| AI bubble about to pop? 09:41 - Nov 18 with 2654 views | Swansea_Blue |
Carol Cadwalladr has been trying to chase and make sense of the money around this (e.g. https://broligarchy.substack.c and now we have the Google boss admitting it is a bubble https://www.bbc.co.uk/news/art
There have been rumblings but this is the first time I’ve seen the Beeb put the concerns front and centre.
Anyone with an interest in the industry or financing/investing in it that can help make sense of whether this is something to worry about?
(All I know is that the AI summary function on Google is thoroughly unreliable!) [Post edited 18 Nov 2025 9:44]
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| AI bubble about to pop? on 09:48 - Nov 18 with 2292 views | SomethingBlue |
The sheer dumbness of betting everything on this stuff is breathtaking and will doubtless hit the working person a zillion times harder than those responsible. [Post edited 18 Nov 2025 9:49]
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| AI bubble about to pop? on 10:08 - Nov 18 with 2162 views | leitrimblue |
I just asked AI what noise the AI bubble popping would make?
It replied that 'it wouldn't make any noise, as its just a metaphor for an economic correction'.
AI is zero craic |  | | |
| AI bubble about to pop? on 10:20 - Nov 18 with 2100 views | DarkBrandon |
This is definitely something to worry about. It seems a pretty big risk factor that could - perhaps - cause the next crash/recession.
Will it? Nobody really knows. I think the best case is that some good number of the startups fail pretty spectacularly but some number of them go on to great things. Plus a lot of the investment from the big boys (Meta, Google, Apple) has come from cash, rather than debt, so contagion should be limited in the event things go wrong.
The downside risk is that a huge chunk of recent stock market growth has been in a handful of companies whose value is either directly (OpenAI) or indirectly (Nvidia) tied to the fate of AI, and it is at least possible that there is no good path to profitability for the sector. If that goes wrong then the market could tank, depressing wealth and pension funds and slowing/stopping growth in the States. Which would be bad.
The models took huge leaps forward for a couple of years ... but this has slowed dramatically as it seems like all the training data has been consumed. Can they get smarter? Can the model get better?
We don't know. But there are a lot of predictions.
Me? I'm going to be hedging against. [Post edited 18 Nov 2025 10:21]
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| AI bubble about to pop? on 10:34 - Nov 18 with 2034 views | bsw72 |
Not really a bubble pop as it’s very different to the .com bubble in the early 2000s as these companies are actually making proper $$ profits and bringing it in from non tech clients.
The risk is the interdependencies across the big players, Nvidia, OpenAI, Google, Meta, Microsoft and Amazon and they are cross funding each other with these incoming funds and it’s just driving profits across these companies making them more powerful by the day. |  | | |
| AI bubble about to pop? on 10:39 - Nov 18 with 1995 views | DanTheMan |
| AI bubble about to pop? on 10:34 - Nov 18 by bsw72 |
Not really a bubble pop as it’s very different to the .com bubble in the early 2000s as these companies are actually making proper $$ profits and bringing it in from non tech clients.
The risk is the interdependencies across the big players, Nvidia, OpenAI, Google, Meta, Microsoft and Amazon and they are cross funding each other with these incoming funds and it’s just driving profits across these companies making them more powerful by the day. |
The big companies that are not AI based are making money, but everyone is making a loss on AI to an insane degree. Look at the cap-ex of the big companies to see how they are subsidising it. Worth also remembering that unlike traditional cap-ex on things like buildings that will still be worth something, this is all on graphics cards that will be obsolete or just overused in a few years.
Right now the whole thing is being propped up by hopes and dreams rather than anything tangible. Nobody has worked out a way to make a profit from AI yet and I imagine if OpenAI were to stick a subscription over the top of ChatGPT, their usage would dry up overnight. Businesses that have tried to use it have realised it doesn't make money but everyone has to use it because it's what all the cool kids are doing.
It's a complete shambles. |  |
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| AI bubble about to pop? on 10:43 - Nov 18 with 1963 views | nrb1985 |
Surely we did this to death last week on the other thread?! | | | |
| AI bubble about to pop? on 10:44 - Nov 18 with 1960 views | homer_123 |
| AI bubble about to pop? on 10:34 - Nov 18 by bsw72 |
Not really a bubble pop as it’s very different to the .com bubble in the early 2000s as these companies are actually making proper $$ profits and bringing it in from non tech clients.
The risk is the interdependencies across the big players, Nvidia, OpenAI, Google, Meta, Microsoft and Amazon and they are cross funding each other with these incoming funds and it’s just driving profits across these companies making them more powerful by the day. |
It's mainly the hardware providers making hard, cold cash. Nvidia, Amazon, Microsoft et al.
But OpenAI runs a monumental loss and it's committed to insane returns as well. It's about the biggest single bet made in human history. |  |
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| AI bubble about to pop? on 10:46 - Nov 18 with 1946 views | nrb1985 |
Sorry just saw this part:
"Anyone with an interest in the industry or financing/investing in it that can help make sense of whether this is something to worry about?"
I put all my thoughts in the thread from last week that was something completely different but turned into an AI thread. | | | |
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| AI bubble about to pop? on 10:46 - Nov 18 with 1940 views | J2BLUE |
| AI bubble about to pop? on 10:39 - Nov 18 by DanTheMan |
The big companies that are not AI based are making money, but everyone is making a loss on AI to an insane degree. Look at the cap-ex of the big companies to see how they are subsidising it. Worth also remembering that unlike traditional cap-ex on things like buildings that will still be worth something, this is all on graphics cards that will be obsolete or just overused in a few years.
Right now the whole thing is being propped up by hopes and dreams rather than anything tangible. Nobody has worked out a way to make a profit from AI yet and I imagine if OpenAI were to stick a subscription over the top of ChatGPT, their usage would dry up overnight. Businesses that have tried to use it have realised it doesn't make money but everyone has to use it because it's what all the cool kids are doing.
It's a complete shambles. |
I've seen plenty of big financial players say they pay the $200 a month for the advanced version of ChatGPT. Probably not enough to make a dent in the numbers but I do think it's underestimated. I've used it (basic version) every day for a week or so running investment/business ideas past it. If they suddenly made it £10 a month I would pay it.
A lot of these people say once you start using it you soon see why it's such a big thing. I was sceptical but I agree entirely now. I think I will likely use it daily for something or other.
For now, there are very limited returns. I think in 5-10 years it will be huge. |  |
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| AI bubble about to pop? on 10:54 - Nov 18 with 1894 views | Swansea_Blue |
| AI bubble about to pop? on 10:39 - Nov 18 by DanTheMan |
The big companies that are not AI based are making money, but everyone is making a loss on AI to an insane degree. Look at the cap-ex of the big companies to see how they are subsidising it. Worth also remembering that unlike traditional cap-ex on things like buildings that will still be worth something, this is all on graphics cards that will be obsolete or just overused in a few years.
Right now the whole thing is being propped up by hopes and dreams rather than anything tangible. Nobody has worked out a way to make a profit from AI yet and I imagine if OpenAI were to stick a subscription over the top of ChatGPT, their usage would dry up overnight. Businesses that have tried to use it have realised it doesn't make money but everyone has to use it because it's what all the cool kids are doing.
It's a complete shambles. |
It does seem it’s being sold on a promise and by sleight of hand. A bit of a card trick, from the financing of it anyway. I don’t doubt there are potentially large benefits from the tech.
I like Cadwalladr’s description of the ex-Silicone Valley exec she talked to: a “burn-the-whole-thing-down tech justice warrior”. When ex-leaders break ranks and speak out it’s worth paying attention imo. It’s similar to the social media moguls who won’t let their kids use the software they’ve pumped out to the rest of us. | |
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| AI bubble about to pop? on 10:58 - Nov 18 with 1878 views | nrb1985 |
| AI bubble about to pop? on 10:39 - Nov 18 by DanTheMan |
The big companies that are not AI based are making money, but everyone is making a loss on AI to an insane degree. Look at the cap-ex of the big companies to see how they are subsidising it. Worth also remembering that unlike traditional cap-ex on things like buildings that will still be worth something, this is all on graphics cards that will be obsolete or just overused in a few years.
Right now the whole thing is being propped up by hopes and dreams rather than anything tangible. Nobody has worked out a way to make a profit from AI yet and I imagine if OpenAI were to stick a subscription over the top of ChatGPT, their usage would dry up overnight. Businesses that have tried to use it have realised it doesn't make money but everyone has to use it because it's what all the cool kids are doing.
It's a complete shambles. |
"Businesses that have tried to use it have realised it doesn't make money but everyone has to use it because it's what all the cool kids are doing"
From a research note I read over the weekend:
"Next week will bring the S&P 500 3Q earnings season to a close. Thus far, 3Q earnings reports have been extremely strong relative to consensus expectations. However, recent market volatility means that investors will be focused on upcoming reports from NVDA (Nov. 19) and some of the largest consumer retailers for insights into the trajectory of AI investment and the health of the US consumer.
Company commentary this quarter shows a continued focus on AI adoption. 47% of S&P 500 companies have discussed AI during 3Q earnings calls specifically in the context of productivity and efficiency. These discussions have been most prevalent within the Communication Services (74%) and Financials (66%) sectors. The most common use cases remain coding and call centers/customer support"
The above would suggest that people likely considerably brighter than you and I are putting the technology to good use. [Post edited 18 Nov 2025 11:02]
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| AI bubble about to pop? on 11:07 - Nov 18 with 1799 views | DarkBrandon |
| AI bubble about to pop? on 10:58 - Nov 18 by nrb1985 |
"Businesses that have tried to use it have realised it doesn't make money but everyone has to use it because it's what all the cool kids are doing"
From a research note I read over the weekend:
"Next week will bring the S&P 500 3Q earnings season to a close. Thus far, 3Q earnings reports have been extremely strong relative to consensus expectations. However, recent market volatility means that investors will be focused on upcoming reports from NVDA (Nov. 19) and some of the largest consumer retailers for insights into the trajectory of AI investment and the health of the US consumer.
Company commentary this quarter shows a continued focus on AI adoption. 47% of S&P 500 companies have discussed AI during 3Q earnings calls specifically in the context of productivity and efficiency. These discussions have been most prevalent within the Communication Services (74%) and Financials (66%) sectors. The most common use cases remain coding and call centers/customer support"
The above would suggest that people likely considerably brighter than you and I are putting the technology to good use. [Post edited 18 Nov 2025 11:02]
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Oh … it is definitely being put to use.
The question is whether there are enough people willing to pay enough money to cover the massive costs of training these models, then running them. | | | |
| AI bubble about to pop? on 11:08 - Nov 18 with 1788 views | DanTheMan |
| AI bubble about to pop? on 10:58 - Nov 18 by nrb1985 |
"Businesses that have tried to use it have realised it doesn't make money but everyone has to use it because it's what all the cool kids are doing"
From a research note I read over the weekend:
"Next week will bring the S&P 500 3Q earnings season to a close. Thus far, 3Q earnings reports have been extremely strong relative to consensus expectations. However, recent market volatility means that investors will be focused on upcoming reports from NVDA (Nov. 19) and some of the largest consumer retailers for insights into the trajectory of AI investment and the health of the US consumer.
Company commentary this quarter shows a continued focus on AI adoption. 47% of S&P 500 companies have discussed AI during 3Q earnings calls specifically in the context of productivity and efficiency. These discussions have been most prevalent within the Communication Services (74%) and Financials (66%) sectors. The most common use cases remain coding and call centers/customer support"
The above would suggest that people likely considerably brighter than you and I are putting the technology to good use. [Post edited 18 Nov 2025 11:02]
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My numbers come from an MIT report on the AI industry that found that 95% AI initiatives had zero return on investment.
And as someone who is a fairly senior software engineer, AI can be useful, but not as a job replacement. Just this morning I witnessed someone have a circular argument with one when it repeatedly tried to import "main" using Go which in a very junior would tell you that you cannot do. | |
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| AI bubble about to pop? on 11:29 - Nov 18 with 1706 views | BloomBlue |
Its the old classic of the unknown, but it sounds modern, so I need to invest, situation.
The slight difference with AI and the last dot com bubble burst, is then you had a lot of new companies who we're totally overvalued, companies that had only made losses up to that point. It was a bubble built in theory and once it started going backwards the companies had nothing in the pot to ride the wave.
Now you have some of the biggest companies in the world, Google, Amazon, Meta, heavily involved in AI which should give some strength/backbone to this bubble. But Pichai is correct, if it does burst its not only going to impact Google etc. |  | | |
| AI bubble about to pop? on 11:30 - Nov 18 with 1704 views | nrb1985 |
| AI bubble about to pop? on 11:08 - Nov 18 by DanTheMan |
My numbers come from an MIT report on the AI industry that found that 95% AI initiatives had zero return on investment.
And as someone who is a fairly senior software engineer, AI can be useful, but not as a job replacement. Just this morning I witnessed someone have a circular argument with one when it repeatedly tried to import "main" using Go which in a very junior would tell you that you cannot do. |
"My numbers come from an MIT report on the AI industry that found that 95% AI initiatives had zero return on investment"
Well then you need to let those 47% of CEOs mentioned above know because they obviously haven't got the memo. | | | |
| AI bubble about to pop? on 12:04 - Nov 18 with 1563 views | JakeITFC |
| AI bubble about to pop? on 11:30 - Nov 18 by nrb1985 |
"My numbers come from an MIT report on the AI industry that found that 95% AI initiatives had zero return on investment"
Well then you need to let those 47% of CEOs mentioned above know because they obviously haven't got the memo. |
Kind of an easy buzzwork to chuck in an earnings call or year end report though isn't it - utilising AI could mean they've built amazing agents to make huge efficiency drives or that someone in the company has a Co-pilot trial licence.
The truth is of course somewhere in the middle but I don't think we are on the cusp of a revolution (yet). |  | | |
| AI bubble about to pop? on 12:05 - Nov 18 with 1567 views | Illinoisblue |
As an aside, it’s notable how rubbish a lot of AI-generated content is. Instantly recognizable from its robotic trying-too-hard tone.
Also sad how media outlets are using AI to generate match previews and match reports. |  |
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| AI bubble about to pop? on 12:07 - Nov 18 with 1550 views | bsw72 |
| AI bubble about to pop? on 10:44 - Nov 18 by homer_123 |
It's mainly the hardware providers making hard, cold cash. Nvidia, Amazon, Microsoft et al.
But OpenAI runs a monumental loss and it's committed to insane returns as well. It's about the biggest single bet made in human history. |
The idea that only the hardware companies are making real money in AI is too narrow a view. Nvidia and the cloud giants are clearly profiting right now, but I disagree about OpenAI being the biggest gamble and doesn’t factor in how the business actually works. OpenAI already has one of the fastest-growing software and platform businesses out there, with steady subscription income, enterprise contracts and constant product expansion. The losses are mainly the result of intentional heavy investment, not a sign that the model itself doesn’t work.
OpenAI is certainly a high-risk, high-investment company, but it’s not operating on blind hope. It has multiple revenue streams, a huge and growing user base, and a product layer that sits directly on top of the demand created by all that hardware investment.
The hardware providers are cashing in first as it strives to meet capacity demand but historically, the biggest long-term value goes to the companies that build the capabilities and platforms people rely on every day. That’s the position OpenAI, DeepMind and Anthropic are working toward. Assuming the upside stays only with the hardware companies ignores how every previous tech wave eventually shifted value upward. | | | |
| AI bubble about to pop? on 12:19 - Nov 18 with 1463 views | nrb1985 |
| AI bubble about to pop? on 12:04 - Nov 18 by JakeITFC |
Kind of an easy buzzwork to chuck in an earnings call or year end report though isn't it - utilising AI could mean they've built amazing agents to make huge efficiency drives or that someone in the company has a Co-pilot trial licence.
The truth is of course somewhere in the middle but I don't think we are on the cusp of a revolution (yet). |
That first part definitely has some truth to it and we did have a few quarters ago the market basically punishing companies and CEOs that didn't mention an AI strategy on earnings calls.
However, I think we are well past that now and the labour market data which shows very low hiring despite a growing economy and revenues (highly abnormal) perhaps points to something more structural happening under the surface. | | | |
| AI bubble about to pop? on 12:24 - Nov 18 with 1420 views | soupytwist |
Peter Thiel has apparently decided that he's had enough of owning chunks of Nvidia and power company Vistra, at least for now. And to a lesser extent Tesla, which presumably means he doesn't think that Musk is going to be able to create the kind of share price growth needed for Musk to earn the eleventy trillion dollars or whatever the sum was that the shareholders said they'd pay him if he meets market value targets.
He has bought a chunk of Microsoft (who have a 27% stake in OpenAI) and Apple, so I've no idea what it all means.
https://broligarchy.substack.c |  | | |
| AI bubble about to pop? on 12:28 - Nov 18 with 1394 views | DanTheMan |
| AI bubble about to pop? on 12:07 - Nov 18 by bsw72 |
The idea that only the hardware companies are making real money in AI is too narrow a view. Nvidia and the cloud giants are clearly profiting right now, but I disagree about OpenAI being the biggest gamble and doesn’t factor in how the business actually works. OpenAI already has one of the fastest-growing software and platform businesses out there, with steady subscription income, enterprise contracts and constant product expansion. The losses are mainly the result of intentional heavy investment, not a sign that the model itself doesn’t work.
OpenAI is certainly a high-risk, high-investment company, but it’s not operating on blind hope. It has multiple revenue streams, a huge and growing user base, and a product layer that sits directly on top of the demand created by all that hardware investment.
The hardware providers are cashing in first as it strives to meet capacity demand but historically, the biggest long-term value goes to the companies that build the capabilities and platforms people rely on every day. That’s the position OpenAI, DeepMind and Anthropic are working toward. Assuming the upside stays only with the hardware companies ignores how every previous tech wave eventually shifted value upward. |
The CEO of OpenAI said they are losing money on people with $200 a month subscriptions...
They are losing lots of money not just because they are investing but because if you actually charged what was required to run these things, people would not pay for it. | |
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| AI bubble about to pop? on 12:36 - Nov 18 with 1333 views | Swansea_Blue |
| AI bubble about to pop? on 12:24 - Nov 18 by soupytwist |
Peter Thiel has apparently decided that he's had enough of owning chunks of Nvidia and power company Vistra, at least for now. And to a lesser extent Tesla, which presumably means he doesn't think that Musk is going to be able to create the kind of share price growth needed for Musk to earn the eleventy trillion dollars or whatever the sum was that the shareholders said they'd pay him if he meets market value targets.
He has bought a chunk of Microsoft (who have a 27% stake in OpenAI) and Apple, so I've no idea what it all means.
https://broligarchy.substack.c |
I don't know what it all means either. The sums of money involved are phenomenal though, so someone's making a mint somewhere. | |
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| AI bubble about to pop? on 12:52 - Nov 18 with 1243 views | nrb1985 |
| AI bubble about to pop? on 12:36 - Nov 18 by Swansea_Blue |
I don't know what it all means either. The sums of money involved are phenomenal though, so someone's making a mint somewhere. |
In the case of NVDA, probably quite simple in that he's selling some ytd winners and looking at some things that have a bit more juice in the trade.
Apple has had a big run recently but still quite low levels of enthusiasm for it at the moment and valuation is still modest. Microsoft is just an amazing company full stop and I, like many, always try to add to my position on on any weakness. | | | |
| AI bubble about to pop? on 13:10 - Nov 18 with 1137 views | WD19 |
| AI bubble about to pop? on 09:48 - Nov 18 by SomethingBlue |
The sheer dumbness of betting everything on this stuff is breathtaking and will doubtless hit the working person a zillion times harder than those responsible. [Post edited 18 Nov 2025 9:49]
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In 20 years there wont be many working people left. |  | | |
| AI bubble about to pop? on 14:48 - Nov 18 with 970 views | Swansea_Blue |
| AI bubble about to pop? on 12:05 - Nov 18 by Illinoisblue |
As an aside, it’s notable how rubbish a lot of AI-generated content is. Instantly recognizable from its robotic trying-too-hard tone.
Also sad how media outlets are using AI to generate match previews and match reports. |
Not a big fan of chickendogs then? | |
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