I thought for-profit companies were supposed to make a profit…
Well actually there is a long and rich history of companies that are able to operate at a loss using funds appropriated from sale of shares to investors, and this process continues so long as new investors keep buying in such that anybody selling out is covered by the new funds until enough people try to sell out that the price starts to plunge, although the collapse can be delayed by the company strategically buying back and occasionally splitting or reorganizing, meaning everyone gets their money back unless they sell too late.
You know.
A fucking Ponze Scheme.
Oh honey, that hasn’t been true since 2008.
The government will bail out companies that get too big to fail. So investors want to loan money to companies so that those companies become too big to fail, so that when those investors “collect on their debt with interest” the government pays them.
They funded Uber, which lost 33 billion dollars over the course of 7 years before ever turning a profit, but by driving taxi companies out of business and lobbying that public transit is unnecessary, they’re an unmissable part of society, so investors will get their dues.
They funded Elon Musk, whose companies are the primary means of communication between politicians and the public, a replacing NASA as the US government’s primary space launch provider for both civilian and military missions, and whose prestige got a bunch of governments to defund public transit to feed continued dependence on car companies. So investors will get their dues through military contracts and through being able to threaten politicians with a media blackout.
And so they fund AI, which they’re trying to have replace so many essential functions that society can’t run without it, and which muddies the waters of anonymous interaction to the point that people have no choice but to only rely on information that has been vetted by institutions - usually corporations like for-profit news.
The point of AI is not to make itself so desirable that people want to give AI companies money to have it in their life. The point of AI is to make people more dependent on AI and on other corporations that the AI company’s owners own.
Its a bubble
Billions in investment. Trillions in speculation. All on something that makes less money than Genshin Impact.
Fun times.
Is that why MSFT dumped like 3.5% today?
Lol
Good.
Fuck AI, send it directly to hell.
AI is here to stay. AI is also in an unsustainable bubble. Both things are true
It’s useful. It wastes a lot of my time with its stupid bullshit. Both are true. 😆
Dotcom mkII
Well, browser usage is kinda dying off in lieu of apps :(
Words do not compute. Issuing a $1T IPO to Sam Altman.
And that is probably only the beginning.
AI crash will be 11X bigger than subprime mortgage crash, also driven by mass stupidity.
The next movie will be titled: * The Big Shart*
This guys is jacked…jacked to the tits.
You too will soon be able to buy an abandoned datacenter for just $1,000.
Think of the gaming GPUs!
What’s the deal with the “HPE” in some Register articles? It’s apparently the Hewlett-Packard Enterprise logo, but articles about HPE don’t appear to have that logo.
Is The Register affiliated with HPE now?
The whole “AI” thing is one big grift.
I agree, and essentially they used slightly reworked old neural network technologies, increasing their power with the help of data centers.
Wow. Glad they just converted to a for profit entity! Can’t wait for them to unleash all this success on to the the general financial market.
Maybe, just maybe, the bubble started bursting now.
I wish. Even knowing it’s all a gigantic scam, they’ll first protect themselves before letting it burst and screw everybody else. The rich get a buffer period.
Is it really a scam when it creates content?
It may be slop to you, it may not be useful for everything they market it as.
But plenty of people find it useful, even if they use it for the wrong things.
It is not like cryptocurrency, which is only used by people who want to get rich from it.
But plenty of people find it useful
Plenty of people don’t properly wash their anuses too. Plenty of people think our planet is flat.
Is it really a scam when it creates content?
No one is claiming that it doesn’t output stuff. The scam lies in the air castles that these companies are selling to us. Ideas like how it’ll revolutionise the workplace, how it will cure cancer, and bring about some kind of utopia. Like Tesla’s full-self-driving, these ideas will never manifest.
We’re still at a stage where companies are throwing the slop at the wall to see what sticks, but for every mediocre success there’s a bunch of stories that indicate that it’s just costing money and bringing nothing to the table. At some point, the fascination for this novel-seeming technology will wear out, and that’s when the castle comes crashing down on us. At that point, the fat cats on top will have cashed out with what they can and us normal people will be forced to carry the consequences.
Exactly. Just like the dotcom bubble websites and web services aren’t the scam, the promise of it being some magical solution to everything is the scam.
It’s not that it’s not useful for the end customer. It’s more that investors are overpromised on the value and return from AI. There has been no returns yet, and consumers are finding less useful than these companies intended. The scam is for the investors, not the end user
I think it is that its not useful for the end customer. Every anecdote I’ve heard about LLMs helping someone with their work were heavily qualified with special cases and circumstances and narrow use cases, resulting in a description of a process that was made more complex by adding the LLM, which then helped them eliminate nearly as much complication and effort as it added. These are the stories from the believers.
Now add in the fact that almost nobody is on a paid service tier outside of work, and all the paid tiers are currently heavily subsidized. If it has questionable utility at today’s prices, the value will only decline from there as prices rise to cover the real costs to run these things.
creates content? Out of what? I dont deny that there are some use cases for ai that are good, but ultimately its all built on backs of people who have actually contributed to this world. If it was completely non-profit it would be more okay, but as it currently is ai is tool of exploitation and proof that law protects only the rich and binds only us.
ultimately its all built on backs of people who have actually contributed to this world
Being highly unethical doesn’t make it a scam.
scam is kind of oversaturated word nowdays
Is it really a scam when it creates content?
I create content in a ceramic bowl twice a day. Give me a billion.
The scam is that the business plan is not feasible. Hundreds of techs have died because some cool idea could never make real money.
And this is the finance model:
It’s a scam because the prices they’re charging right now don’t reflect the actual costs. AI companies are trying to get people and companies hooked on it so that once they crank the prices up by 10x to start turning a profit, they’ll be able to maintain some semblance of a customer base. If they were charging the real prices a year ago, the AI bubble would have never reached the levels it has, and these companies wouldn’t be worth what they are now. It’s all propped up on a lie.
Ah so the Uber business model then
I agree with you. Not as useful as tech-bros claim, but not as little as other people claim neither. Definitely not a trillion value thing, tho.
It’s like gambling the entire US economy on Clippy.
Would be nice, I want to buy some ETFs at a discount
This reminds me of something that came up recently. Copilot started hallicinating quite a bit more than usual in Copilot reviews. That made me think about the cost of operarion. As they burn money like this, I won’t be surprised if they start decreasing inference quality to decrease cost per user. Which also means people relying on certain model behaviour for tasks could get nasty surprises. Especially within automation workflows where model outputs aren’t being reviewed.
Copilot and Gemini are trash. They are driving away future business.
Github Copilot is somewhat useful for programming (or it feels useful when it cranks out some boring and routine code to my specs - not sure it actually saves me time though because I always review it all), but of course Microsoft have given a range of products all the same name for maximum confusion, as they do. The Copilot in Windows may be rubbish for all I know. I haven’t ever felt the need to press the button.
AI is funded solely by sunk cost fallacy at this point. I wonder how long it will be before investments start getting pulled back because of a lack of ROI. I can already feel the sentiment towards AI and it getting pushed in everything turning negative amongst consumers recently.
I wouldn’t have a problem if they were actually investing the money in something useful like R&D
Nearly all the investment is in data centers. Their approach for the past 2 years seems to be just throwing more hardware at existing approaches, which is a really great way to burn an absurd amount of money for little to nothing in return
AI is funded solely by sunk cost fallacy at this point.
and the us economy an gdp relies solely on ai make of that what you will.
Yeah, Trump will prop it up with tax dollars to prolong the inevitable. That’s the American way.
One of our biggest bookstores contracted with a local artist for some merch. That artist used AI with predictable results. Now everyone involved is getting raked over the coals for it.
No surprise, they just announced a 4th round of layoffs too. 😟
https://www.koin.com/news/portland/powells-layoffs-employees-10292025/
Why do you think AI is pushed so hard?
Everyone is aware this has to be useful. Too much money.
Still the powers that be will do everything to avoid a hard crash, which would be so much earned.
Investment is done really to train models for ever more miniscule gains. I feel like the current choices are enough to satisfy who is interested in such services, and what really is lacking is now more hardware dedicated to single user sessions to improve quality of output with the current models.
But I really want to see more development on offline services, as right now it is really done only by hobbyists and only occasionally large companies with a little dripfeed (Facebook Llama, original Deepseek model [latter being pretty much useless as no one has the hardware to run it]).
I remember seeing the Samsung Galaxy Fold 7 (“the first AI phone”, unironic cit.) presentation and listening to them talking about all the AI features instead of the real phone capabilities. “All of this is offline, right? A powerful smartphone… makes sense to have local models for tasks.” but it later became abundantly clear it was just repackaged always-online Gemini for the entire presentation on $2000 of hardware.
what really is lacking is now more hardware dedicated to single user sessions to improve quality of output with the current models
That is the exact opposite of my opinion. They’re throwing tons of computing at the current models. It has produced little improvement. The vast majority of investment is in compute hardware, rather than R&D. They need more R&D to improve the underlying models. More hardware isn’t going to get the significant gains we need
They’re investing this much because they honestly seem to think they’re on the cusp of super intelligent AGI. They’re not, but they really seem to think they are, and that seems to justify these insane investments.
But all they’re really doing is the same thing as before but even bigger. It’s not going to work. It’s only going to make things even more expensive.
I use Copilot and Claude at work, and while it’s really impressive at what it can do, it’s also really stupid and requires a lot of hand holding. It’s not on the brink of AGI super intelligence. Not even close. Maybe we’ll get there some day, but not before all these companies are bankrupt.
The dot com bubble 2.0 is on the horizon
I knew it was a bubble since Computex January 2024 when Derb8uer showed an “AI PC case”. He asked “What’s AI about this PC case?” and they replied that you could put an AI PC inside it.
You are talking more about the term here being used everywhere out of context.
I am talking about companies slapping “AI” on their products and systems and raising their value, in the same way that companies in the 90s slapped “dotcom” on their branding and raised their value.
The problem is there is little continuous cash flow for on prem personal services. Look at Samsung’s home automation, its nearly all online features and when the internet is out you are SOL.
To have your own Github Copilot in a device the size and power usage of a Raspberry Pi would be amazing. But then they won’t get subscriptions.
more development on offline services
There is absolutely massive development on open weight models that can be used offline/privately. Minimax M2, most recent one, has comparable benchmark scores to the private US megatech models at 1/12th the cost, and at higher token throughput. Qwen, GLM, deepseek have comparable models to M2, and have smaller models more easily used on very modest hardware.
Closed megatech datacenter AI strategy is partnership with US government/military for oppressive control of humanity. Spending 12x more per token while empowering big tech/US empire to steal from and oppress you is not worth a small fraction in benchmark/quality improvement.
I wonder how long it will be before investments start getting pulled back because of a lack of ROI.
Just wait for the next hot thing to come out
I’d love to see a revisit to METAverse. Lmao.
How many years did Uber go markiing a loss ? Amazon similarly.
this is not a bad analogy, but you are off by orders of magnitude
more importantly, both Uber and Amazon always had a path to profitability (Amazon specifically was already making tons of money on AWS long before the store front made money). AI has already been shown to not have a path to profitability; whatever little value companies around the world have been able to extract, cannot pay the cost of producing it.
think of it this way:
You produce a little car that can drive 2 people and some bags around, it costs you $1000 to make and you sell it for $3000 which a ton of people can afford… you have a path to profitability
I enter the market with a car that can carry 20 people, plus full on luggage for all and it moves twice as fast… but, in practice, I can only really move 3 people and often take them the wrong way, also the luggage was a complete lie and I can only allow passengers with their purses… also my car cost $50,000 to make so I would have to sell it for $70,000 and nobody would pay that when they could get 20 of your cars for less… also also, I promised the people making some parts of my car that would invest 7 kajillion on their companies somehow.
Which company would succeed? yours or mine?
Amazon didn’t make a profit, they didn’t lose 11Billion a quarter
is this $11,500,000,000 in real money or speculative money?
There is no difference anymore
Yes, lol.
You think it’s 11.5B worth of gold bars?
Catch yourself up on the discourse; you look like a fool.
You look like a blocked user.
