Big tech has spent $155 billion on AI this year. It’s about to spend hundreds of billions more
Big tech has spent $155bn on AI this year. It’s about to spend hundreds of billions more
Yet they are too strapped for cash for raises or to not lay off workers.
Those numbers seem odd to me. I feel like the truth is 1 billion was spent on productive programmers and hardware. The small remainder of 154 billion was used to improvise profit growth through totally valid payment to some CEOs ego account.
Nobody seems to have noticed that the business model here is to funnel as much traffic and spend to the big AI corporations as possible with no foreseeable return (except vague nonsense about "productivity gains").
Just wait until someone requires one of these things to make a profit, that's when if you're a corporation that integrated this shit deeply into your business, you'll be covered top to bottom in rug burn from the inevitable rug pull of price increases.
Love that the pic associated with that link is Mark "Metaverse" Zuckerberg. A hallmark of successful dubious ventures, if any.
Imagine what we could have achieved globally if we had spent all that money on a different cause.
We could have managed to establish a colony on Mars, or perhaps we could have even finished developing Star Citizen.
Let's be honest here, in reality, it would just made 5 people turbo rich while the rest stayed the same. Maybe make 4 more ships in star citizen, but that's it.
All for it to fail and implode on its own weight.
I definitely hope so, like it will with dotcom bubble. If the bubble burst delays the rise of killer robots, then I am all for another economic recession!
Already starting to, at least for smaller companies and startups that were trying to use it to build things end to end.
If you use it to provide you with content, sure, easy no worries. building a website? sure no problem as long as it doesn't require any sort of logins or security stuff. an application? well now you're going to have some problems.
Most AI can't scale something. and most are absolutely horrible at any sort of security. and all of them can't UX themselves out a wet paper bag.
Now if you utilize them as a tool, a sort of rubber duck, sure they're great. The issue is, and I'm seeing this first hand because of my job, is that many smaller companies and start ups aren't doing that. They're assigning someone, a "vibe coder", to feed the thing prompts to build stuff from end to end. Naturally the end product is an insanely resource heavy, convoluted code, exploitable mess that can't scale. It creates a massive amount of tech debt. All to save a couple grand instead of hiring actual devs. So now when I get a call or email from one of my contacts that "so and so's company/start up needs someone to clean up their app because it's very broken due to a vibe coder" I charge them an arm and a leg.
So you're right, it is going to fail and implode on it's own weight but I'm going to damn well be sure to take advantage of these people before it completely does and I encourage other freelance/consultant developers to do the same.
The hype for AI is ridiculous:
https://fortune.com/2025/02/19/hp-humane-deal-ai-pin-shutting-down/
Chatgpt, what is sunken cost fallacy and why are rich people so profoundly stupid?
This is not that. They're all hoping to be the next Google or FaceBook. They know damned well most are going to lose. The gamble is that they won't be the one holding the bag when the bubble pops.
This is as high stakes as tech gets today.
Some of them are already Google or Facebook tbh. They could run many safer gambles for the same money. But I suspect investors demand AI right now.
Spend it all and fail
Unimaginable amounts of money spent just to provide a free service to help improve the human race by sharing knowledge. Such marvellous gentlemen.
Go broke
Anyone remember the dot-com bubble?
Every time you think of something and don't understand why it happens, it does good to ask about every neighboring assumption "what if not".
Why am I saying this?
Because AGI created this way is impractical and economically useless, that's fundamental. One can even say "elementary".
What if they are not trying to create AGI?
What if they are not trying to make money?
What if they want a bubble burst, not fear it, and want it to be as big as the sky, so that Western economies would crumble and their surveillance systems were the only thing standing, together with other functioning machines?
From the answers depends the optimal strategy for other parties, suppose, maybe turning their Big Beautiful Bubble Burst into just another dot-com bubble, via adoption of this technology for actually useful applications, is something we should strive towards.
This makes the dot-com bubble look like a kiddie pool - at least those companies were trying to build actual products, while today's AI spending is burning through more money than the GDP of most countries just to have the biggest model with no clear path to profitability beyond "trust us bro".
They're different, and I think this one has the capability of being more devastating.
The dot-com bubble was really broad. Hundreds or thousands of companies, all without vowels in their names trying to break new ground. A wild west style gold rush. When it popped a lot of small companies went bankrupt.
This is a handful of companies with billions of capital buying GPUs from NVidia to be make the largest hungriest machine they can. All in the pursuit of being first to create "AGI". If one of them succeeds, the others are toast and multiple 500+B dollar companies will collapse in on themselves. If none of it works, the same thing happens and it takes a large chunk out of $4T Nvidia too.
I'm sure that silicon valley executives visualise a future where they own the machines that produce all intellectual property and do most jobs. They see a return to feudalism where they are the lords.
I think this greater vision is about as likely to be realised as it is that Elon Musk will invent full self driving, or robots that aren't obviously remotely operated, or a tesla roadster, or a battery powered articulated lorry with thermo nuclear explosion proof glass, or building a rocket to get the US back to the moon before the Chinese in what is clearly a new space race/pissing match. Or a hyperloop, or ever getting anywhere near to building a colony on Mars, or, or, or.
But I don't think it is just a case of AGI or bust. LLM's augmented with ai agents have a very real potential to replace a capitalism-destabilising percentage of white collar jobs without AGI.
Just like the dot com bubble popping didn't kill the web, I do think it is unlikely that any possible current AI bubble popping will kill capital's push to automate jobs away.
(And as far as I can see the AI bubble is the result of massive capital expenditure rather than rampant speculation, so because I am pretty confident in the 'value' to capital of LLM's + AI Agent's, I don't really see it as the same kind of a bubble as the dotcom bubble.)
I'm honestly hoping for a repeat. Hopefully Microsoft goes down this time too, since they're heavily into AI. Twitter, Meta, Google and Amazon too. It's really just the worst of the worst.
They remember it too. It's why they try to keep the bubble going by jumping to the next shiny investor lure. Just a few years it was all deep learning, blockchain and NFT. One guess is that they'll go for humanoid robots next.
This is no revelation. THEY KNOW. The play is obvious.
Not one these investors wants to risk missing out on being the next Google or FaceBook or Twitter or Amazon. They know damned well the vast majority will fail. They're gambling on not being the one left holding the bag.
AI is here to stay, will continue to improve, and there will be a killer app, probably a dozen. My money is on life sciences, particularly medicine.
At least they‘ve wasted their money for research of what doesn‘t work instead of just building silly products as for the .com bubble.
Humanity will gain insights to the kind of AI approaches that won‘t work much faster than without all the money. It‘s just an allocation of human efforts
It’s the most inefficient technology but praised as the most efficient because it simply runs on investor money. But that well will run dry eventually and who will bear the cost then? Consumers without jobs?
I think Meta’s AI initiative doesn’t run on investor money since they do share buybacks instead of selling more shares to keep afloat. Meta makes more than a hundred billion of revenue from selling ads on Facebook and Instagram. So Meta’s AI program runs on boomers clicking on ads that have been generated with AI.
I disagree a bit. Any money the ultra-rich invest into research is better spent than on their next Mega-Yacht. Even if AI cannot meet the expectations of AGI etc.
It's spent on NVidia GPUs. Jensen Huang just buys leather jackets from what I can tell.
This research is cooking us alive right now and for what? So machines can do all the creative things while we fight for scraps? I‘d rather the overly rich spend it on something harmless but silly. At least the average joe can make a living producing luxury items. As grim as it sounds but that‘s preferable to what‘s coming.
Just a few hundred billion more and I'm sure that somebody will figure out a profitable use for AI that isn't scamming old people.
It's porn.
It's always porn that decides if a technology lives or dies.
I can imagine one - maintaining adversarial interop with proprietary systems. Like a self-adjusting connector for Facebook for some multi-protocol chat client. Or if there's going to be a Usenet-like system with global identities of users and posts, a mapping of Facebook to that. Siloed services don't expose identifiers and are not indexed, but that's with our current possibilities. People do use them and do know with whom they are interacting, so it's possible to make an AI-assisted scraper that would expose Facebook like a newsgroup to that.
Ah. Profitable. I dunno.
Do so please, dump some more money! No need to make jobs, but destroy them from AI.
Suck it berg produced a platform for spreading hate snd constant relationship drama. Nothing he produces is good or helpful. He jumped on the Trump bandwagon like a little bitch the second he could. He's a real piece of work.
Why such wealth got into his hands is sick. It could be used for some real good if it went to someone with some compassion. At least Gates is trying to save his soul.
Bill Gates is only leaving $10M to each of his kids (I say "only"...). The rest he is bequeathing to charity. presumably his charity, but i don't know.
Proper AI or LLM?
that's a lot of ephemeral tech jobs, hope everyone has plan B
You mean when the bubble bursts and there are lots of people who worked on this available on the job market?
I'd expect them to be big data specialists, mostly knowledgeable in Python and matrix operations, narrow optimizations needed there, and not very competitive for other typical tech specialties.
They'll just have to become data analysts, assistants in labs working on things like genome analysis, and so on. Perhaps medical RnD will get a boost due to all the willing slaves, LOL.
I wanna see a breakdown of cost vs revenue for each big tech and their AI stuff.
I know it’s all negative, I wanna know who is the most negative. My money is on google.
This analyses what’s publicly known: https://www.wheresyoured.at/the-haters-gui/?ref=ed-zitrons-wheres-your-ed-at-newsletter
This snippet summarizes my AI forced into everything experience, especially when I was prompted to have my text message summarized. I said no, and the message was "Ok"
What text messages are being sent that need to be summarized?
which mostly means that Apple aggressively introduced people to the features of generative AI by force, and it turns out that people don't really want to summarize documents, write emails, or make "custom emoji," and anyone who thinks they would is a fucking alien.
Great analysis. I still have no idea how they think they will ever make their money back.
And I haven't touched any of it.
Kinda hard to touch bits
What? I touch mine all the time!
I hate these fucking articles. That’s how it works with every new tech/industry etc. Everyone spends billions and billions hoping it becomes profitable 10-20 years from now, maybe it does maybe it doesn’t, we can’t know but that’s how this shit has always and will always work for basically every new tech or research that happens.
Maybe complain about countries not taxing corporations enough, but not how new industries and technologies are funded.
Not these kind of figures. Only a quarter of countries have annual GDPs larger than what's been spent so far this year. This is on a scale not seen before.
What makes it worse is that it's being spent on something which consumes huge resources and has no purpose except giving a few people more power as they would control what these systems would say is true.
That just shows that some parts of the economy have far too much money. And it's all going to nvidia
Transatlantic telegraph, I think, was very expensive, or Panama channel projects. Before they were finished to any useful degree.
In this particular case - I don't think it's more expensive than Soviet attempts at turning Kazakh steppe into agricultural land, let alone all the space and defense projects.
It's an ideology-driven effort all right - an idea that you can create an inherently totalitarian technology. Probably caused by the popular (in the 90s and early 00s) belief that the Internet is inherently anti-totalitarian, so there's a need to compensate. Both are wrong.
Believe it or not I can complain about more than one thing at a time.
Where they get their money from ?
It's going to be a bigger bubble than the dot com one.