True story time. I was talking to a guy at $dayjob and he says he’s been talking with a third party company, whose solution we might buy. I asked him how the talks with them went and he said they were negotiating and I asked him how that was going.
He offhandedly said that he asked if and how they were using AI at all in their solution. I asked “Why did you ask about AI?”, since I was sort of curious what benefit he was looking for.
He said “Well, it’s not that I actually care about AI in their product, but if they don’t have any AI stuff, I can use that as leverage when negotiating the contract for a lower price.”
I was a bit astonished and he did kinda knowingly smile. He said “yea I know, I am part of the problem”. He also said “it’s also about taking a temperature on how ahead in technology the company is”.
I just wanted to share cause this is so insidious. Companies are asking each other about AI, despite the fact that (at least sometimes) nobody actually wants it! They are asking in order to use the lack of AI as leverage, which incentivizes companies to include AI in their offerings, not because it’s actually useful, but because it gives them leverage to raise prices!
This really makes AI seem more and more like a bubble.
The seems maybe very much like the .com boom and bust. Right?
.com boom and bust wasn’t established companies, it was tons of startups over flushed with cash who had no viable business models and the cash dried up.
this is far worse. the only light is that these massive data centers might make computing super cheap when the data is sold at rock bottom prices.
plenty of household names went down during dotcom, you don’t remember any of them because they went out of business, some of the ones that survived are only just now recovering to their dotcom-highs…
cough
IBM
cough
they’ve been a negative/stagnant growth company for over a decade…so consider what’s about to happen to their price again.
Except a thousand times worse when it pops. Not sure the stock market has ever been so heavily weighted to 7 companies and I’ve never known a single factor to account for so large a chunk of our GDP.
I think it may have been even larger but not by much.
The difference is the dot com bubble ended up with huge amounts of fibre infrastructure installed which was ultimately used (many years later).
This bubble will end up with huge data centres with obsolete GPUs which have massive water and power consumption burdens.
Funny enough, my first IT job was temp work doing Y2K updates at Williams Companies. They were Tulsa’s largest employer and were laying new fiber and lighting dark fiber. Never tied their sudden demise to to dotcom crash.
Still, I’d argue the AI bubble is a monster. 7 companies (Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla) are holding up the stock market, all deeply into AI. Nvidia straight crashes on this bubble and we all know Telsa is monstrously overvalued.
We Haven’t Seen This Level of Market Concentration Since the Great Depression
Yikes!