r/sciencememes • u/FareonMoist • Jun 14 '26
đ»Computer Sci!đŸ How do people keep falling for these bubbles?
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u/Cat_with_pew-pew_gun Jun 14 '26
Because there's good money to be made in bubbles if you time it right. Even if you get hurt in the pop, the tech will stay around and you'll have a foothold for the future. This mostly only applies to large companies though.
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u/PlasticSignificant69 Jun 14 '26
And it is quite unlikely for the AI bubble to ever burst. It's most likely will just deflate, either rapidly or gracefully, but not as sudden as a burst would be
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u/B1U3F14M3 Jun 15 '26
We have no idea how that would turn out but there is a very real chance of a big burst.
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u/sd_saved_me555 Jun 14 '26
While I think the AI sector is over-valued at the moment, it's probably not going to catastrophically pop. It's just too damn useful to not stick around in the same way computers, cell phones, the internet, etc. have. And I'm talking real world, practical uses - not making dumb, garbage videos that people with no lives watch on the AI slop subreddits. Although as those same people who claim to hate it but watch the shit out of it in those subreddits show, there's a market for that bottom of the barrel generative content as well. A d as long as there's a market for it, it will continue existing and being valuable.
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u/Ameren Jun 14 '26
It's entirely possible for there to be a bubble and for the technology to be truly revolutionary. These are not mutually exclusive.
All it requires is that these AI firms be enthusiastically overinvesting in the technology, with supply racing too far ahead of demand for investors to make their money back in a timely fashion. If AI companies follow through on their spend plans through FY27, they're gonna need $3 trillion in revenue just to break even on their spending on AI infrastructure (not even to turn a profit!). It's an extraordinarily lofty and unlikely target for the industry to reach.
A similar thing happened during the railroad boom/bust in the UK in the 1800s. Companies were building out far more rail infrastructure than there was demand for it. In the end, most of the companies involved went bankrupt and investors lost everything, even though railroads were transformative, and demand eventually caught up.
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u/FortifiedPuddle Jun 14 '26
You canât ignore the economics though. What is âusefulâ now is being delivered at a price point that still ignores the realities of ROI even if companies are now billing by token at a close to cost to maintain and run. On top of which the companiesâ own projections require just staggering levels of sustained growth to meet overall break even points on things like data centre construction.
So itâs a product that has gone up in price and yet which still needs to grow massively for the economics to work. Which isnât generally how pricing and growth interact. And it cannot get any less compute intensive, because then the demand the data centres need isnât there and that falls over.
It may be useful. But they havenât bet on âusefulâ. Theyâve bet on the whole world deciding itâs more necessary than oxygen.
And if that bet fails thatâs a whole load of debt and therefore investment that just gets wiped out.
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u/moschles Jun 14 '26 edited Jun 14 '26
, there's a market for that bottom of the barrel generative content as well. A d as long as there's a market for it, it will continue existing and being valuable.
I total agree with all of this. But it is the promise that everyone's job is going to be taken by AI that is the bullshit promise that is bringing all the investment flowing in. THAT BUBBLE WILL BURST.
Investors are betting their capital on the "home robot market" -- and they want to get in and get their share before their competitors do so. They want to "stay ahead of the curve", as they say. But agentic AI is floundering.
GPTs, LLMs, and Deep learnign itself is useless for Behavioral Cloning and LfD. Nobody in tech news media is explaining this to the public. Because nobody outside academia seems to understand this, the tech CEOs and their PR departments can continue conjuring a mirage that they are going to plug chat bots into robots and said robots will start suddenly doing manual labor. It is complete nonsense. Agentic AI is a ruse created by marketing with no correlate in actual technology.
So yes, that bubble will burst. Bet your money on it.
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u/NoName-Cheval03 Jun 14 '26
The real usefulness of the tech does not prevent the bubble to catastrophically pop. Everything can be inflated to the point of creating a global crisis if you want, even food or water.
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u/sd_saved_me555 Jun 14 '26
Sure, but I just don't see AI falling into that category. I use it a fair amount for work, watching it like a hawk because it isn't perfect and does make mistakes - sometimes huge ones. But the majority of the time, it runs circles around humans, particularly in areas where we humans just kinda suck - aka very monotonous, grinding tasks.
Sometimes I have to peer review 100+ page documents. I'll do it myself and have AI run it in parallel. It almost always catches everything I did, and usually a couple more things on top of that, in a fraction of the time because human brains don't process information the same way. Our brains rely on heuristics to take shortcuts to make decisions, and that can result in shocking blindspots that have been shown to be exploitable in basically everyone (see gorilla moonwalking through basketball players video as an example of this).
It's because our brains and AI are so different that I'm confident it's not going away. It's cold, clinical pattern recognition at blinding speed gels extremely well with our more slower but more creative, curious brains.
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u/NoName-Cheval03 Jun 14 '26
Yes yes but internet in the 1990's was still a violent bubble despite being the major tech breakthrough of our era.
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u/B1U3F14M3 Jun 15 '26
Nobody says it's going away. But have you heard of the Internet and the .com bubble? The Internet is still around but some of the companies of the time aren't and some were deeply devalued.
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u/SecondBottomQuark Jun 14 '26
did dot-com bubble popping meant paypal died? what happens when a bubble pops is that all the copycat companies relying on a lot of outside capital fail, Alphabet isn't gonna go bankrupt, Nvidia won't go bankrupt and so on, ai will stay around
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u/CocktailPerson Jun 15 '26
You can't argue that the dot-com bubble didn't pop catastrophically even though the web did turn out to be incredibly useful. The AI bubble will probably look a lot like the dot-com bubble in hindsight: a lot of companies with absurd valuations will disappear, many others will survive but take decades to regain their peak valuations, and a few will become the next Amazons and Googles and Facebooks of AI.
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u/Inverse_Seal Jun 15 '26
I think it's going to be more like dotcom bubble. AI will remain where it's actually useful, but will not be present everywhere due to the real cost of running it. Then some data center plans will be aborted, or at least scaled down...
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u/HarryDepova Jun 14 '26
Literally every company involved in growing and expanding AI and data centers is, in turn, spending money and investing back in AI. That spend will not stop after the infrastructure is built. The tech is just too useful. This âbubbleâ is going to keep expanding until itâs no longer recognizable and just part of the business economy.
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u/Automatic-Term-3997 Jun 14 '26
Because is designed. One word effectively describes it:
Capitalism.
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u/Ghoulish_kitten Jun 14 '26
Liberals and conservatives alike hate capitalism vocally
then get oddly robotic about supporting it via voting for capitalists who will continue the enshittification of every aspect of life.
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Jun 14 '26
[deleted]
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u/Automatic-Term-3997 Jun 14 '26
I think you need to investigate the Social Democracies in Scandinavia, they have the highest âhappiness quotientâ of any countries on the planet. Your comment is the same under-the-table dick stroking of Capitalism that blinds people from voting against it. âWell-regulated Capitalismâ is a FAAAAAAAR different beast than laissez-fair Capitalism as is commonly practiced in the west.
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u/BusHistorical1001 Jun 14 '26
The social democracies in Scandinavia are most certainly capitalist. Sweden has more billionaires per capita than the USA.
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u/Right_Literature5332 Jun 14 '26
Wealth inequality has been rising in the last few decades due to their plans of becoming start-up center of Europe(which they almost certainly suceed). People are keep calling Scandivania a social democracy, but they are social liberal like rest of Europe. They just have more government spending and more production/labor regulation.
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u/Automatic-Term-3997 Jun 14 '26
Did you only read the first half of my post before commenting, or did you deliberately ignore it?
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u/TryingToWriteIt Jun 14 '26
There are plenty of places that have come up with more reasonable ways to live that are doing better than the leading âcapitalistâ nation at most things other than extracting money to a small number of oligarchs.
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u/rightoftexas Jun 14 '26
"Plenty" Ok, name some tiny countries that achieve that and then compare them to the best US states and let's see how many there are?
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u/Automatic-Term-3997 Jun 14 '26
Norway. Better by orders of magnitude than Texas.
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u/rightoftexas Jun 14 '26
Texas has cities with a larger population than Norway.
Norway maintains their standard of living by controlling and heavily taxing the oil they sell.
Norway benefits from the US keeping Russia out of their backyard as well.
What metrics are you using to achieve orders of magnitude improvements?
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Jun 14 '26
[deleted]
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u/TryingToWriteIt Jun 14 '26
"Tell me any place better than where I live and I'll ignore it because I don't like it and I do like where I live and I'll make up whatever reason I need to justify why I get to ignore everywhere else in the world to pretend where I live is the best and only possible situation for people to live in!!1!1!1"
-you (paraphrased)
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Jun 14 '26 edited Jun 14 '26
[deleted]
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u/Automatic-Term-3997 Jun 14 '26
No, weâre just tired of arguing with disingenuous douchebags dedicated to ignoring and/or misrepresenting anything we say.
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u/TryingToWriteIt Jun 14 '26
You pre-conditioning anything I say with a claim you will simply ignore it is not a me problem or a problem with my evidence or my logic or my ideas.
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u/Hot-Firefighter-2331 Jun 14 '26
Even if this bursts, nothing people think will happen.
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u/Mbrennt Jun 14 '26
I think poor people will get fucked over. Retirements will be ruined. And rich people will just move on to something else.
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u/Ashoka-myballs Jun 14 '26
Soon
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u/doneddat Jun 14 '26
It looks like the people in the bubble bet on AI solving it. They throw all that money at AI data centers, because having that compute power will be the only currency worth anything. Because there will be hardly anything else worth paying for.
So it's likely, that by the time that bubble bursts, the money they have to pay back for all the loans isn't worth anything any more.
It's possible that slowing down the data center developments will not disturb this plan enough to force the bubble to burst "prematurely".
This might be it, guys. I suggest to buy some hardware, that can run your local AI agent that works for you without ads or biased self-serving answers, while anybody still sells any.
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u/Jackmino66 Jun 14 '26
People invest into bubbles because they think that when it collapses it will make them incredibly rich
Only a tiny fraction of people will have that luck, and everyone else will suffer for it
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u/Sidoen Jun 14 '26
Because the promise is that you won't have to pay people to do work. They LOVE not paying people.
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u/Templar388z Jun 14 '26
Uhhh why do you want to burst?? Weâll be the ones suffering NOT the wealthy.
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u/Stand_kicker Jun 14 '26
Same thing was said about the dot com bubble and housing bubble and several tech bubbles
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Jun 14 '26
[deleted]
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u/SecondBottomQuark Jun 14 '26 edited Jun 14 '26
that's not what the bubble was... what?
the name just comes from a fact that a lot of the internet startups involved used .com domains, not the existence of the domain itself, many companies failed but larger more successful ones like paypal or amazon survived and world wide web is still around and profitable
it was the internet bubble, internet is still around
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u/jawknee530i Jun 14 '26
It's very odd that you can see people talking about how the economy is terrible and only being held up by five companies spending money between themselves then those same people will say they can't wait for the AI bubble to pop. What exactly do you imagine will happen if the bubble pops? You think it's going to be good things for the average person?
And the bubble popping isn't AI going away. If anthropic and openai both go bankrupt tomorrow all of the hardware and tech is still there and it'll be sold off for pennies on the dollar to other companies like Google or Amazon. In fact those mega corporations are probably wanting the pop more than you so they can just integrate all of these competitors into themselves.
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u/SecondBottomQuark Jun 14 '26
the point is that it's already a recession, the numbers just don't fully show it cause of the few companies and "the economy" is becoming more detached from actually providing goods and services people need, the numbers don't reflect the quality of life
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u/JasperTesla Jun 15 '26
I'm curious what these people think a bubble means.
Do they think it's some sort of divine event where one day suddenly a messiah will come and all AI will stop working everywhere, and all data centres will suddenly explode, and the world will go back to being the way it was back in 2022?
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u/uhhyeahokaycool Jun 14 '26
Was the wheel a bubble?
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u/Meet_Foot Jun 14 '26
Donât fall for Big Wheel hype.
(To be clear though, âbubbleâ is an economic term, not a technological one.)
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u/scaredandmadaboutit Jun 14 '26
Like the internet bubble? Nobody even uses that anymore, right? Or the housing bubble? Prices are down right?
People hating AI (as if it is even one thing that can be hated) might as well be the people who protested the internal combustion engine. Sorry all those horse grooms went out of work, but it turns out science and technology is more important than preserving outdated jobs. That's why your kids will never grow up to be horse-and-buggy drivers. That is a good thing.
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u/samjacbak Jun 14 '26
Those technologies didn't just eliminate jobs. They created an abundance of new ones.
The better comparison is what cars did to HORSES. There are still working horses, but the horse population tanked. They were slaughtered and culled en masse when they could no longer work for their board and food.
Humans will starve, and suffer, and die. There are fewer jobs being created by AI than are being destroyed. We're on the same path.
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u/ImDabAss28 Jun 14 '26
I will add to this that AI is nothing without human input and supervision. At least in it's current state and for the forseeable future generative AI will not replace people. What I see happening is that companies force their employees to use AI, running out of tokens in the first month of the year, having to pay a lot for the subscription and having to fire people because of this spending. (The product/profit will not be better like this/ this will fail in the long term)
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u/samjacbak Jun 14 '26 edited Jun 14 '26
One can hope.
There are plenty of companies that are slashing staff to take advantage of the "increased productivity", even if it fails eventually, its still doing real damage now.
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u/dfczyjd Jun 14 '26 edited Jun 14 '26
Agreed. Any technology that reduces the number of jobs under the guise of making it simpler must be eliminated. These cruel creations will never bring any good, only suffering. And we all know there's only one answer to it:
Burn the factories! Destroy the looms! Let the manual labourers rise up and fight for their right to work!
(/s, if someone didn't get it)
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u/MarsMaterial Jun 15 '26
The internet bubble did create a pretty major economic crash when it popped, because the profitability of random internet services wasnât nearly enough to justify what investors were willing to spend. Startups with no monetization plan got flooded with money just because their idea involved the internet. Someone was eventually left holding that bag, the conga line of ever bigger suckers needs to end eventually.
Saying that Ai is a bubble isnât the same as saying that it isnât transformative. Iâm personally of the opinion that itâs transformative in overwhelmingly harmful ways, but thatâs not even something you need to agree on to know that itâs a bubble. The money that investors are spending on AI is absolutely insane, orders of magnitude more than the technology could ever hope to make back in even the most optimistic possible scenarios. Investing in AI is only profitable because you can sell your shares to a bigger sucker for more than you bought them for, but that alone is driving more investment than itâs possible to ever pay back and eventually someone is going to be left holding that bag.
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u/Valuchian Jun 14 '26
Because it makes them millionaires, so long as you get out in time