testing new Nvidia graphics severs being assembled by a a Taiwanese company here in the states. From the liquid cooling built into the $2-4 million dollar rack to the proprietary network/data cables to transfer the information at the speeds they do, most people would have no way to use them.
Don’t worry. An XBOX will cost 1400$ soon to help make up for it.
Also, with mandatory AI Gamer Buddy™ so everyone will buy one themselves instead of going over to your friend’s house to play
Tired of waiting for your friends to get off work? Don’t bother, with your new AI Buddy you will always have someone imaginary to play with.
As a bonus, you can share all your secrets with AI Buddy. AI Buddy will anticipate your needs, desires, and will always be there for you. AI Buddy will never get mad and will always say you’re the best.
You will quickly wonder why you ever hung out with your friends after AI Buddy shows you what they say behind your back. AI Buddy is the only friend you will ever need.
*Microsoft is not responsible for AI Buddy actions including but not limited to plotting your death, impersonating you to drive your friends away, and selling your deepest darkest desires to advertisers.
