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When the AI bubble bursts (newslttrs.com)
submitted 1 year ago by to c/technology@lemmy.world
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Sooner or later the current AI bubble is going to burst. What's going to happen when it does?

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[–] 13 points 1 year ago (4 children)

Even technologies that totally transform society, like trains or the Internet, can overinvest and eventually pop. It doesnt mean the tech goes away, it just means investors take a bath and the dead weight gets burned off.

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  • [–] 1 point 1 year ago* (3 children)

    Yes I think Facebook and Microsoft may lose money on this, you could call that over investing, but for it to be a bubble that burst, companies need to go down, and people lose money on it.
    Otherwise you may be looking for a completely different word which is fad, a period where something is over hyped, but quickly settles down like Fidget Spinners.
    .com was a bubble because a lot of people lost a lot of money, so much so that it reverberated through the entirety of financial systems globally. I don't think we will see a financial bubble burst due to AI, that is more than 1% of that at most.
    META is throwing out money like crazy on their "META" project that will never succeed, and they are doing the same with AI, but they will not go bankrupt on it, and AI will almost guaranteed be more successful than the "META" project.
    What I mean is that generally more money will be made on AI, than is lost experimenting with it.

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  • [–] 5 points 1 year ago (2 children)

    It would be pretty unusual for a company on the scale of Facebook or Microsoft to go under due to a bubble like this, although it is slightly possible they might slip down a tier in the shuffle. Its more likely well see lots of shitty little companies tacking AI onto things that dont need AI go under, and the speculative ventures burning investor money on market share or technologies that may never turn profitable will be thinned out greatly. Its also possible we could see some big names that dont have revenue outside the AI market suffer financial setbacks and be absorbed. Its also possible the bubble could continue to grow for years and we could see some really ridiculous investments and an even more devastating crash in the end.

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  • [–] 0 points 1 year ago (1 child)

    I think the difference here is that you can't quite just put an AI tag on something, and then investors flock to give you money.
    The AI companies that are invested in, are mostly companies that actually have something to show. And the biggest investment and benefactor is Nvidia that actually makes loads of money from AI products.

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  • [–] 2 points 1 year ago

    But they do. Lots of crap has "AI powered" plastered on the investor prospectus with no real world application. The worst Ive seen has been targeted at audiences that wernt burned by .com, such as in China, but even in the US youll have a hard time finding a startup that doesnt incorporate AI in some way.

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