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After the bubble pops how much would our lives be impacted?
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Would AI vanish or still be there?
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How exactly do you think the bubble will pop? Will AI companies simply run out of money? Or will it be because of the environmental effects?
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When do you think the “pop” will take place?
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After the bubble pops, in future there will be companies/people who will try the AI thing again? What will that be like?
I think part of the process is going to be the enshittification of AI services. (Temporary, until the technology for sustainable infrastructure catches up.) Tokens will cost a premium, and a lot of businesses that depend on AI will turn to China’s cheaper offerings.
Hobbyists will turn more to home-grown AI systems.
In recent news, Chinese AI is catching up to Anthropic. It’ll be interesting if the Trump administration tries to block the Chinese AI offerings in order to bolster US ones. Trump and the AI tech bros are familiar bedfellows after all.
You’ll be able to buy LLM hardware (video cards and RAM) for cents on the dollar as companies fail. The NASDAQ will drop a bit, the number of LLMs will reduce
Better than the GFC where all we got was Enron corporate branding and expensive houses
Comparable to dot com where loads of nerds bought $5 servers
Our 401k will go down a bit, a bit of money will be transferred from retail investors to the big players, the rich will get richer and the poor will get poorer. You won’t see so many ads for dumb AI services that literally no one wants. The big players will be fine, maybe, maybe, a few data centers shut down, but most of them don’t.
like this. it won’t go away. it will oscillate and then stabilize
I think it will be triggered by the massive overvaluation of many AI labs. Investors will sell. In the meanwhile, other sectors will still have to adjust to the new reality of token generators, so the wider economy is impacted.
LLMs will not disappear, just like real estate did not disappear after 2008,and the internet did not disappear after the dotcom bubble burst.
But I can imagine the end of hyperfocus on the “AGI race”.
I’m assuming one or two significant players will go bust, but probably not the biggest like Google, Microsoft, Amazon. They might take some serious hits, and they’ll deprioritize AI, but still exist. Maybe someone like Oracle or xAI goes under and gets parted out like an airliner getting scrapped. A lot of data center projects will be cancelled, others will shut down, and the local politicians that pushed for those data centers will see their political careers end as their districts are left with big empty buildings and infrastructure debts that will be hard to pay.
Wouldn’t such turbulent times be exactly when established companies are at risk as well? E.g., what electrification is doing to VW.
Although the risk for AI-first vs general big tech does depend on the root cause of the disruption.
The industry will end up with one or two winners and a lot of losers. Very hard to predict these things (smart money in 1997 was that Apple was about to file bankruptcy). One or two companies will have success and the rest will evaporate or be absorbed. Then the AI product itself will be priced up (and dumbed down) significantly.
AI will not go away, but will be far more limited and specialized. The day of free general access to powerful chatbots will be up.
The AI bubble will pop the same way the dotcom bubble popped. A lot of money lost and the hype will die down, but the technology will remain and reach a homeostasis at the level where it’s actually a helpful tool.
When the dotcom bubble popped the internet didn’t disappear, it just became what it was supposed to be. When the AI bubble pops the technology will still be there for use cases where it’s actually appropriate and useful.
Internet was the “AI” of the dotcom bubble. It didn’t go anywhere after the bubble burst and neither will AI. What will go away are the companies with only hype but no product. Amazon and eBay came about during the dotcom bubble and now companies like OpenAI and Anthropic will likely be equivalent ones.
The bubble bursts when investors start losing faith that the company they have invested into will become profitable so they pull out, which makes other investors get scared so they pull out too and then the company goes under.
OpenAI and Anthropic will likely be the companies going under when the bubble bursts. Because unlike all the other big companies involved in AI (Nvidia, Microslop, Google, Meta etc.), they don’t have anything else to diversify with and they have never made a profit. When investors withdraw they are done for. The other companies will take a hit, but they will survive, because they have profits from other things.
The difference is that there were services that could leverage the Internet and be profitable. Every AI company is wildly unprofitable and burning unfathomable amounts of money. There’s no path for them to become profitable, unlike some companies in the dotcom era.
Exactly. The AI bubble popping will not “un-invent” AI technology. The technology exists and can be a useful tool for the right use cases, just like the internet still existed after the dotcom bubble popped.
LLMs will still exist and will still be trained and used. What won’t exist are AI only companies.
Considering from where the bubble grows, my wisest guess as to when it will start showing cracks (and I’m not very wise, by the way) would be Republicans doing bad at next elections.
As of now it seems that any losses from AI industry would simply be tanked (Nvidia’s capitalization, for example, still ain’t a joke, they’ve got a lot of money to burn) or socialized. Little bits of regulations or opposition to socializing of losses may actually move the loss needle beyond pain point, where we can hope for panic to ensue.
If bubble pops - AI is here to stay anyway. Chinese have shown with their DeepSeek that you can run decent sized models locally, and the main gatekeeper of local AI is, you guessed it, Nvidia. Prices for server GPU’s are disproportionately high and one of the reasons is to not allow plebs like us to have that. But with further optimization of AI models they’ll become more and more accessible on hardware consumers already have.
My second guess of when though would be investors getting tired of AGI promises as it is AGI that has to magically turn money pit of AI into unprecedented profits.
The old message to people: only the first people get rich in a gold rush. The people who make the real money are the people selling shovels to the late investors.
Nvidia are selling shovels. They’ll do great as long as they prepare for the pivot after the people rushing give up.
I think the AI bubble will pop when another part of the economy needs capital, sucking up the capital going to AI.
AI burning money for market share isn’t new to Wall Street, that’s been tech for the past generation. The issue is going to be liquidity to not test these valuations. Once they are tested, they are going to collapse.
Dogs and cats living together etc.
Social media companies will fill the gaps, continuing to spread their toxicity through society unchecked. The Pied Piper of Hamelin is starting to look more like a cautionary tale.
Probably:
- GenAI continues to be used for marketing, and anything else where form matters more than substance
- anything where meaning is really critical might still use it, but will require solid oversight/governance. Software, research, medicine, teaching, etc.
Maybe:
- AI bubble bursts, with ripple effects into the broader economy, particularly in the US. This will be a huge problem if big banks are heavily leveraged for their AI investments (not sure this is the case, but it seems likely). If this happens, the collapse will be much worse than the GFC, perhaps worse than the great depression.
- Political spillover… No idea what this will look like, but it’s a big trigger…
One change for me is celebrating on the anniversary of an AI company shutting down.
Big tech will keep their AI. Like others here have said, AI companies without another income stream will go belly up.
Some data centers will be sold and repurposed. Others will sell off their hardware to the consumer market.
Lower temperatures and less noise near the former data centers.
I don’t see property values going back to where they were unless a data center is dismantled and the water table recovers.
