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Everyday AI looks more like the '08 housing bubble (lemmy.ca)
submitted 1 year ago by to c/technology@lemmy.world
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[–] 6 points 1 year ago (6 children)

I don’t think the AI bubble will burst is because it is driven by companies that actually make money.

Last I looked, the big AI companies are all hemorrhaging money.

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  • [–] 0 points 1 year ago (5 children)

    It's perfectly normal for a growth business to invest more than they make, I didn't say they were profitable yet, but they are making money.

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  • [–] 2 points 1 year ago* (last edited 1 year ago) (4 children)

    It is not "normal" to run a 4 year money loser and claiming to be worth billions.

    Only in made up financial land does that work, and causes cyclic depressions where the working class loses wealth, and the oligarchs further concentrate wealth in their hands.

    And you said its driven by companies making money... the big AI companies driving this bubble are losing money.

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  • [–] 0 points 1 year ago (1 child)

    It is not “normal” to run a 4 year money loser and claiming to be worth billions.

    Maybe not, but it is absolutely normal to lose money for years to make a profit later.
    Microsoft was ready to lose money on Xbox for 10 years to take a place in the console market. And it's a very profitable market for them now.
    Microsoft tried some of the same with Windows Phone, where they invested billions for years before they gave up.

    One of the most hyped AI companies is probably OpenAI, and they absolutely have products that makes them money. They are not profitable yet.
    But among the bigger stock holders are Nvidia and Microsoft, and if OpenAI goes under, they will absolutely survive just fine. But I don't think they will.
    OpenAI is owned by companies that know how to make money, and apparently OpenAI knows how to do it too, and has been quicker to make money on for instance ChatGPT than Google was on making money on YouTube.

    Some AI companies will go down, that's the nature of being in a cutting edge business, and it's the nature of competition. But I think the AI business will mature and stabilize like most businesses have, not burst like a bubble.

    Nobody called it a bubble when the smartphone market exploded. Because everybody could see the value of the product, although it's not quite the same, many companies have been forced out of the smartphone market due to competition. I think the AI market will be mostly similar.

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  • [–] 3 points 1 year ago*

    Microsoft was ready to lose money on Xbox for 10 years to take a place in the console market. And it’s a very profitable market for them now.

    Is it? They recently had mass layoffs in the Xbox division and had to jack up prices for gamepass. Compared to Sony and Nintendo, their console sales are pitiful. This is after pouring billions of dollars into the Xbox brand.

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