alt Hacker News> If the whole AI bubble spectularly collapes
Every other news for the past month has been about lacking capacity. Everyone is having scaling issues with more demand than they can cover. Anthropic has been struggling for a few months, especially visible when EU tz is still up and US east coast comes online. Everything grinds to a halt. MS has been pausing new subscriptions for gh Copilot, also because a lack of capacity. And yet people are still on bubble this, collapse that? I don't get it. Is it becoming a meme? Are people seriously seeing something I don't? For the past 3 years models have kept on improving, capabilities have gone from toy to actually working, and there's no sign of stopping. It's weird.
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There's a massive amount of demand at the current price point, this does not exclude a bubble considering that the current cost to consumers is lower than what capacity expansion costs.
Though nowadays it feels like the bubble is going to end up being mainly an OpenAI issue. The others are at least vaguely trying to balance expansion with revenue, without counting on inventing a computer god.
Is the internet bigger or smaller than it was in 1998 compared to today?
Demand for internet and web services is significantly higher today than in 2000 but a bubble still popped. Heck a regular old recession or depression, completely unrelated to AI could happen next year and could collapse the industry. I mean housing is more expensive than ever nearly 20 years after collapsing in the Great Recession.
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Both are possible; increasing demand and bubble collapse.
The way this could happen is if model commoditization increases - e.g. some AI labs keep publishing large open models that increasingly close the gap to the closed frontier models.
Also, if consumer hardware keep getting better and models get so good that most people can get most of their usage satisfied by smaller models running on their laptop, they won't pay a ton for large frontier models.