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- Hacker News
- Most of the post makes sense to me, even if I don't agree. This part however:
> The news is full of stories of corporations that are throttling the employee use of AI since the costs to use the software are a lot higher than expected
is not something I've seen. News is not "full of stories" of this behaviour. There are a few anecdotal stories here and there.
by ghusto - Maybe it would be good if more electricity generation became available for other purposes like heat pumps and electric cars? Although, perhaps it doesn’t help as much if it’s in the wrong place.
Also, cheaper RAM would be nice.
by skybrian - I generally like this but I think the diseconomies of scale bit is narrow. Open models are showing us that it’s just the frontier companies in the west which are bloating and ignoring efficiency and that they’re leaving a lot of efficiency on the table.by ixtli
- > Circular Revenues: A small handful of tech firms, chip manufacturers, and AI companies are propping each other up by investing and buying from each other.
> Increasing Corporate Skepticism: The news is full of stories of corporations that are throttling the employee use of AI since the costs to use the software are a lot higher than expected.
Real AI spend is out of control, with the news is full of stories about corporations trying to keep a lid on it, but also real AI spending is low and concentrated to a few firms.
I don't know. This doesn't feel very coherent to me, but rather like a collection of assertions that are adopted because they individually say something bearish about the industry.
Certainly some investments will have been overreaches, but I find it pretty unlikely that any of the compute build-out to date is going to be left sitting idle one or two or five years from now.
by NiloCK - “Infrastructure spend by providers is high and increasing while customers are actively trying to spend less”
It’s not the same people doing both.
by ofjcihen - I think after the AI crash the biggest winner will be Apple.
They will release MacBook Pro M10 or whatever that can comfortably run Opus5 levels of performance local model for software development/general ai that is baked in the MacOS for 7k USD.
by romanovcode - They are already winners for not sinking money in it.by weezing
- I've been reading a lot of stories like this lately. I'm no business genius, but you'd assume that investors are. Are they just blind or are they burning cash on purpose. What's the steelman argument here?by laszlojamf
- > I'm no business genius, but you'd assume that investors are.
Absolutely not a reasonable assumption at all. Most people are not very good at their jobs.
> What's the steelman argument here?
If you're right about your prediction, but wrong about the timing, then you're wrong. The markets can stay irrational longer than you can stay solvent. Meaning, even if you know it's going to crash eventually, you don't know if it's tomorrow or in three years. Betting on stocks going down is extremely risky -- you have to get the timing pretty much exactly right, or you lose everything (potentially much more than you put down, depending on how you do it). Meanwhile, bull positions are basically free money until this point. Getting completely out of the market means you lose to inflation, although many investors have taken this strategy anyway.
by feoren - Looking at these investments through the lens of traditional businesses (which is the perspective taken by articles like this) won't make sense. It's not until you appreciate the expectation of how disruptive this technology will actually be does any of this make sense.
These people think they're on the verge of creating a technology which, at a minimum, would constitute an unprecedented superweapon (and, at the extreme, would usher in a new era of civilization). Even if you don't buy-in to the take that one of these companies will reach a singularity and create a superintelligence, the cybersecurity implications alone is enough to put these products into a category outside the confines of profitability. We're already starting to see these implications become reality.
If the US NEEDS an advanced AI on an existential level, then it doesn't really matter how much it costs to make or whether or not it can produce a profit. It'll be valuable one a scale where financials like that just don't apply.
by nater5000 - When I joined my first startup, they said if you didn't have a good plan for going public or getting acquired by series C, then the D in series D stood for death. Uber et al raised like a J round. None of the rules around markets or investments are real, it's all vibes-based, and the decision-makers love talking to their ChatGPT mistresses too much to let this all come crashing down.by badrequest
- >Uber et al raised like a J round. None of the rules around markets or investments are real
Uber's a poor example because it did IPO in 2019 and its stocks are up around 75% since then.
by gruez - AI investment will crash but AI itself (the technology) will continue thriving, learning, improving and there is absolutely no way to stop it. The only reading on the crystal ball is if US companies fail, China will take the lead by leaps and bounds, so the only solution is to keep pushing the cart until the wheels come off or we all cross the finish line, together.by Kuyawa
- Yup. If there is a crash, those with cash and understanding will clean up. AI is eating the world, period.by ellyagg
- I didn't know there is a finish line.by classified
- Just like every AI cycle that came before. At every cycle, we get a new tool. But we also get an extended "AI Winter" where investment dries up. This has been happening since the 1980s, we just keep redefining what "AI" is. At every cycle we move the line a bit; at one point voice recognition was firmly in the AI camp(and before that, science fiction). Now we have a machine that can do that in our pockets and nobody cares.
Does anyone remember expert systems?
by outworlder - However, who will pay for the very expensive training if the ROI isn't there? Absent government subsidization, then likely the frontier models will be sold off to the hyperscalers by the bankruptcy administrators to wring a few more dollars out of them as they become out of date and more and more irrelevant - assuming that inference alone is profitable at a price the market is willing to pay of course, if not then yes the lights will indeed be turned off.
- it's a bit unfair to say this is the only thing that can happen. we can just as easily assume in like over a few years, US leadership identifies that AI is an arms race, and continuing down this path leads is going to lead to a zero-sum-game. and so instead of just mindlessly pushing the cart forever, we see government interventionby drudolph914
- There is "absolutely no way to stop" the thing that requires hundreds of billions of dollars of cash injected every year just to avoid falling over?by tempfile
- It can't 'learn' on its own. Models only get better with mountains of RnD for data, training, and lots of fine tuning.
So the moment investment dries up, models stop improving.
However, it's likely we'll get good 80/20 solutions where you get most of the performance of the then-unsustainable high end models for significantly less compute.
- > absolutely no way to stop it.
Unless if they take down the flat rate subs and you have to pay api prices, usage will drop a lot. Right now I freelance using gpt, if I had to pay api prices I'd probably lose 50% of the income, if not more, with the ~40% tax on top I might as well spend my time doing something else
by toasty228 - When it comes to the AI crash honestly my biggest concern is what is going to happen to the job market during and the years following the crash. Not sure how things are in the rest of the world, but as someone in their early 30s working in the IT industry in Sweden I’ve never seen the market this competitive before, even for mid level and senior roles, and it worries me what the future of employment is going to look like.
Maybe those older than me have been through this kind of thing before in 2008-2009 and in the early 2000s but the state of the IT job market in the last year or two has been really concerning to me. Anecdotally I’ve also heard it’s very tough for new graduates these days.
by _override - Yeah I can't imagine this suddenly stops.
We already have disruptions in Software engineering, image generation, video generation, etc.
Humans might not like AI, Companies do and with Claude we are no longer sitting on the right side, if a Product manager tells a Boss that the PM now can do also code, the boss will listen.
But we will see other effects in the next 5-15 years: population pyramid is crashing which will increase demand for people. We already have high demand for other jobs.
so i can see a transition for a lot of white collar workers to blue collar workers which will continue the disruption for everyone.
Then the robots come along and AI integration is done and we will have a real issue on our hand. When will this come? No clue i don't think its unrealistic to expeirernece this in my lifetime.
by Yopolo - > what is going to happen to the job market during and the years following the crash
Junior programmers will be in demand again. Someone will have to fix the mountains of vibe coded technical debt.
- One of the strong arguments in favor of AI accelerationism is net pain reduction by making the transition period as short as possible. Ideas like “pacing” or a crash and reboot will prolong the inevitable.by mosura
- I think there's a few things going on and I also believe that in many (if not most, and dare I say ALL) cases AI as an excuse for lay offs is simply a scapegoat. If AI is so great, why aren't you re-training those who are ineffective at using it, and then cutting those who still don't make the cut? If it's this amazing thing for your company, wouldn't it drive revenue up drastically?
I wish the SEC would start auditing claims about AI for job cuts, not sure if its within their ball park but there's people claiming this, when they have no receipts, and then stock goes up, if that's not market manipulation, I'm not sure what is.
- > what the future of employment is going to look like
As an already slightly outdated senior dev in the UK rapidly approaching 50 and not wanting to touch generative AI / agentic dev… … I'm increasingly looking forward to waiting tables, being a hospital porter, or anything else away from tech!
I'm thinking that if I get out soon, I might beat most of the rush and be safely employed before many of the rest of you are forced down the same path.
[more than a little defeatist, yes, but I've be been unhappy in dev for years so for me the AI driven displacement is just the final nail rather than the main big new problem]
by dspillett - > Most new technologies have been welcomed by the public with open arms.
I'm not going to predict how this is going to turn out in either direction but this statement gives me pause. I don't think that's ever been true. Yes, the siren song is strong but initially most new tech is met with skepticism. Are we so quick to forget "the internet/computers are just a fad"-type thinking?
by joshstrange - Heliocentrism calling...
Yeah, we reject anything new and scary. Gotta wonder what the cavepeople made of the wheel.
Edit: still triggered by heliocentrism in 2026? OK then.
by LogicFailsMe - Exactly, it's utter nonsense. The general public thought the first bicycles, automobiles, computers, mobile phones, smart watches, and AirPods were stupid. And now they are normal. Same with video games and dating apps.by heaney-555