Ask Lemmy

I think part of the process is going to be the enshittification of AI services. (Temporary, until the technology for sustainable infrastructure catches up.) Tokens will cost a premium, and a lot of businesses that depend on AI will turn to China's cheaper offerings.

Hobbyists will turn more to home-grown AI systems.

In recent news, Chinese AI is catching up to Anthropic. It'll be interesting if the Trump administration tries to block the Chinese AI offerings in order to bolster US ones. Trump and the AI tech bros are familiar bedfellows after all.

After the bubble pops how much would our lives be impacted?

A bunch of pensions will lose a lot of money. The billionaires will know when it's the right time to short it, and so they'll get wealthier.

Would AI vanish or still be there?

Higher end models like Mythos will still exist but be too expensive for most people to use. Lower end models will still exist. People will start developing actual tools focused on specific tasks using LLM algorithms instead of AGI. Companies will be able to buy LLM appliances they can put into their server rooms that will help with data analysis which doesn't require sharing data which will be more useful for use with information they want to keep private.

Eventually people will have PCs, then laptops, then phones with chips optimized for LLM algorithms which don't require sharing private information with a data center. It won't be AGI, but it will be able to automate things on the computer and help with stuff like helping with grammar. People will be able to say something "computer, bring up the financial report from last week" and it'll be able to do that. But it's not going to be an AGI thing, just be able to find the correct program, files, etc. based on some simple cues.

How exactly do you think the bubble will pop? Will AI companies simply run out of money? Or will it be because of the environmental effects?

Similar to how the dot com bubble popped. Some chatter from billionaires about getting out results in them all shorting it at the same time, the share values collapse, but they make a bunch of money.

Will AI companies simply run out of money?

Yes, when they've gotten the last investment dollar, the billionaires will know it's peaked which will result in a big short.

Or will it be because of the environmental effects?

They don't care about environmental effects LOL.

When do you think the “pop” will take place?

You need to be invited to whatever is the present day equivalent of Epstein Island to know that.

After the bubble pops, in future there will be companies/people who will try the AI thing again? What will that be like?

Yup. We didn't stop using the internet after the dot com bubble burst. It's just the financials of it wasn't insane anymore. LLMs can't do everything, but it's an algorithm that's useful in some scenarios. It will still be useful in those scenarios, but people will stop being weirdos thinking that it'll be able to do everything. It's an algorithm, there's a cost for the hardware and power to run it, in many cases it won't work at all, in many cases it'll work but be cost prohibitive, and then in a few cases it will be actually useful and cost effective. We'll move to using it for only the latter case.

Over time, it will get better and be used for more things, some of the things they're promising now may become a reality in a few decades. Kinda like the ridiculous idea to sell dog food on the internet during the dot com bubble. It was ridiculous then, but eventually the logistics caught up and more than a decade after the dot com bubble you could indeed buy dog food on the internet. I imagine it will be like that with AI. Eventually some (though not all) of the things they say you'll be able to do in six months may actually happen... 15 years from now. But it will probably be enshittified and suck more than you imagined it would be.

You'll be able to buy LLM hardware (video cards and RAM) for cents on the dollar as companies fail. The NASDAQ will drop a bit, the number of LLMs will reduce

Better than the GFC where all we got was Enron corporate branding and expensive houses

Comparable to dot com where loads of nerds bought $5 servers

like this. it won't go away. it will oscillate and then stabilize

Our 401k will go down a bit, a bit of money will be transferred from retail investors to the big players, the rich will get richer and the poor will get poorer. You won’t see so many ads for dumb AI services that literally no one wants. The big players will be fine, maybe, maybe, a few data centers shut down, but most of them don’t.

The industry will end up with one or two winners and a lot of losers. Very hard to predict these things (smart money in 1997 was that Apple was about to file bankruptcy). One or two companies will have success and the rest will evaporate or be absorbed. Then the AI product itself will be priced up (and dumbed down) significantly.

AI will not go away, but will be far more limited and specialized. The day of free general access to powerful chatbots will be up.

Anybody thinking AI goes away is just wishfully thinking, and/or ignorant.

I think it will be triggered by the massive overvaluation of many AI labs. Investors will sell. In the meanwhile, other sectors will still have to adjust to the new reality of token generators, so the wider economy is impacted.

LLMs will not disappear, just like real estate did not disappear after 2008,and the internet did not disappear after the dotcom bubble burst.

But I can imagine the end of hyperfocus on the "AGI race".

The AI bubble will pop the same way the dotcom bubble popped. A lot of money lost and the hype will die down, but the technology will remain and reach a homeostasis at the level where it's actually a helpful tool.

When the dotcom bubble popped the internet didn't disappear, it just became what it was supposed to be. When the AI bubble pops the technology will still be there for use cases where it's actually appropriate and useful.

GenAI is here to stay in one form or another, with long term impacts.

I wager the bubble will pop when OpenAI finally admits they have no path to making good on their purchasing commitments. They aren't the whole bubble and Altman has made what should be obviously the worst financial moves, however the broader market will be more bearish on anything they vaguely think to be OpenAI like.

I suspect it'll be with a year from now, based on what I've read.

The companies will never stop doing the GenAI things, but they may be less utterly obnoxious about it. I suspect Google and Anthropic have the highest chances of enduring a pop, anthropic for being well regarded in the field and Google because they get to make most phones go to them automatically whether requested or not.

I think GenAI will persist in obnoxious ways, but at least more bearable without folks desperately needing it to be adopted for the sake of their wealth.

Internet was the "AI" of the dotcom bubble. It didn't go anywhere after the bubble burst and neither will AI. What will go away are the companies with only hype but no product. Amazon and eBay came about during the dotcom bubble and now companies like OpenAI and Anthropic will likely be equivalent ones.

The bubble bursts when investors start losing faith that the company they have invested into will become profitable so they pull out, which makes other investors get scared so they pull out too and then the company goes under.

Considering from where the bubble grows, my wisest guess as to when it will start showing cracks (and I'm not very wise, by the way) would be Republicans doing bad at next elections.

As of now it seems that any losses from AI industry would simply be tanked (Nvidia's capitalization, for example, still ain't a joke, they've got a lot of money to burn) or socialized. Little bits of regulations or opposition to socializing of losses may actually move the loss needle beyond pain point, where we can hope for panic to ensue.

If bubble pops - AI is here to stay anyway. Chinese have shown with their DeepSeek that you can run decent sized models locally, and the main gatekeeper of local AI is, you guessed it, Nvidia. Prices for server GPU's are disproportionately high and one of the reasons is to not allow plebs like us to have that. But with further optimization of AI models they'll become more and more accessible on hardware consumers already have.

My second guess of when though would be investors getting tired of AGI promises as it is AGI that has to magically turn money pit of AI into unprecedented profits.

I think the AI bubble will pop when another part of the economy needs capital, sucking up the capital going to AI.

AI burning money for market share isn't new to Wall Street, that's been tech for the past generation. The issue is going to be liquidity to not test these valuations. Once they are tested, they are going to collapse.

Dogs and cats living together etc.

Social media companies will fill the gaps, continuing to spread their toxicity through society unchecked. The Pied Piper of Hamelin is starting to look more like a cautionary tale.

One change for me is celebrating on the anniversary of an AI company shutting down.

Big tech will keep their AI. Like others here have said, AI companies without another income stream will go belly up.

Some data centers will be sold and repurposed. Others will sell off their hardware to the consumer market.

Lower temperatures and less noise near the former data centers.

I don't see property values going back to where they were unless a data center is dismantled and the water table recovers.

Probably:

• GenAI continues to be used for marketing, and anything else where form matters more than substance
• anything where meaning is really critical might still use it, but will require solid oversight/governance. Software, research, medicine, teaching, etc.

Maybe:

• AI bubble bursts, with ripple effects into the broader economy, particularly in the US. This will be a huge problem if big banks are heavily leveraged for their AI investments (not sure this is the case, but it seems likely). If this happens, the collapse will be much worse than the GFC, perhaps worse than the great depression.
• Political spillover.. No idea what this will look like, but it's a big trigger...