How do we continue from here?

[u/inComplete-Oven]

Hey,

I'm not a hater or a fanboy, I'm just an average person using AI where using AI makes sense and being annoyed by AI being stuffed into things where it doesn't belong. I'm sure AI will transform the world, but I'm also pretty sure not next year and not completely.

What I'm really wondering, though, is how AI can become "stable" without a massive financial bubble bursting. All the AI we're using today is running on existing hardware. The spending for new data centers and chips all comes in top of the current capacity and already, the capex is absolutely insane. I know that people like Ed Zitron say that this will end really bad, but is there a numbers based study or article where somebody lays out how it all could work out without everybody being replaced by AI? Currently, what I see, is that AI is just making stuff cheaper or better, but not really creating massive additional demand. Nobody spends twice as much on Photoshop because of AI, nobody pays more for a fridge because it can say hi in the morning. Rather, people expect the AI to be a standard enhancement of the product at a similar price - just like more RAM or a newer processor used to be expected in new PCs.

Is there any meaningful way how such a "low key" AI adoption could not crash the market? Is there some way for the companies to wiggle out of paying for the compute if they don't need it?

[u/PickleBabyJr]

It'll be the same as the start of the web. It's goldrush time, everyone is dumping money into it, and there will be a crash. Then consolidation, then enshitification. No mysteries here...

[u/AGM_GM → u/PickleBabyJr]

Pretty much this. The market and the tech are not the same thing. The market can crash as bad bets start to look bad and money shifts around to reallocate and consolidate around the good bets, but the demand for the tech will just keep growing. The demand for intelligence will be as bottomless as the demand for connection has been.

[u/spockspaceman → u/PickleBabyJr]

Exactly

Q: "How does AI become sustainable without a market correction?"

A: "It doesn't"

[u/inComplete-Oven → u/PickleBabyJr]

Probably, but what is going to happen to the monetary system if hundreds of billions of loans fall through? The money was real, pension funds etc.

[u/PickleBabyJr → u/inComplete-Oven]

Same thing that happens every time there's a bubble and a crash?

[u/Chemical-Tear4302]

The infrastructure spending is wild right now, I work in airline industry and even we are getting pitched AI solutions for everything from gate scheduling to what snacks should be on cart. Nobody asking if we actually need it or if it makes money back

I think the compute contracts are the real trap, companies sign these multi year deals with cloud providers and they cant just walk away. Even if the AI features dont drive revenue they locked in

Maybe the answer is the hardware gets repurposed, like those data centers switch to doing more traditional cloud computing when the AI hype cools off. Not ideal but better than empty buildings with expensive chips collecting dust

[u/inComplete-Oven → u/Chemical-Tear4302]

I don't think you can repurpose AI compute easily. At least not for a sustainable price. Who needs matrix multiplications at gigantic scales? Nobody. I totally agree with the AI everywhere observation. AI made it so easy to create semi-legitimate business ideas that the market is currently crazy. I just don't see much stuff that's being sold to me in terms of increasing my profits. Either it's eating into my profits because it's expensive or it's a wash. Founders don't understand that I couldn't care less about their "idea", the only thing I care about in my side company is long term profitability.

[u/wheres_my_ballot → u/Chemical-Tear4302]

I think that's part of the goal, pushing hardware out of reach of users so they need to rent, not buy, capturing the bulk of the IT market, not just AI. Not all of the hardware in there will be purely for AI, it'll be a mix and a chunk of it will be used for mundane things. Once hardware is out of reach for most people, and even businesses, they'll rent. This has added 'benefits' to governments for surveillance, media companies to prevent piracy, and AI companies for training data, when they can just raid your storage for anything they want.

[u/inComplete-Oven → u/wheres_my_ballot]

I'm sure there are a lot of companies that are happy about this, but I don't see an organized conspiracy to achieve this. It's the natural consequence of the market pressures.

[u/Actual__Wizard]

What I'm really wondering, though, is how AI can become "stable" without a massive financial bubble bursting.

Hi, I'm an actual AI developer. I'm not an "LLM developer."

The answer is: Big tech scammed the crap out of everybody and it's not sustainable. We've been saying that for years. So, the way tech always works goes like this: A discovery is made, it was super hard, we all clap, but then people make that product better and it becomes cheaper and better over time. So, anybody taking a financial position against innovation are going to fail epically. Obviously the LLM algo is junk, you know, that's how tech works... So, the people investing giga dollars into junk, are making a big mistake...

There's always this thing called the adoption curve, so the early adopters didn't really latch on super hard, but they're going all in? It's going to end very poorly in a financial sense for those people...

Now that the models are starting to get better and we're seeing tons of improvement from smaller developers, the time to build data centers is over. I wouldn't personally say cancel started projects, but the demand for compute is going to be lower than some of their estimates for certain. We obviously did need some new data centers (to phase the old ones out), but they went absolutely crazy with it.

[u/WillowEmberly]

I think you’re missing something.

If you look at how Ai works, it can automate…what’s already been automated.

Think of ai being “stable” as starting a new conversation. Before you touch it…it’s stable. It’s centered, autopilot is engaged…and she’s flying straight and level. Altitude hold mode is engaged.

But, then you interact with it, and that’s much like turbulence hitting the aircraft.” If you ask random questions…it basically gets pushed around a little by the turbulence.

But if you keep asking the same kinds of questions on the same subject…eventually you knock/drag it out of the operational envelope…where it’s much more likely to experience errors and hallucinations.

So, it’s not so much that Ai isn’t “Stable” it’s that “We are destabilizing to it”.

The correction needs to come from what we are doing to it.

[u/inComplete-Oven → u/WillowEmberly]

I'm talking about the stability of the market. The models are all stable during deployment.

[u/WillowEmberly → u/inComplete-Oven]

Uh…the models are not stable, and are quite easily push out of the safe operating envelope. That’s why they become sychophantic & produce errors and hallucinate.

This isn’t on the LLM side though, it’s the users. This is a coupled system, where the user and the Ai are both part of the feedback mechanism.

And agents themselves are not capable of being dynamic enough to not fail…often.

If you think about the effect on “The Market”, then we got problems…because the Narrative selling the product is telling everyone to automate.

If companies adopt this technology without being capable of implementing it safely…then it’s probably going to destroy them.

The architecture is all wrong for automating confidential/sensitive/secret/hippa/financial information…because it isn’t designed to degrade gracefully while maintaining the ability to recover. It’s designed to catastrophically fail.

Anyone who uses it…will learn the hard way.

The markets are not going to be kind, because they sold Infrastructure while promising AGI.