Why not fear both? It has gotten to the level where it doesn’t live up to the investment levels and crashes, or it absolutely lives up to it and just trashes the economy in various ways.

I see two ways this could happen:

They make it so you cannot run some models yourself without government approval, based on some criteria. For a random citizen, this would be harder than trying to stop piracy, and thus those willing to ignore the technical law may continue however they like, but it would be enough to block businesses from doing so. Kind of like how some software has a license that is a trap for businesses to have to pay if employees end up using it, but is widely popular among consumers that can get and use it freely. So the home market can do whatever if they really want, but the businesses and products those businesses launch can’t ignore that sort of regulation so freely.

Another path is if they really get buy in that this is dangerous for mere peons to have: regulate hardware available for consumer purchase. Like no VRAM above 32GB, and nothing with the compute horsepower to go more than say 100 tok/s with a 32B model. Effectively setting a forever cap on home usage to current top-end ‘consumer’ and putting regulatory restrictions on beefier stuff. Consumer compute becomes just about improving power and cooling and form factor, no more expanding the capabilities beyond current top end.

Conceptually, I get it. Esepecially if you go with the ‘DNS pinning of CA’ to have a ‘belt and suspenders’ approach where two chains of authority must be broken, one of which inherently tied to your name.

Practically speaking, DNSSEC hasn’t managed to get ubiquitous adoption. To the point where browsers started giving up and doing DNS over HTTPS to well known providers instead.

After trying for a bit, I can certainly relate to understanding little of it. It’s not as concretely explained as I would like and sticks to abstract principles. So no idea about the current state of affairs.

Add to this that incremental improvement comes at exponentially more and more cost. So they spend ungodly amounts more in hopes that the next incremental improvement will push them over the magic line beyond where the are.

Some impressive feats but the issues holding it back from the ‘replace the whole economy’ sort of ambition they imagine are very stubborn. Notably it still confidently declares incorrect information (a significant volume of software developement works around by rigging auto-retries until it stumbles into ‘correctness’, and of course the people pumping out slop art/books aren’t bound by ‘correctness’) and they still have no clear path to autonomous control of humanoid robotics (as crazy advanced as the online GenAI experience, they are still struggling to demonstrate even the most basic manual labor tasks).

Don’t worry, they are already talking loudly about how much more “dangerous” those on-premise models are and suggesting that regulation is needed to make sure people only rent it from trusted facilities that can manage it.

Assuming your assessment of AI utility is correct for sake of discussion, it would not mean it is guaranteed to be profitable for any given company with any given strategy and spending.

Internet shopping and delivery is hugely profitable, but that’s of little comfort to pets.com and webvan.

If a company more responsibly managed their spend and commitments and still reached the same utility as Anthropic, then Anthropic would never see profitability.

No… The worst year Amazon ever had was a net loss of $1.4 Billion back in 2000. Most years in the early days they were at a loss of a few dozen million. At the time, they drew a lot of criticism for running red way longer. If Amazon ran at their worst year for 50 years, they still would have lost less money than Anthropic did.

They haven’t operated at a loss in over a decade.

Ok, but what would that look like in a way that would have mitigated this situation? Seems likely that such a system could actually exacerbate this specific scenario.

This has strayed quite a bit from the assertion that there can’t be enduring problems in the current crop of AI investment because it was at a high a while back.

But to continue, if you invested in the makeup of the DJIA in 1929 and left it in those companies, you would not be having a particularly good time.

If you kept refreshing the investment in the companies deemed to be the ‘good’ ones over time, then yes, your investment fared well, but that says nothing about the enduring value of the companies that made up the index in 1929. This is the current topic. It’s also wild to be this dismissive of the Great Depression as nothing to worry about because, eventually, we decided on a new set of lines that could go up.

So “line goes up” by definition is not really an endorsement that all companies lines go up, we shift the criteria over time to make sure that we measure whatever works in that moment.

$100 of Krueger and Toll? $0

DJIA crested a new high September 3rd 1929 before stumbling 3% the next week.

If death of the market was on the horizon, they couldn’t see it.

The slide being attributable to some "I told you so"s coming to pass may bode ill for the bigger "told you so"s that come due in a few months.

But the market doesn’t act rationally, both going up and going down, so who knows.

It’s a feedback loop.

Upper management can’t tell what good work is, and thus whomever is the most shameless in talking themselves up wins, unless they royally screw up in a way that can’t be missed. If you have any shred of humility or nuance about your work, you are almost certainly not management material.

I have met like 3 or 4 people that I actually had respect for in management roles, but overwhelmingly they were there solely on an overinflated sense of self importance rather than substance.

Sure, you credentialed people have a certain view, but I will wait till I hear from a social media tech bro, thank you very much.

Yeah, I still need quite a bit more money but absolutely feeling the same thing, at least when I engage in generic terms.

So far in my actual day to day job, it hasn’t encroached in a unwelcome way, but I have more autonomy by being in charge of the project I work on. Pressure in the abstract has been there, but also pulled back since they decided slop-heavy usage is too expensive.

So this article is actualy why I’m allowing myself to be a little optimistic that I won’t feel the crushing weight of wanting to just get out of the whole industry, if the general mindset swings toward being frugal about AI token usage.

OpenAI already explicitly postponed their IPO somehow hoping for a better climate to IPO in…

A certainly… optimistic expectation.

Might as well just stop using AI agents that that point.

I don’t work at Accenture, but at a group that had a similar journey from adoption to scaling back to only the included tokens and I would say that is precisely the idea: giving up on ‘Agentic’ use of AI, but still have enough for some acceleration.

From what I gather, in our group the findings were:

• Obviously, it was costing a heavy chunk of change and then even more expensive when rates were hiked
• There was no good way for them to even know what productive end the spend went toward, they know which employee expended a bunch of tokens, but no idea what they would have used it on
• Despite a crank of volume of stuff, they weren’t seeing any business value of the stuff. Requests still took about the same time to fulfill, etc
• The most eager AI producers got ahead of their skis, and their stuff was useless because nothing and no one could reliably fix/tweak it after a certain point.
• All the scary ‘AI will ruin IT security’ that the AI companies themselves have been expressing likely didn’t help either.
• Perhaps the most uncomfartable of all, they found out that however good or bad an AI project turns out to be, management can’t tell the diference until it is too late. Being able to ‘manage’ the content has always been flawed, but the AI dials it up to eleven by ‘looking’ just right as a demo to someone that understands neither the customer nor the process of creating the work, but blows up in their faces in delivery. Kind of like how so many technology article writers breathlessly talked about the photoshop clone, despite many of them never having touched the relevant software, then heavy users reporting that it is actually shit, but the people writing about it have no context to know, but felt compelled to talk about it anyway. Those are management in the fields using AI.

In my personal experience all the coders that I know that went full vibe… They were shit coders to begin with…

It really puts into perspective why my subjective experience with them is so much worse than a lot of people report…

So I was looking at some tech stocks that were showing varying amounts of decline for the week, and saw one that was 20% down. So I clicked the ‘why is it down 20%’ button and the AI response included “but as an AI centric company, it should recover and resume new highs”

Don’t worry, if we are in the bubble popping, we will have plenty of dominos falling and each one will have a chorus of techbro cheerleaders proclaiming that umm… actually it’s not a bad thing for whatever contrived reasons.