That’s such an Enron thing to say.
I bet Enron also claimed it wasn’t Enron.
The irony that nVidia just shifted the narrative from “not enough chips” to “not enough energy” is insane.
They are going to do a lot more damage then Enron when their bubble pops.
EDIT: LOL, found the techbro.
What if it’s not a bubble?
So I tried using some AI chatbots to find a movie recently, it made up a few, none being the answer.
(The question was about a historical movie, made in perhaps 1970s by the feeling, set someplace in southern France somewhere around 1650s, has a few beautiful views of nature and castles ; one scene where a guard captain enters a room, asks a question, as a power gesture drinks a glass of wine on the table and a minute later falls ; another scene where for whatever reason a rapier fight happens in something like a tavern, two women in pastel dresses are descending by an open ladder from the second floor, seeing the brawl take our pocket pistols, one of them is stabbed with a rapier ; another scene where a guy is getting questioned with his feet over the fire ; another when another guy is climbing a tower clinging at brick mortars outside and hears guards’ boots on the ladder very loudly ; when I was a kid and saw that, someone said it’s an adaptation of something by Lope de Vega, but I’m not sure that’s correct ; that’s just in case someone reading this knows such a movie.)
But some googling sessions they do optimize, without you the user ever having to browse a webpage, and just getting a textual answer. That’s a valid use.
And some other processes. They don’t have to be useful for all things they are applied to, just some profitable.
Being a bubble does not mean the service they provide is useless. It means that the service is never generating enough profit to repay for the huge cost of providing it.
Would you pay 500 dollars a month to have the possibility to do your movie searches? Or alternatively, would you like your LLM of choice to counter that, having read all your emails and browser history, you are probably interested in a totally different movie that just happens to be playing now at a nearby cinema?
Because these AI companies are currently burning through literally a good chunk of all the cash in the world and they will eventually need to make even more gigantic profits to repay that cash. And the only one that is currently making money from AI seems to be NVIDIA, by selling the hardware that powers the AI giants.
I’m not saying that it IS all a bubble, by the way, as I can’t read the future and these gigantic profits might well materialize in the future. I’m just saying that “bubble” and “useless” are different.
Would you pay 500 dollars a month to have the possibility to do your movie searches? Or alternatively, would you like your LLM of choice to counter that, having read all your emails and browser history, you are probably interested in a totally different movie that just happens to be playing now at a nearby cinema?
There might be a more direct parallel than originally intended in this with the explanation how one person works hard all day and makes less than another person who pushes a few buttons. The latter knows which buttons to push.
This technology is useless for my movie searches, but it might be useful in the same way as radar was for air defense.
BTW, I’m not sure what I’d choose if offered to pay 500 dollars for knowing what that movie is. There’s one girl, if she’d be interested too to find that movie, perhaps I would.
So if such an expensive technology would allow this kind of nuanced search, and more seemingly efficient wouldn’t, then we have a use case.
Or a model allowing to predict actions of other people sufficiently well, based on seemingly not precise enough data. However much it would cost, that would be justified, similarly to high-frequency trading, because it would operate on all existing value, not just what it generates.
I’m not saying that it IS all a bubble, by the way, as I can’t read the future and these gigantic profits might well materialize in the future. I’m just saying that “bubble” and “useless” are different.
I know, I was making two points, one is that everything is relative (what you’ve just agreed to), another is that it might not at all be a bubble.
On the air defence note, specialist systems are already amazing at tasks like this and can usually run fine on high end consumer tier hardware (up to a single server rack) rather than data centres with the power requirements of small countries. AI is here to stay but LLMs are absoloutely a bubble.
Open AI has announced over $1trillion dollars in infrastructure spending. I think you’ll find near on everyone agrees it’s a bubble, just not agreeable how big or the timeline of the burst.
Well, one can say then also that US military is a bubble, it also hogs resources far bigger for the same results that poorer nations achieve. There are some things it does that can’t be compared to others because nobody has the need or that much money, but what can be compared is not even factor 10+.
It keeps getting that funding because of the position in the world it occupies.
Or one can say that the Danish kingdom sitting on the Sound relying on custom fees for its budget and then going on adventures with mercenary troops was a bubble. That bubble was inflated and burst a few times before that happened finally (something-something Kiel canal), and for long enough periods of history that just was the reality.
It’s a relative thing if something is sustainable or not. When people are talking about Earth being expected to exist for enough time to be more afraid of global warming and microplastics and such, it means that Earth’s existence itself is usually assumed to be indefinitely sustainable in our frame of evaluation.
So what you said is true, but dotcoms also were a bubble.
It’s a relative thing if something is sustainable or not. When people are talking about Earth being expected to exist for enough time to be more afraid of global warming…
Global warming is already having impacts on marine life, weather patterns etc. I’m not quite sure if I understand your point here.
So what you said is true, but dotcoms also were a bubble.
Yes they were, and a lot of money was lost. Much like AI. Many companies are pumping atronomical amounts of money into AI. They won’t all succeed. There will be a significant loss of capital. AI will definitely stay in this world, but to what degree is the question… enough to warrant over half the GDP of Australia being spent in a year by one company? Probably not.
Nvidia definitely isn’t Enron. It’s all of Nvidia’s customers that are mini-Enrons.
Enron crashed because they were cooking their books and faking income, declaring potential profit where none existed.
That’s not Nvidia. Nvidia is selling actual product as fast as they can make it at whatever price they want to charge.
Nvidia’s customers, on the other hand, are the ones who have to justify buying billions of dollars of product from Nvidia and explaining how they plan to make a profit from that.
Enron crashed because they were cooking their books and faking income, declaring potential profit where none existed
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Sell chips to X
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Receive stock in X
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Value of stocks = discounted sum of future (fake) income
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Booked as an asset on the balance sheet
This is exactly like Enron but the underlying commodity isn’t energy, it’s compute.
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You can do everything right and still have the curse of investor overconfidence placed on you.
Huang has been complaining for some time that doing well doesn’t result in stock gains, but the actual problem is the stock price is way too high so doing well does nothing for investor expectations.
This is when you sell shares because they no longer have any upside potential.
It sucks for companies though, but the fact is nvidia is overvalued at a 4.5T market cap.
In some ways the victim of their own success, that’s just the way this system is built, for better or worse (mostly worse). The incentives drive the behaviour, but the architecture is hostile in nature, so it’s hard to have different outcomes at a certain level. Infinite growth is literal cancer.
“We didn’t want to inflate our valuation with circular investings, the market made us do it! We are the victims here!!”
*Deploys golden parachute*
he will soon have to deploy one made of AI chips
he’s got nothing to worry about. when they crash down to $1, trump will call it a “matter of national security” or some shit, and then bail them out, courtesy of your tax dollars and my tax dollars. because they actually want the AIs for their police state surveillance
The company doesn’t care if the stock price hits $1. If the company is paying it’s bills, it just continues. It’s the people who hold shares that care. The company doesn’t hold shares in itself.
Enron collapsed because the company financials collapsed, not because the stock price collapsed. That happened after all the bad accounting practises and hidden debt came to light. Now, in that case the shareholders succeeded in suing for their losses, but they only had a case because of the mismanagement.
The company absolutely does own shares of itself and it’s ability to secure credit and just engage in business in general depends of the value of that holding.
reply to me with images of AMD-chan, anyone who doesn’t comply I’ll block.
I farted, bro
