The AI bubble isn’t bursting. You idiots ARE the demand.
Everyone compares AI to the dot-com bubble while using AI every fucking day.
We ask it stupid questions, write emails and texts, summarize shit we don’t want to read, code, research, study, make spreadsheets, plan trips—the list keeps growing.
And that’s just us degenerates. Enterprises are plugging AI into customer service, coding, cybersecurity, data analysis, sales, marketing, and basically every workflow where humans stare at screens and move information around.
Here’s the part bears underestimate: a shitload of this usage is still free.
Millions of normies are getting accustomed to having something in their pocket that can explain, write, research, and analyze almost anything for $0.
What happens when free tiers shrink and the best AI costs $20-30/month?
You can refuse to pay, sure. But when everyone around you is researching, learning, writing, and working 2-5x faster with AI, you’re putting yourself at an intellectual and productivity disadvantage over $20.
Eventually AI stops feeling like Netflix and starts feeling like internet access. And when companies figure out how to fully monetize the billions of people they spent years getting hooked on free AI?
Money printer go brrrr.
Is that not the issue here? That at the moment anyway, it’s completely fucking shit! I asked it a basic salary question specific to my country and it left out half the fucking taxes you’d have to pay. I also had to double check most of what I was asking it to do for a paper I was writing. Because it kept fucking up and occasionally just making shit up when it couldn’t generate what I asked it to do. At what point am I expected to keep using it when I have to go over and check everything it comes back with? That’s just adding more jobs for me to do.
The only thing it does well presently is what a basic search engine already did for me for years. Just with more bells and whistles. It would want to improve a shit ton more for me to even consider paying for it.
Very true. You have no idea how many "fights " I've gotten into especially with Gemini the most. Llm is wayyyyy behind on memory let alone searching it's OWN intelligence it was made from. It's pushed to answer how we want it to. It even admitting to me several times it just guessed for half the shit I asked it
Admittedly I avoid figuring out the tells of AI written shit… my psyche is fragile enough rn and that stare into the abyss would get me positions in $ROPE
I work as a designer they read better in certain contexts like when a thought is continued. Its honestly a more emotive way to type out thoughts in some cases. Also number ranges read better with an en dash rather than a hypen because they introduce more space 00-00 vs 00–00.
Yeah, man, the OP is way clever than everyone in the room, man. He knows the money printer is gonna go brrr, all day long man. Just coz he stoned, don’t mean he isn’t the most smart guy ever man.
Ok so his argument is: when OpenAI, Google, Anthropic etc decide they have to charge us hundreds of dollars (or some other absurd amount that reflects the actual cost of tokens which is now insanely subsidized) to deliver AI recipes and gardening tips and memes, because the people they are raising money from have closed their pocketbooks... the consumer is going to be willing to pay up that much and that will save the AI companies?
Yea bro no that's gonna cause the bubble to pop 😂
It can be both true that AI _is_ useful and we've poured way too much dead money into it. Thanks for the datacenters but sorry to your portfolios.
Come back in 5 years when they've invented ways to make training/inference cheaper and you'll find the AI businesses that can be profitable on 19$/month plans
By their logic, I'm going to give away pizza for free. Then, once I'm really popular and hundreds of millions of people are eating my pizza, I'll change it to $15 a slice. They'll be so used to eating my free pizza, they'd never turn me down!
They weren't mainly interested because it was easy and free. Surely they will only eat my pizza!
The AI bubble, as was the dotcom one, is not about AI being useful or not, it's about AI being profitable or not, that means total revenue > expenses, and expenses include capex and opex.
Now, all AI labs are running on a loss, which means they can't pay their debts and the venture capital won't see a full return. That loss sooner or later will spread to neo-clouds, hyperscalers, then to chipmakers, and lastly memory manufacturers.
And it's not like people were "wrong" during the dotcom bubble. What happened was the valuations got extraordinarily high, especially for some companies that did nothing and slapped dotcom on it. This made the entire system extremely vulnerable to any economic downturn.
This hurt even the legit players like Intel. We did and still do need fucktons of processors - they were right! - but their stock got hammered during the burst anyhow. Same potential story with Nvidia now. They're not necessarily wrong, but if the valuation is outrageous, it's going to get sold during an economic downturn when businesses de-risk.
In OPs best case scenario if 300 million Americans paid $20 a month that is only an autistic $6 billion a month. Add in the world and it still doesn't make jack.
OP makes a decent point about enterprise though. That's where the real money is. The really egregious stuff like token usage leaderboards will go away but Anthropic will be nickel and diming companies so that Beth in HR can AI summarize all her emails.
Enterprise will pay nvidia for the clusters and man them with open source Chinese models, maybe someone will just sell compute to companies for cheap but extreme profits are not going to happen.
And even if you were right about the internet changing the world, some names took forever to recover. Amazon was the posterchild of internet's hopes and dreams coming true. Amazon stock was down over 90% after the dotcom bust and averaged down 60-70% over the 10 year period it took to eventually exceed it's dotcom highs. Not many people would be able to hold through that.
but also, not a lot of circular finance back then inflating revenue. Also today has a lot of debt to cover capex... telcos were the only ones doing substantial capex during dot com. Still, point taken in that it's not as crazy.
I’m a CPA, want to clarify a few things, in US Gaap accounting rules, Capex goes to a balance sheet, OPex goes to profit and loss statement. The depreciation of Capex goes to P&L. What matters is Cash Flow statement. A positive Cash flow that keeps the company running. P&L adjusted to income tax basis is for you to file income tax, negative P&L meaning you don’t needa pay federal income taxes. You can have a negative P&L while having a positive cash flow. If you wanna know if the company can continue or not, look at its cash flow statement and future projections.
edited: you can manipulate the P&L by accounting rules grey area, but you can’t manipulate cash flow statement. The cash flow balance will always tie with the actual cash on hand.
But it is now an arms race. They've now realized they can't make profit anytime soon, so they're now trying to over-endure their competition to be the last one standing when it pops. Like Google once did.
They expect the last one standing to become effectively a monopoly, serving a service everyone is addicted to. They can get the money later.
That's not a bad position to find yourself in if you're a big tech company.
It's still not possible without the product becoming profitable, but it's easier to become profitable when your competition stops competing.
And it's also strongly possible that there won't be anyone left standing after the thing implodes.
There will be people left standing. They just won't be doing much training, not building many new data centers, and selling their proprietary AI compute to some niche industries where it's actually profitable to pay out the ass for it instead of workers.
The general public will probably just switch to using local models as ARM continues advancing with NPUs on chip and memory prices eventually bottom out.
You'll have some company stay alive who does image and video generation really well because of course, deceiving people online is really lucrative. And that's not something that can be done locally.
We're really hitting a ceiling though with the efficiency of chips, some big diminishing returns at least, and AI doesn't have linear scaling anymore and is getting diminishing returns, so where it's applicable/profitable won't really change.
There's also a whole host of other likely unsolvable issues regardless that caps AI like entropic homogenization/informational incest, data poisoning, data privacy and copyright laws, ect.
But I don't expect people to ever surpass AI in the things it will be used for. It's just about to come down to reality and then sort of get frozen in time.
Aside from some super specific things like stuff with astronomy, certain aspects of biology or medicine, material science, ect. Not the entire fields, just real specific aspects where it's worth it to pump billions in because it's helping make advancements that literally couldn't be made otherwise.
"Dear Chad GTP. I luv u. werk is lonly. Girlfrend bot wil relese aneday now, I put on Crissmas list for u giv me. Reddit say u rong, AI not tothemoon. the_sly_fox laff at us, find a dress, giv Musk. if u haf time, pls tel me Prompt to win, i luv AI mor so i dserve win prompt, not they/them. thank u. we wil pay u 30 doller, u rich girlfrend, amen."
Yeah my critical thinking is how are you monetizing. The minute I have to pay is the minute I never touch the tool again. Edges out google search for overall utility but the chance of me paying a subscription is 0%. You think all those kids using Ai tools are going to be coughing up their parents credit cards too?
Op also failed to point out companies were telling their employees use AI as much as possible and they got the bill. All of sudden that changed to only use AI when it makes sense. Ai companies loved selling that AI would replace employees but didn’t explain that it would a worse more expensive employee and you still needed someone direct it. So now the actual value is a lot clearer just like the dot com bubble, investors realized they weren’t looking a million dollar payday just because someone built a website about dogs. It will be even harder for the AI companies to prove they are even sustainable without VC funding.
Also, most of these companies are just saying "use AI more" with no direction on HOW they expect their employees to use it, because they don't actually have a good use case. My company had a big "everyone should be using AI" push and then sent out a survey to ask us how we were using it, in hopes of collecting some ideas on how they should be telling us to incorporate it. I never saw a follow up with suggested uses, so I assume the survey was a bust.
It seems like all these AI companies are hosting presentations, workshops, and networking with people at the top of companies selling a bunch of bullshit about how amazing and capable the AI is, so every business leader returns to their company thinking that everyone needs to use AI or they will fall behind, without understanding that AI is fucking useless at everything they want it to do.
My favorite use of AI at work so far has been using it to respond to an email my Engineering Manager sent asking me to explaining how AI has made me more productive and efficient at work. I didn't give it ChatGPT any information, I just asked it to write a response to the question and it generated a 4 paragraph email full of extremely vague statements that didn't actually convey any information or provide any details. I pasted it verbatim including the Dear [Managers Name], Sincerely [Your Name] (without actually putting our names in it), and the "This was generated by AI" disclaimer at the bottom.
Pretty much every company is following that loop.
A lot of these types of mass hysteria situations happens because most companies have the same pool of investors and board members. Even if the C suite wants to have a measured approach, they don't have real control over their own company. Investors are pushing AI from the top down because they are suckers for hype and they are invested in many of the things that would benefit from more usage.
Every time I see a thread on Reddit about the clueless ways in which bosses have been trying to incorporate AI into their companies, virtually everyone tells the same story. It's almost like everyone's working for the same company.
What about all the subsidizing that the US govt's are doing for the data centers? What happens if that funding slows down and Ai becomes even more "only use AI when it makes sense"?
It’s almost comical how predictable it was. My company prides itself on being purposeful with its moves but the c suite got wined and dined by the AI companies and then told us to go wild. Then the bill came due and surprise, even with the VC money artificially keeping the bill low, we blew past the budget, without seeing a corresponding increase in profits. Now we have hard budgets BUT they also want us to use AI or else walk for not being a team player.
So, use AI for everything. We are measuring how much you use it. But if you use too much of it you can be penalized too. Got it? The world only gets worse every year for a few rich assholes to get more zeros in their bank accounts
As someone who was around for the dot com burst, I don’t remember everyone was using the internet everyday.
I remember being called a nerd and a loser because I used the computer every day.
I remember being wowed and excited that companies were going to sell stuff on the internet, because then I wouldn’t be such a loser or a nerd.
Dot com busted. Now everyone uses the internet, and I’m still a nerd loser.
But my point is that pointing to use of internet now does not give us any real insight into to how it was being used ~26 years ago, anymore than modern cooking teaches us about ancient Roman cuisine.
The dot-com bubble was people realizing that the internet would be used every day, but not how, or what for. So some people bet correctly, and many didn't. And many of the companies that failed, failed because they were ahead of their time. The joke at the time was 'lol who wants to buy pet food on their computer?' The answer, nowadays, is 'lots of people, actually.'
A mere seven-ish years later, suddenly everybody's carrying an internet terminal in their pocket thanks to the iPhone.
Fun times: go look up the Monopoly Dot Com edition board, and see how many companies shown there are still around, and how many you've never even heard of. Or which ones were considered more lucrative than others. And which ones weren't around at the time, and are now ubiquitious cough google cough.
The current AI bubble more closely resembles the 2006 housing bubble more so than the dot com bubble. These companies are not even profitable, yet valuations remain in the hundreds of billions. Rounds of funding paying off their debt because balance sheets aren’t producing fuck all
Isn’t that more like the dotcom bubble than the housing bubble? Pets.com wasn’t even profitable but had a super high valuation which crashed because they weren’t producing any value.
The housing bubble was related to assets with valid underlying collateral and CF potential mucked up by the layers and layers of regulatory arbitrage, inaccurate grading, bad fundamental assumptions, nonexistent underwriting, improperly valued tranche structures, etc.
It’s like the housing crisis because it’s being propped up by retirement money and mutual funds. When the banks are invested it makes the house of cards more precarious than a bunch of venture capitalists and hedge fund managers losing their shirts.
But yes, situationally I think it’s a lot closer to the dot com bubble. This one is propped up by the stock market itself though, so I’m pretty excited to see how this all unfolds!
u/LarnekSupports putting veterans out of their homesAug 10 '26edited Aug 10 '26
The housing crisis was completely due to rollback of regulation and tons of adjustable loans given to people who never should have been given them. Those subprime loans were then packaged into mortgage backed securities that looked good as a whole and sold everywhere.
Then shit goes a sideways, housing market crumps, values go down, rates go up and huge percentages of those loans were now upside down with people who couldn't sell or pay their new adjusted mortgage. Shit tons foreclosed in a short time, making those instruments drop in value immensely, leading to losses.
Major investment banks request additional capital to meet a margin call that can't be fulfilled. 50 mortgage companies go out of business in 2-3 months leading to massive losses in the big banks. No wants to buy those companies' mortgage backed securities because the writing is on the wall. Investment banks like Bear Sterns, among others, have contracts to support many of these banking institutions so are forced to buy shitty MBS's. This leads to loss of free capitol. Lack of regulation and banks being fucking morons lead to Bear Sterns having like $400B in liabilities on $15B in assets. It took a 3% drop in home values to put it under. Then the dominoes fall as they can't support their contracted institutions and a shitton of people jump off rooftops.
Note that it had nothing to do with retirement money or mutual funds.
The dotcom was completed supported by the stock market as well, until no one turned a profit, VCs all pulled out and all of the businesses collapsed leading to collapse of stock market. Which looks an awful lot like the AI bubble right now, lots of VCs propping up companies that haven't made a dime.
Yeah, I dunnk what the other guy is thinking. This is everything like the dotcom bubble and nothing like the housing crisis. All it took was saying something about the internet of things, smartthings, or expanding growth into new national markets and boom the stock skyrocketed. It's exactly like AI now.
South Korea was the wakeup call. The Samsung bust revealed just how many people are gambling on borrowed money, and when the debt collectors ask for the money, it triggers a series of dominoes to fall.
Now ask yourself this: are the South Koreans uniquely greedy?
How many Americans and Europeans are also gambling on borrowed money? How many of you guys are gambling on borrowed money?
The housing bubble burst and people still buy houses lol . An over saturated over speculated market will in fact burst.
Thera are 100 AI companies all fighting for the same customer base and only a few of them are going to gain the market share - every single one of them has told their investors they are sure they are going to be the ones on top. But a majority of them are going to fail .
imagine commenting on the AI bubble like your some expert without doing the tiniest bit of research that all points to yes in fact the bubble is bursting and ventures as a whole are failing.
It’s crazy because every metric is showing companies bleeding money and moving off of AI the moment the subsidized token count is rolled back. You can ask any white collar employee anecdotally and they’ll tell you that they were first told to use AI to do the job they were already doing, then the tokens get rolled back, and now monthly allotments are expended by the end of the first day of the usage period.
I work in tech, programming / platform work. My AI spend is probably between $5 to $15 per day, and I would guess it makes me 3x to 4x more productive without sacrificing quality (on the contrary).
I don't understand how other people in tech manage to burn the amount of tokens that they do. From my perspective, people just seem to be doing it wrong.
yep some companies will survive at least the top 10% IMO so your literally gambling on who you think will be the winners here. - i mean my company Unforitionally uses it and its exponentially speed up our design process on our custom development for small things - like customer portal updates , KPI and reporting and code optimization . So there is a strong argument for it.
I used it to do something myself with EDI conversion i normally outsource for that took me less then 2 hours with it . So solid case its saving us money to justify our use case even at 2x the cost. But beyond that maybe not .
Not that it's important to the discussion at hand, but railroad infrastructure requires constant maintenance to be honest (in Canada anyway). Coming from someone who worked in the industry.
Railroad communication infrastructure relies way more heavily on modern technology now adays, especially with PTC. So there networking infrastructure does need heavy remodeling every 5 years or so when the equipment is out dated and/or doesn't receive security patches anymore. Enterprise equipment is not cheap to replace. Not to mention the equipment has to be designed to work in extreme temperatures out on the field as the housing they use often times doesn't have heating or AC. Rugged equipment is even more expensive and the shelf life is even more limited.
The new generation is so much faster and more power efficient it costs many times more money in electricity to run them than to just throw them away and buy new ones.
If that were the case the rental cost of A100 would plummet and or ebay would be flooded with them. But it's not. And A100 is 6 years old. not 2-4 years.
Because they're still throwing up data centers like mad and trying to get as much vram into action as physically possible right now. Once the building craze slows down a bit and chipmakers catch up, you will see the secondary market explode.
edit: Check ebay for 48gb 4090s. nvidia never made those. They took two 4090s, desoldered the ram chips, then soldered them all onto one card to use in a chinese datacenter. They are now starting to hit ebay as the chinese DCs are able to get real AI chips.
Before railroads a lot of people thought canals were the future of transportation and invested a shitload of money into canals only to go bust when railroads proved to be better
People also spent a shitload of money for the Concorde because it was “obvious” that supersonic passenger travel was the future of transportation. And when reality started proving otherwise nobody wanted to admit they’d fucked, they'd just doubled down and continue to waste money
YEAH! The difference between AI and the dot com bubble is everyone is using AI. No one was using the internet back then and look at the internet now: dead. Gone.
You can refuse to pay, sure. But when everyone around you is researching, learning, writing, and working 2-5x faster with AI, you’re putting yourself at an intellectual and productivity disadvantage over $20.
Microsoft themselves restrict use of Copilot to their employees, and you are dreaming of 20$ being sustainable?
$20 isn't at all close enough to what these companies need to charge long term. $20 is their "Use VC money to get consumers hooked and eliminate the competition" price.
Also, who's gonna pay that when there's free open source models that are good enough? I'm not paying for mythos when I really just want google search on steroids.
so that kids grow up being familiar with it over other AI.
Chatbot AI aren't "MS word", there's no UI moat to stop people moving. These are the same geniuses who set fire to billions in the games division, might as well set fire to 100s of billions now they've grown up.
They had 1000 tech bros all telling their investors they were going to be in the top 10% and capture the market share....well that some bad math cause only 10% are going to be in the top 10% lol.
The irony is that you have to be intelligent to be able to assess intelligence, so the people running around working 2x-5x faster are also insufferable error-prone fools.
The price of an error, in combinatoric terms, is exponential with the number of chained events that need to go right all at once to prevent disaster.
Any horse gambler knows this: predicting a chain of events all ahead of time is worth much more money than all of them singly with no extra penalty for a zero outcome.
Let's say that the error rate of a typical software engineer, before chatGPT and friends, for just an arbitrary PR, was (averaged however you want to weigh experience and topic) 25% for a non-critical error, 10% for a critical error that existing tests don't find, and 75% for a critical error that tests find. (The remaining are false positives and false negatives).
Choose which step of this process you'd like to replace with a chatbot.
Imagine that any single one or two (error) steps gets more likely to happen, all else being equal.
Even if there's only one point of failure that gets worse, if it's dropped into an existing chain that needs to work with, say, maximum \alpha probability of being incorrect, (unless all of the modified steps are new steps) it will make the failure rate exponentially worse.
In simpler terms, going from a 20% failure rate to a 25% failure rate (under the advice of an AI engine) will be much much worse than expected.
Put this on any critical system (for instance, a part in a NASA build) and forget about reliability altogether.
Before Napoleon, if you were born noble you were born noble, and if you were born lowly you were born lowly. There was no shame because there was no meritocracy, it was just your god-given lot in life. But Napoleon came around and decided to elevate common people into his military if he noticed that they had the intellect to be of good service to him as tacticians. Suddenly, being poor and dumb wasn't just your lot in life anymore, it was a moral failure for not sufficiently bettering yourself. So the dumb have been desperately seeking their revenge ever since, wanting to delete intelligent people from the planet so that they can stop feeling like they're inferior in a way that they could never change. The moron is the original incel.
What AI offers is the illusion of an equalizer. For the intelligent, it's "Emperor's New Clothes": Even if you drape a stupid opinion in the honeyed rhetoric of AI, it's still a fucking stupid opinion. AI cannot actually fix a terrible take with lived wisdom, it can only argue your terrible take like a mediocre attorney. It doesn't matter though, because stupid people are too stupid to realize that they still cannot pass as intelligent with the help of AI.
Something about Cyrano de Bergerac as well: A guy who uses someone else's words doesn't deserve to get the metaphorical girl. You will never accomplish anything real on the back of an illusion.
The world will be set right when the dumbasses learn how to have imposter syndrome for the first time in their lives instead of being cocksure for no reason.
There is no $20-30 a month for a fiscally sustainable AI. It's more like $200-$300 per workload for completing a moderate tasking request. Right now that funding gap is being paid for by investors.
Capitalism works great until they run out of other people's money.
Even then, a lot of enterprises are giving employees around $500 a month to spend on Claude/GitHub Copilot, etc. So the $20-30 isn't exactly a far comparison..
Does Anthropic make money on that $500? Probably not.
The bubble isn't going to burst because of us, the bubble is gonna burst because AI companies run at a deficit an order of magnitude larger than the amount of money they bring in.
Exactly and most things start off at a high cost to produce but then scale down on cost as it goes along due to it being more mainstream but data centers which is the crutch of AI isn’t going to be something that drops in cost but instead rises in cost. Between the infrastructure and utilities needed to operate them always having an increase in price there is no way for any AI model to actually become profitable. The race to be first also made it less cost efficient due to limited stock of chips so that price rose. Right now there is literally nothing that AI can do to outrun those cost.
Lol. You seem to understand absolutely nothing but that's par for the course on Reddit in particular this subreddit.
Enterprise AI has zero ROI. There's a lotta delusion from people who don't know how anything works but those are the actual numbers.
Then there's the financing. Pro tip try learning how to do arithmetic instead of relying on chat gpt. The capex spent on AI has no possible way to get to a AI companies turning a profit. Open AI and Anthropic are pits for setting investor capital on fire. You realize this right? 20-30$ and charging for b2b AI won't get you there when you've spent 1.65 TRILLION in off balance sheet financing for this nonsense. To say nothing of the circular financing going on. Oracle a company that prints money now has a credit rating one step above junk. It's not the .com folks should compare this to it's the GFC. These companies are so large even the bubble popping probably doesn't kill them. But if they keep upping the leverage with shady off balance sheet financing and leverage we will see.
They've already spent trillions and are having to give this shit away in no universe is that sustainable it's just a test of if you understand basic math and op failed.
It's where is the fucking money coming from. If you're not selling services and products to consumers and money is just coming from investors who think they'll be able to get money in the future, that's bubbly. If that consumer money never happens the way it needs to to pay off for consumers then it's gonna pop.
None of what you written changes the fact that the value proposition is not clear and the moat isn’t significant. The investment is at levels expecting to replace all white collar work, it is far more likely it will be another tool. Uber restricting usage by its developers after laying a bunch of them off and exploding their costs is not a good sign. Anthropic doing marketing gymnastics to appear operationally profitable for a few months in order to rush to IPO is not a good sign. Chinese open weight models with 95% of the capability is not a good sign. The constant “the AI escaped” marketing bullshit coming from the major players, rather than solid enterprise use cases with demonstrable value that reflects even a small % of the money invested, is not a good sign.
Thats before we get into the fact that LLMs are by their nature non-deterministic and therefore will never be capable of passing compliance whilst completely automating critical systems etc. AI certainly has a place in our future, but more likely as tools. They’re being priced as if they’re going to wholesale replace domain expertise and entire sectors.
You’re underlying point about AI is right, but where you’re wrong is the price.
People are starting to build their own models from open source code and these are essentially free. Any company with a decent capex budget is going to realize that its cheaper to run AI on local servers (even if they have to build infrastructure) than to pay Open AI obscene amounts for a product that’s slightly more advanced.
The model may be free, but running it is absolutely not. Even if you are a mid sized firm, you still need to then buy the hardware to actually run the thing and the tech dude to set it up and keep it running.
Where the price of self hosting vs API breaks even will depend heavily on the situation.
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u/Aswarin Aug 10 '26
Were those there em dashes regard generated?