Comment Can you hear the sound of the AI bubble popping? (Score 2) 23
This is the beginning of the end for the AI bubble. And there's reasonable concern that may lead to recession if it's true the AI gold rush is what has been propping up economies in the face of all the other increasing political and economic turbulence.
AI is hitting a different wall than most people have been talking about. Before any AGI or "technological singularity", government is stepping in (for whatever motives/justifications) and restricting access.
New models can still come, but the most advanced will no longer be for the mass market. We're entering a new class-based regime where you have to be worthy to qualify for the most powerful new capabilities. And government is deciding who is worthy. So the new stuff will only be available to a privileged few.
To be fair, Anthropic and others (plus even OpenAI in the past) have been calling for society to create guardrails. They say the tech mega-corps have seemingly irresistible financial motives to rush AI forward with little regard for consequence. There are some compelling arguments there. And this is one initial answer to that wish. (Though perhaps authoritarian power is not the best answer.)
The bubble bursts because this is the end of massive releases for the most breathtakingly capable new LLM models. AI companies can no longer juice their investor appeal by throwing more $$$Billions at larger and larger models because now only a few can use them.
So investors will pull back. The gold rush ends and the "irrational exuberance" bubble pops. Investors will start to finally ask the questions they should have been about how supportable all these future contracts are for data centers, power, RAM, GPUs, etc. They can see the end of unlimited growh for AI. And the sell-off of companies without convincing answers will start.
Eventually, like in the DotCom bust, the underlying real value will remain and rise again after the downturn. But there's likely some hurt between here and there.