Watching the Generative AI Hype Bubble Deflate
Watching the Generative AI Hype Bubble Deflate
So you're saying we wont have any crowdsourced blockchain Web 2.0 AIs?
I saved a lot of time due to ChatGPT. Need to sign up some of my pupils for a competition by uploading their data in a csv-File to some plattform? Just copy and paste their data into chsatgpt and prompt it to create the file. The boss (headmaster) wants some reasoning why I need some paid time for certain projects? Let ChatGPT do the reasoning. Need some exercises for one of my classes that doesn't really come to grips with while-loops? let ChatGPT create those exercises (some smartasses will of course have ChatGPT then solve those exercises). The list goes on...
Those pupils will really thank you when they grow up and there isn't enough fresh water because all the data centres are using it up far faster than it can be replenished.
https://utulsa.edu/news/data-centers-draining-resources-in-water-stressed-communities/
Yeah, and Wikipedia is one of the most useful sites on the net, but it didn't exactly result in the entire web becoming crowdsourced.
One time, I needed to convince my boss's boss that we needed to do something, and he wanted it in writing. Guess who wrote the proposal? And far more eloquently than I could have alone, in the time allowed. It required some good prompts, attentive proofreading, and a few drafts. But in the end, it was quite effective.
The poem about AI that often gets posted says "What are you trying to avoid? The living [of a life]?"
And yeah, that's what it's for, dodging shit you don't want to do. I gotta produce some useless bullshit that no one's going to read or care about: AI.
I don't even mind AI art for things like LinkedIn posts, blogs like "What is warehouse management?" or "Top 10 finance trends in 2025" - SEO spam that no human will read. No one wants to write it, read it, or care about it- its just a x kb file to tell Google to look here.
oh wow who would have guessed that business consultancy companies are generally built on top of bullshitting about things which you dont really have a grasp on
"Built to do my art and writing so I can do my laundry and dishes" -- Embodied agents is where the real value is. The chatbots are just fancy tech demos that folks started selling because people were buying.
Eh, my best coworker is an LLM. Full of shit, like the rest of them, but always available and willing to help out.
Though the image generators are actually good. The visual arts will never be the same after this
Compare it to the microwave. Is it good at something, yes. But if you shoot your fucking turkey in it at Thanksgiving and expect good results, you're ignorant of how it works. Most people are expecting language models to do shit that aren't meant to. Most of it isn't new technology but old tech that people slapped a label on as well. I wasn't playing Soul Caliber on the Dreamcast against AI openents... Yet now they are called AI opponents with no requirements to be different. GoldenEye on N64 was man VS AI. Madden 1995... AI. "Where did this AI boom come from!"
Marketing and mislabeling. Online classes, call it AI. Photo editors, call it AI.
There is this seeming need to discredit AI from some people that goes overboard. Some friends and family who have never really used LLMs outside of Google search feel compelled to tell me how bad it is.
But generative AIs are really good at tasks I wouldn't have imagined a computer doing just a few year ago. Even if they plateaued in place where they are right now it would lead to major shakeups in humanity's current workflow. It's not just hype.
The part that is over hyped is companies trying to jump the gun and wholesale replace workers with unproven AI substitutes. And of course the companies who try to shove AI where it doesn't really fit, like AI enabled fridges and toasters.
This is easy to say about the output of AIs.... if you don't check their work.
Alas, checking for accuracy these days seems to be considered old fogey stuff.
Computers have always been good at pattern recognition. This isn't new. LLM are not a type of actual AI. They are programs capable of recognizing patterns and Loosely reproducing them in semi randomized ways. The reason these so-called generative AI Solutions have trouble generating the right number of fingers. Is not only because they have no idea how many fingers a person is supposed to have. They have no idea what a finger is.
The same goes for code completion. They will just generate something that fills the pattern they're told to look for. It doesn't matter if it's right or wrong. Because they have no concept of what is right or wrong Beyond fitting the pattern. Not to mention that we've had code completion software for over a decade at this point. Llms do it less efficiently and less reliably. The only upside of them is that sometimes they can recognize and suggest a pattern that those programming the other coding helpers might have missed. Outside of that. Such as generating act like whole blocks of code or even entire programs. You can't even get an llm to reliably spit out a hello world program.
"It's part of the history of the field of artificial intelligence that every time somebody figured out how to make a computer do something—play good checkers, solve simple but relatively informal problems—there was a chorus of critics to say, 'that's not thinking'"
-Pamela McCorduck"AI is whatever hasn't been done yet."
- Larry TeslerThat's the curse of the AI Effect.
Nothing will ever be "an actual AI" until we cross the barrier to an actual human-like general artificial intelligence like Cortana from Halo, and even then people will claim it isn't actually intelligent.
See now, I would prefer AI in my toaster. It should be able to learn to adjust the cook time to what I want no matter what type of bread I put in it. Though is that realky AI? It could be. Same with my fridge. Learn what gets used and what doesn't. Then give my wife the numbers on that damn clear box of salad she buys at costco everytime, which take up a ton of space and always goes bad before she eats even 5% of it. These would be practical benefits to the crap that is day to day life. And far more impactful then search results I can't trust.
See now, I would prefer AI in my toaster.
You better believe that AI-powered toaster would only accept authorized bread from a bakery that paid top dollar to the company that makes them. To ensure the best quality possible and save you from inferior toast, of course.
There's a good point here that like about 80% of what we're calling AI right now... isn't even AI or even LLM. It's just.... algorithm, code, plain old math. I'm pretty sure someone is going to refer to a calculator as AI soon. "Wow, it knows math! Just like a person! Amazing technology!"
(That's putting aside the very question of whether LLMs should even qualify as AIs at all.)
The part that is over hyped is companies trying to jump the gun and wholesale replace workers with unproven AI substitutes. And of course the companies who try to shove AI where it doesn't really fit, like AI enabled fridges and toasters.
This is literally the hype. This is the hype that is dying and needs to die. Because generative AI is a tool with fairly specific uses. But it is being marketed by literally everyone who has it as General AI that can "DO ALL THE THINGS!" which it's not and never will be.
Even if they plateaued in place where they are right now it would lead to major shakeups in humanity's current workflow
Like which one? Because it's now 2 years we have chatGPT and already quite a lot of (good?) models. Which shakeup do you think is happening or going to happen?
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Thanks -- it has been clear enough that an another AI winter is coming. Likely latest when the Global Financial Crisis 2 is here.
A big issue that a lot of these tech companies seem to have is that they don't understand what people want; they come up with an idea and then shove it into everything. There are services that I have actively stopped using because they started cramming AI into things; for example I stopped dual-booting with Windows and became Linux-only.
AI is legitimately interesting technology which definitely has specialized use-cases, e.g. sorting large amounts of data, or optimizing strategies within highly restrained circumstances (like chess or go). However, 99% of what people are pushing with AI these days as a member of the general public just seems like garbage; bad art and bad translations and incorrect answers to questions.
I do not understand all the hype around AI. I can understand the danger; people who don't see that it's bad are using it in place of people who know how to do things. But in my teaching for example I've never had any issues with students cheating using ChatGPT; I semi-regularly run the problems I assign through ChatGPT and it gets enough of them wrong that I can't imagine any student would be inclined to use ChatGPT to cheat multiple times after their grade the first time comes in. (In this sense, it's actually impressive technology - we've had computers that can do advanced math highly accurately for a while, but we've finally developed one that's worse at math than the average undergrad in a gen-ed class!)
I've ran some college hw through 4o just to see and it's remarkably good at generating proofs for math and algorithms. Sometimes it's not quite right but usually on the right track to get started.
In some of the busier classes I'm almost certain students do this because my hw grades would be lower than the mean and my exam grades would be well above the mean.
The answer is that it's all about "growth". The fetishization of shareholders has reached its logical conclusion, and now the only value companies have is in growth. Not profit, not stability, not a reliable customer base or a product people will want. The only thing that matters is if you can make your share price increase faster than the interest on a bond (which is pretty high right now).
To make share price go up like that, you have to do one of two things; show that you're bringing in new customers, or show that you can make your existing customers pay more.
For the big tech companies, there are no new customers left. The whole planet is online. Everyone who wants to use their services is using their services. So they have to find new things to sell instead.
And that's what "AI" looked like it was going to be. LLMs burst onto the scene promising to replace entire industries, entire workforces. Huge new opportunities for growth. Lacking anything else, big tech went in HARD on this, throwing untold billions at partnerships, acquisitions, and infrastructure.
And now they have to show investors that it was worth it. Which means they have to produce metrics that show people are paying for, or might pay for, AI flavoured products. That's why they're shoving it into everything they can. If they put AI in notepad then they can claim that every time you open notepad you're "engaging" with one of their AI products. If they put Recall on your PC, every Windows user becomes an AI user. Google can now claim that every search is an AI interaction because of the bad summary that no one reads. The point is to show "engagement", "interest", which they can then use to promise that down the line huge piles of money will fall out of this pinata.
The hype is all artificial. They need to hype these products so that people will pay attention to them, because they need to keep pretending that their massive investments got them in on the ground floor of a trillion dollar industry, and weren't just them setting huge piles of money on fire.
I know I'm an enthusiast, but can I just say I'm excited about NotebookLLM? I think it will be great for documenting application development. Having a shared notebook that knows the environment and configuration and architecture and standards for an application and can answer specific questions about it could be really useful.
"AI Notepad" is really underselling it. I'm trying to load up massive Markdown documents to feed into NotebookLLM to try it out. I don't know if it'll work as well as I'm hoping because it takes time to put together enough information to be worthwhile in a format the AI can easily digest. But I'm hopeful.
That's not to take away from your point: the average person probably has little use for this, and wouldn't want to put in the effort to make it worthwhile. But spending way too much time obsessing about nerd things is my calling.
"Today’s hype will have lasting effects that constrain tomorrow’s possibilities."
Nope. No it won't. I'd love to have the patience to be more diplomatic but they're just wrong... and dumb.
I'm getting so sick of these anti AI cultists who seem to be made up of grumpy tech nerds behaving like "I was using AI before it was cool" hipsters and panicking artists and writers. Everyone needs to calm their tits right down. AI isn't going anywhere. It's giving creative and executive options to millions of people that just weren't there before.
We're in an adjustment phase right now and boundaries are being re-drawn around what constitutes creativity. My leading theory at the moment is that we'll all mostly eventually settle down to the idea that AI is just a tool. Once we're used to it and less starry eyed about it's output then individual creativity, possibly supported by AI tools, will flourish again. It's going to come down to the question of whether you prefer reading something cogitated, written, drawn or motion rendered by AI or you enjoy the perspective of a human being more. Both will be true in different scenarios I expect.
Honestly, I've had to nope out of quite a few forums and servers permanently now because all they do in there is circlejerk about the death of AI. Like this one theory that keeps popping up that image generating AI specifically is inevitably going to collapse in on itself and stop producing quality images. The reverse is so obviously true but they just don't want to see it. Otherwise smart people are just being so stubborn with this and it's, quite frankly, depressing to see.
Also, the tech nerds arguing that AI is just a fancy word and pixel regurgitating engine and that we'll never have an AGI are probably the same people that were really hoping Data would be classified as a sentient lifeform when Bruce Maddox wanted to dissassemble him in "The Measure of a Man".
How's that for whiplash?
Models are not improving, companies are still largely (massively) unprofitable, the tech has a very high environmental impact (and demand) and not a solid business case has been found so far (despite very large investments) after 2 years.
That AI isn't going anywhere is possible, but LLM-based tools might also simply follow crypto, VR, metaverses and the other tech "revolutions" that were just hyped and that ended nowhere. I can't say it will go one way or another, but I disagree with you about "adjustment period". I think generative AI is cool and fun, but it's a toy. If companies don't make money with it, they will eventually stop investing into it.
Also
Today’s hype will have lasting effects that constrain tomorrow’s possibilities
Is absolutely true. Wasting capital (human and economic) on something means that it won't be used for something else instead. This is especially true now that it's so hard to get investments for any other business. If all the money right now goes into AI, and IF this turns out to be just hype, we just collectively lost 2, 4, 10 years of research and investments on other areas (for example, environment protection). I am really curious about what makes you think that that sentence is false and stupid.
Models are not improving? Since when? Last week? Newer models have been scoring higher and higher in both objective and subjective blind tests consistently. This sounds like the kind of delusional anti-AI shit that the OP was talking about. I mean, holy shit, to try to pass off "models aren't improving" with a straight face.
It's fucking fantastic news, tbh.
Here's my take, let them dismiss it.
Let em! Remember Bitcoin at $15k after 2019?
Let em! And it's justified! If Ai isn't important right now, then why should its price be inflated to oblivion? Let it fall. Good! Lower prices for those of us that do see the value down the road.
That's how speculative investment works. In no way is this bad. Are sales bad? Sit back and enjoy the show.
Are sales bad?
Of AI products? By all available metrics, yes, sales for AI driven products are atrocious.
Even the biggest name in AI is desperately unprofitable. OpenAI has only succeeded in converting 3% of their free users to paid users. To put that on perspective, 40% of regular Spotify users are on premium plans.
And those paid plans don't even cover what it costs to run the service for those users. Currently OpenAI are intending to double their subscription costs over the next five years, and that still won't be enough to make their service profitable. And that's assuming that they don't lose subscribers over those increased costs. When their conversion rate at their current price is only 3%, there's not exactly an obvious appetite to pay more for the same thing.
And that's the headline name. The key driver of the industry. And the numbers are just as bad everywhere else you look, either terrible, or deliberately obfuscated (remember, these companies sank billions of capex into this; if sales were good they'd be talking very openly and clearly about just how good they are).
I have no idea how people can consider this to be a hype bubble especially after the o3 release. It smashed the ARC AGI benchmark on the performance front. It ranks as the 175th best competitive coder in the world on Codeforces' leaderboard.
o3 proved that it is possible to have at least an expert AGI if not a Virtuoso AGI (according to Deep mind's definition of AGI). Sure, it's not economical yet. But it will get there very soon (just like how the earlier GPTs were a lot dumber and took a lot more energy than the newer, smaller parameter models).
Please remember - fight to seize the means of production. Do not fight the means of production themselves.
Where, in that position piece, do they mention o3? Who "proved" this?
Additionally, I'm pretty sure that this "ARC AGI" benchmark is not using the same definition of AGI that you linked to by DeepMind. Conflating them is misleading. There is already so much misinformation out there about "AI", don't add to it.
Lastly, I struggle to take at face value essays written by for-profit companies claiming they have AGI (that DeepMind paper links to OpenAI essays). They only stand to gain monetarily by claiming that their AI is an AGI (to be clear, this is an opinion; I do not have evidence to suggest that OpenAI is being disingenuous).
It's a bubble because OpenAI spend $2.35 for every $1.00 they make. Yes, you're mathing right, that is a net loss.
It's a bubble because all of the big players in AI development agree that future models will cost exponentially more money to train, for incremental gains. That means there is no path forward that doesn't intensely amplify the unprofitability of an already deeply unprofitable industry.
It's a bubble because newer models with better capabilities only cost more and more to run.
It's a bubble because as far as anyone knows there will never be a solution to the hallucination problem.
It's a bubble because despite investments treating it as a trillion dollar industry, no one has yet figured out a trillion dollar problem that AI can solve.
You're trying on a new top of the line VR headset and saying "Wow, this is incredible, how can anyone say this is a bubble?" Its not about how cool the tech is in isolation, it's about its potential to effect widespread change. Facebook went in hard on VR, imagining a future where everyone worked from home while wearing VR headsets. But what they got was an expensive toy that only had niche uses.
AI performs do well on certain coding tasks because a lot of the individual problems that make up a particular piece of software have already been solved. It's standard practice to design programs as individual units, each of which performs the smallest task possible, and which can then be assembled to complete more complex tasks. This fits very well into the LLM model of assembling pieces into their most likely expected configurations. But it cannot create truly novel code, except by a kind of trial and error mutation process. It cannot problem solve. It cannot identify a users needs and come up with ideal solutions to them. It cannot innovate.
This means that, at best, genAI in the software world becomes a tool for producing individual code elements, guided and shepherded by experienced programmers. It does not replace the software industry, merely augments it, and it does so at a cost that many companies simply may not feel is worth paying.
And that's its best case scenario. In every other industry AI has been a spectacular failure. But it's being invested in as if it will be a technological reckoning for every form of intellectual labour on earth. That is the absolute definition of a bubble.
o3 made the high score on ARC through brute force, not by being good. To raise the score from 75% to 87% required 175 times more computing power, but exactly stunning returns.
Why does it matter?
If it can through brute force, it can do it. That's the first step towards true agi, nobody said the first AGI would be economical, this feels like a major goalpost shift if you're acknowledging it can do it at all, isn't that insane?
A little bit ago, everyone would've been saying this will never happen, that there was a natural wall simply because all it does is predict the next token, it's been like, a few years of llm's and they're already getting this insane. We're going to have AGI soon, it might not be a transformer, but billions upon billions of dollars are being thrown at this problem, there are people smart enough in the world to make this work, and this is the earliest sign that it's coming.
Unless we invent cold fusion between the next 5 years, they will never be economical. They are the most energy inefficient thing ever invented by humanity and all prediction models state that it will cost more energy, not less, to keep making them better. They will never be energy efficient nor economical in their current state, and most companies are out of ideas on how to shake it up. Even the people who created generative models agree that they have just been brute forcing by making the models larger with more energy consumption. When you try to make them smaller or more energy efficient, they fall off the performance cliff and only produce garbage. I'm sure there are researchers doing cool stuff, but it is neither economical nor efficient.
Untrue. There are small models that produce better output than the previous "flagships" like GPT-2. Also, you can achieve much more than we currently do with far less energy by working on novel, specialised hardware (neuromorphic computing).
Why is it getting an AGI stamp now? I was under the impression humanity has not delivered a sentient AI? Which is what the AGI title was supposed to be used for...has that been pulled back again?
Your example is strange because, as far as I know, GPTs aren't economical either.
But the line must go up!
The article does mention that when the AI bubble is going down, the big players will use the defunct AI infrastructure and add it to their cloud business to get more of the market that way and, in the end, make the line go up.
That's not what the article says.
They're arguing that AI hype is being used as a way of driving customers towards cloud infrastructure over on-prem. Once a company makes that choice, it's very hard to get them to go back.
They're not saying that AI infrastructure specifically can be repurposed, just that in general these companies will get some extra cloud business out of the situation.
AI infrastructure is highly specialized, and much like ASICs for the blockchain nonsense, will be somewhere between "very hard" and "impossible" to repurpose.
Big tech is out of ideas and needs AI to work in order to drive growth.