Join the discussion
Write your take first — we'll ask for email only when you're ready to publish.
- Hacker News
- I'm looking forward to prices for RAM and SSDs returning to sane levels.by zombot
- The sooner it pops, the better. Later on it will be even worse.by lousken
- Wow I hope this is true. This can only be good for the world.
I'm sure AI will still come but it is too disruptive now. It needs a slowdown. As usual all the greedy investors are to blame.
by welwala - There's a bubble around data centers, mainly. That's fueled by projected demand of AI and assumptions companies make about how the pie for that revenue is going to be divided up.
What's very real is the rapidly growing amount of revenue for both OpenAI and Anthropic. That's already tens of billions per year and growing quite rapidly. Investments against that kind of revenue aren't completely horrible. To a point. But at the multi trillion dollar valuation level, of course there are going to be issues with living up to those expectations.
In my view some of the base assumptions are looking not so solid currently. It's not a given that OpenAI and Anthropic will end up with most of the revenue. The Chinese trust Silicon Valley just about as much as vice versa. Which is why they are doing their own models, chips, and data centers. This is driving a rapid commoditization for things like frontier models, open model weights, and chips. This in turn gives countries outside the US a lot of options to stay independent. Which burst the bubble that all that global revenue was going to flow towards Silicon Valley. Some of that still might. But that will have to happen based on cost and merit.
There are also geopolitical circumstances that cause most data center plans to be bottle necked on permitting, chip shortages, grid connectivity, availability of gas turbines, gas, solar panels, inverters, batteries, water, and other resources. As it turns out, you can't just willy nilly plan for hundreds of GW of data centers and expect those to pop into existence overnight along with all the needed infrastructure. Most of the announced/planned capacity for this will likely not be realized. Certainly not this decade. 5-10% by 2035 would be a lot given all the constraints and scarcity. No amount of reality distortion can change the physical constraints on this topic.
The good news is that most of the money needed for this hasn't been spent yet. And what has been spent won't be going to waste. Up and running data centers are a hot commodity right now. They won't be running idle if a bubble bursts. But probably investors dreaming of multi trillion dollar IPOs might be a bit more cautious now that SpaceX stock is trading well below its IPO value.
- I mean we are due our 6-8 year financial crash that we won't learn from. Once again it'll be coming from the USA's feral financial investments all to be bailed out by the tax player whilst the rest of the world picks up the pieces. Maybe its time we moved away from the petro-dollar if the USA can't be trusted to keep its finances in order.
- Financial markets are already diversifying away from dollar as the sole reserve currency. Think swiss francs are doing pretty good.
- > And the fundamentals here are OpenAI and Anthropic, which are massively valued companies. They have humongous commitments and are generating real revenue on the order of twenty billion a year.
I think the size of their commitments is predicated on demand. Anthropic's annualized revenue run rate is now close to $50 billion, a fivefold increase from a year before [1]. They are making big investments, like $200 billion on Google's TPUs over the next five years [2], but those numbers seem justified by their expected revenue this year alone. If Anthropic cannot capture that revenue, someone else will.
Stock market valuations are a different beast, I personally think we have been due for a correction for ages now. But criticism of AI investment and particularly betting that it will all come crashing soon appears misguided to me. I can see a future where AI expenditures shifts around, not a future where everyone simply stops spending in AI all of a sudden.
[1] https://www.marketscale.com/industries/software-and-technolo...
[2] https://www.resultsense.com/news/2026-05-06-anthropic-200bn-...
by pu_pe - > The same thing happened with their massive investment in Anthropic. They accounted for $53.4 billion due to deals with Anthropic last quarter. He said if you follow one Anthropic dollar through the earnings release, it's counted in AI business revenue, chips business, and AWS segment revenue.
That is insane if that is true, is that even legal?
by techpression - It is. However remember that when the bubble pops it all works in the reverse direction too. Suddenly you have to mark down investment losses, missed revenue, and written off commitments.
Companies can go from looking really good to a complete financial mess almost overnight when all that leverage and self-reinforcing stuff unwinds. See last weeks headlines for one such scenario.
by cmiles8 - There's a bit of Chinese whispers happening here. If you read the original piece they're talking about -- https://www.theregister.com/paas-and-iaas/2026/07/31/amazon-... (definitely worth a read, it's hilarious) -- you'll realize it means that that Anthropic dollar is "counted" multiple times in the marketing of three different Amazon businesses.
As far as accounting of revenue is concerned, it would have been counted as appropriate. Else, like you, I would guess it's not very legal.
by keeda - It's obvious. Most people were expecting this.by feverzsj
- "The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities ¾ that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future ¾ will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands." Warren Buffett 2000 https://www.berkshirehathaway.com/2000ar/2000letter.htmlby abirch
- There is something I have been pondering recently. If we compare the cost of AI subscriptions (let's say Claude's 100/month) to a median developer salary (let's say 100k/year to 200k/year), the difference is orders of magnitude. This fills like a gap that needs to close. I suspect llms are too cheap right now but will raise their prices to a point where only big companies will be able to afford subscriptions to use them. I think soon we will see models that are only sold at very high prices.by lluisantoni
- > 100k/year to 200k/year
Is this range just Silicon Valley or what is this? Even including just Europe, you're looking at a lower bracket of 10k. If you expand to the rest of the world... Or do you think rich cities in the USA, where developers make 100k+ per year, can alone sustain this industry?
by lopis - I don't understand this argument.
Go to OpenRouter and look at all of the unsubsidized providers.
by cracell - > I suspect llms are too cheap right now but will raise their prices to a point where only big companies will be able to afford subscriptions to use them.
"A.I." == "Artificially Inexpensive"
- LLMs are not as cheap on enterprise plans.by terabytest
- Also, something else to add. At first I thought no one wants to build data centers in hotter areas in the middle of deserts (many places in the American continent). So nobody would spend money building a data center in the Chihuahuan Desert for instance. However, a game of latencies will either require cover llm access from these areas, or make people move closer to the other data centers. In the former, llm prices will go up; in the latter, there will be a migration towards data centers that increase the price of the areas around.by lluisantoni
- Open weight models tell a different story. Inference is not that much more expensive than what a 100$ plan would allow and will only get cheaper (for current capability models of course, frontier not so much).by KeplerBoy
- Why is this a gap that needs to close? Can you elaborate more than feelings? Right behind these big models are local inference with AMD/Apple having a great hardware start and a lot of local sized models making great progress.by wookmaster
- This is something I have been pondering recently. If I compare the cost of a plunger ($23.99 on Amazon) to a median plumber salary ($62,970 per year per BLS), the difference is orders of magnitude. This feels like a gap that needs to close. I suspect plungers are too cheap right now but will raise their prices to a point where only big companies will be able to afford subscriptions to use them. I think soon we will seen plungers that are only sold at very high prices.
- Of course we know it. It’s been obvious since at least 2023. Everyone in AI oversells, except a few companies that built an actual business with revenue, like Midjourney. There is no AGI coming anytime soon no matter how much hype is being thrown around. We are not in the singularity. However, peak bullshit is NEAR.by Hoasi
- The trick the frontier labs have done is define AGI as "better than humans at the vast majority of valuable knowledge work" which is definitely not what most people think it means.by CuriouslyC
- I would argue we still have not even really gotten started.
What do we have in the decade ahead? Robotics in every household, models 10x+ faster and more intelligent than today.
Really no significant impact in life sciences, R&D, and 'offline' world / robotics today as of yet, which is where most of the value will live.
by digitcatphd - Yep, that is what the bet is. The build out will continue, even if it looks different.
The Internet was a 'bubble' at one point, and after it crashed in 2000, it didn't go away, it continued to build out. We're still using the Internet after the Internet bubble popped.
- The absolutely massive scale and influence of the Web happened after the dot com burst.by Waterluvian
- Robotics in the household has been the realm of science fiction for decades and it still hasn't happened. We get dedicated, compact machines like dishwashers and washing machine/dryers, that's it. Most recent innovation has been the automatic vacuum.
If you want someone else to do household chores, hire someone. You can pay someone to do your house chores for years for the cost that these things will have initially.
by Cthulhu_ - Even if we agree with this take (and I do think it's a likely take that you're right on the long term), it doesn't change that it seems likely we're in a bubble, and it probably will pop.
We see a similar paradigm with lots of revolutionary technology. The initial promise is high, people get very excited, lots of money pours in, and.... 15-30 years go by before we start seeing real impact across the economy at large.
It's just a real slog to actually implement and roll out new tech.
So take robots: I can promise you that you won't see robotics in every household in the next decade (especially so if we exclude the current market of robot vacuums). Even if a company makes an incredibly capable robot "today" (and to be clear - they are not) it won't have time to scale out production, reduce costs, generate a used market that's accessible to less wealthy consumers, deal with regulatory hurdles and quality problems that only pop up in real-world usage, etc...
It's just slower than you're implying.
The change very well will happen (I'm inclined to agree that things are going to shift). That doesn't mean that the current investment is sane and will pay off.
So many historical examples of this, just two here real quick:
- Ford built his first automobile in 1896, founded a company in 1901, went out of business, got sued by ALAM, didn't build more than 10k Model T's until 1910, then only finally hit real scale (of low hundred of thousands of units) in 1913: More than a decade to "basic scale". Household ownership didn't hit 60% until 1929... 30+ years later.
- The initial web enthusiasm, followed by the dot-com crash in early 2000s...
by horsawlarway - Outside a relatively small world of circular investment and FOMO feeding FOMO the general consensus seems to be “let it burn.”
It appears very unlikely we will ever see an IPO of OpenAI. Anthropic appears less doomed, but still iffy at best. Tons of other large, but little discussed, AI startups are just dead-companies-walking at this point.
The likes of AWS are showing good headline numbers but are taking out massive debt to build infrastructure that looks increasingly unneeded. Those with capacity are looking to offload it, quickly. Yes AWS has “committed contracts” for this capacity but if those commitments are with shaky AI startups then it’s mostly just fluff PR and these hyperscalers will get left holding the bag on all this debt.
by cmiles8 - More and more companies are signing up with OpenAI and Anthropic at near exponential growth to automate everyday tasks. If anything, these two should manage to IPO just fine. The rest of the downstream startups probably won't make it.by farseer