Since some times now the AI bubble is growing and its consequences with it, flash storage price increase, electricity went wild in some places, GPU… Don’t need to say anything sadly… NVIDIA became the most valuable company exceeding 4T
So when all of this will go crazy and grow to the burst? When does prices will go down and speculators rushing out of it?
Open question feel free to explain the wider you can, I’m not a financial so I’m really interested in some analysis of the situation :)
I thought it is in the process of bursting, but the stock price is not going down fast…
When will AI bubble pop?
Earlier than we’d expect, but later than we’d hoped for
Hope it doesn’t pop a Sunday :)
The AI hype might go out with a slow and painful whimper instead of a bang. I have a feeling that AI boosters will try everything to make it have a soft landing instead of a bubble burst, to try to keep the dream of AGI (which very likely won’t come from some kind of LLM, but a much more advanced tech) a reality instead of a far-fetched dream only realized in speculative fiction.
As the old investment saying goes:
The market can remain irrational longer than you can remain solvent.
Be ready, but don’t bet on when it busts.
…Also, I think this is more ‘dotcom bubble,’ where it burst hard, but the internet ultimately didn’t go away.
I don’t think AI should completely melt away but to be more responsibly added to the global technology
Seems like soon.
My prediction is: Not anytime soon. Seems we’re getting lots of coverage in the mainstream now, and people start to question if their financial investments are safe or if we’re gonna re-live the real estate bubble from a few years ago.
But there’s still a datacenter popping up every two weeks, an absurd amount of money being invested in these companies and everything around it up to small nuclear reactors. The people with lots of money are still firmly seated in the hype train. And if past investment bubbles taught us anything: It takes way longer than we’d expect until they finally burst.
So I’d say it could pop any day, but I think this is unlikely to happen within the next 2 years or so, maybe more. Though you might want to think about your retirement fund now and make sure there’s some money in other assets.
I remember flying into Las Vegas when the real estate bubble popped in 2009. You could see scraped land 30 minutes out, then pavement and services going in, then partial frames and then closed envelopes. All abandoned.
Stupid money flowed in until the very last minute. The stupidest money kept going in thinking they’d buy the dip and catch that falling knife.
People will add money even after it pops. I think it was Buffet who said that the only way to really make money is to sell too soon.
Speaking of those data centers, what do you suppose we’ll do with all that compute post-bubble?
Good question. But technology always finds ways to eat up resources. I mean we’ve come from computers with few megabytes of memory and slow internet connections to several Gigabytes of memory and Gigabit internet connections, smartphones with double the processing power every few years and they roughly do the similar things in a lot of aspects. Call, text, office work, surfing… We had those very same things in the early 2000s with a fraction of the resources… Oh well, and we’ve gained some awesome new things like smartphone cameras or video streaming. I guess we’ll come up with use-cases. Question is just who is gonna afford to pay for operation and electricity. Compute is going to become way cheaper once the taxpayer and people ate the investment losses and the hardware is paid for. But operation costs a pretty penny so I think I still don’t have any idea about profitable use-cases given the scale of it all…
Would you think that an announcement about an impossibility of pushing transformers further would results in a burst of the whole bubble?
Hehe. We’ve already had several "AI winter"s. For me it’s pretty much settled by now that transformers and maybe even large language models itself won’t scale well past what we have today. And I don’t think they’ll lead to super-intelligence, which used to be the sales pitch. And I think several high profile scientists hold that opinion. I’m really split on this. These bubbles are volatile. All it takes is enough head fond managers to pull out and maybe a large company like Microsoft. It’s somewhat rare companies at that size just fail, but I guess it’s possible?! I mean I’ve also predicted Bitcoin to fail several times now because it’s not as usable as promised, yet that always climbs to a new record high. So I’m a bit more careful with my predictions these days. There’s still lots of things we can shoehorn AI in to. We’ll see it in robotics and that’s barely started. And ultimately this bubble isn’t fueled by realistic expectations in the first place, so I’m not sure if any factual statement itself can change this. It’ll grow as long as it grows, as long as Sam Altman is able to deliver promises and as long as there’s enough money pumped in. Which might change once there isn’t enough money available anymore or if it actually stagnates for long enough for investors to want out. I just don’t think they’ll listen to reason.
I think it’ll happen within 2 years and I think the housing market will collapse around the same time.
Not sure if I WANT to be right but that’s my prediction. Two major bubbles popping back to back.
So you think a kind of snowball effect would affect the both market?
I didn’t necessarily think one will lead to the other, I just think they’re two bubbles overdue for popping.
Boomers are dying, or at least liquidating their wealth. They want maximum profit from their homes but they’re gonna have a really hard time selling with the rising prices and fewer buyers.
I stand to lose with my prediction. Most of my “wealth” is the value of my house…but it needs to happen. And I want it to happen before they die so they can feel some pain from the issues their hoarding has caused
When the bubble pops it won’t make AI go away or make prices lower, it will just cause financial pain in the market.
…which you want to happen as soon as possible, else the bubble just gets bigger.
The bigger it gets the harder it pops, maybe it’s also a good way to bury these companies down (But would have a very bad economic impact of little people…)
Don’t you think that massive stocks would be useless without any demand and that prices would remain high?
I think this is probably not a good way to look at it.
The company you work for, or the company that supplies the company you work for, or the company that manages your 401K etc are all invested in this bubble.
When I say that the growth of GDP of the USA used to be 70% consumer spending year over year and it’s now something like 60% AI, I want you to understand that consumers aren’t gonna have money to make up that 60% when this bubble pops. Because all of us will be detrimentally affected when it happens.
A lot of us don’t know where or when the blow is going to come from, and somehow we think ourselves insulated from the effect this bursting bubble will have. But that’s simply not true.
The prices of everything that we need to live and every convenience we rely on to make our lives easier is now tied to this bubble. Things are going to get more expensive when it pops (even if it craters the market on some components etc).
The bubble is getting extended now due to Saudi involvement. The domestic (and SoftBank) money hoses have lost a lot of pressure, so that shitstain MBS just got jerked off by all the oligarchs to pile in too.
May 27th 2026
Will write it down in my calendar
I would guess that it may already started to deflate a bit. The truth is that it will pop when the loans won’t be paid off so investors and banks starts to backtrack.
I am not worried about Nvidia but cloud providers. The datacenters built to support ai won’t have much use when the customers (OpenAI…) will fold.
I don’t care about what happens with OpenAI and other AI startups they probably don’t survive. Google, Microsoft, Meta… have enough money to lose so it will be bad for them but they will survive it. Hardware manufacturers see the writing on the wall and try to milk the bubble till it lasts so if they play it decently it won’t be big issue for them - they are probably the winners in this race whatever happens.
Any time now…
See?! Red! …Oh, wait. That’s just the profit line.
I’d say around late 2027 to somewhere in 2028. A crash around five years past the release of ChatGPT seems reasonable.
I’m going to be the crazy person here and say, “it’s not a bubble.” That is, it’s not what the “fuck AI” community is thinking about as “a bubble” (e.g. the housing market collapse).
OpenAI could very well fold and take Oracle along with it (yes, please!) but even if that happens there’s far, far too much demand for AI stuff for any sort of grand “popping” economic effect.
To this community, “AI” means “AI chat” with people using Big AI company services like ChatGPT for stupid or malicious purposes. But “AI” as an industry is way, way TF bigger than that.
Think of Nvidia GPUs as generic infrastructure like roads: You can use a road to transport all sorts of things using all sorts of vehicles. What the “fuck AI” community cares about is the billionaire drunkenly driving a sports car anywhere and everywhere without consequences when they cause an accident or even kill people. However, the road itself isn’t responsible for that.
Even if OpenAI, Anthropic, Copilot, and Gemini end up failing or being disused, Nvidia and the demand for AI services and solutions will continue to grow for decades. Saying that “AI is a bubble” or a “fad” is like going back in time to the early 1990s and saying the Internet is a fad.
To be precise, it is LLM bubble. We never know if other, more useful flavors of AI would need that much resources.
I’m going to guess that you’re younger and if you were alive through the dot com bubble that you weren’t really old enough to understand what was going on. Back then, no one was seriously saying that the internet was a fad or going away or anything like that, although you can find a few prognosticators that will contradict me, no one took them seriously and ridiculed them even then. No, it was a bubble because people were irrationally throwing money at companies that did “web stuff” and added “dot com” to their names. Investors were so hyped up about the potential of the internet that they threw all common sense out the window and gave money to anyone, and companies in turn dumped money into salaries and expensive perks to hire people who barely knew what they were doing.
The amount of waste and excess was appalling to people when the bubble popped and they saw how much companies had spent on unnecessary bullshit. I remember auctions where you could pick up super expensive Aeron chairs for dirt cheap because clueless companies didn’t know how to spend money and all the big internet companies had plenty of chairs like that. There was a ton of money dumped into infrastructure too. Cisco made a boatload of money during the bubble and after it popped they had so much used equipment floating around that their stock is only now recovering to their dot com peak twenty five years later. Companies like Worldcom blew up because of this infrastructure boom, but when the bubble popped they engaged in fraudulent accounting shenanigans in order to appear healthy.
I would argue the demand for “the web” in 1999 far exceeds that of AI today, and yet there was absolutely a crash like the housing market collapse. It’s not that there’s no use for AI or that some of the capital expenditures might prove useful in the decade ahead, it’s that so much money was thrown around irresponsibly to anyone that claimed to have a web presence or something to do with the internet, even when they didn’t, that there was a huge economic contraction when people finally sobered up - ie. the bubble popping.
I see the exact same excesses now:
- Companies that have nothing to do with AI shoehorning it in to claim they’re part of this big boom
- investors throwing money at ludicrously bad ideas because they are added “AI” to a product no one wanted to begin with
- People with expertise in the field having absurd amounts of money thrown at them to gain competitive advantage
- Brand new companies worth billions of dollars that are not pulling in a fraction of the revenue necessary to justify that valuation
That said, I believe that this is even worse than the dot com bubble for at least two reasons:
- Back then, these companies were public, and were required to disclose a bunch of financial information as a result. Sure a lot of people ignored the warning signs and got caught up in the hype and FOMO, but the fraud was so much easier to unravel because their numbers weren’t hidden like today’s private AI companies.
- Dark fiber after the bubble popped is still useful today, so a lot of the money spent then enabled future services, as you alluded to. On the other hand, today’s GPUs will be obsolete in a few years. Aside from being surpassed by newer technologies, the cards themselves will only run for so long before failure. The data centers themselves will still have some value, and some of the electrical generation being built will be useful, but overall, the long term benefits won’t be nearly as transformational.
So yeah, it’s a bubble, it will pop, and it will suck when it does. AI isn’t going away but most of the companies soaking up money now will end up as historical footnotes, like Netscape or Yahoo are today. LLMs and other generative AI will remain inefficient, continue to “hallucinate”, be used for propaganda, and further alienate people from one another. Yay?
To reply I’m absolutely not saying AI in its kind is a tech revolution but not in the way thats it’s shown today.
Your point of view about this community is surely right but I would had that we care about the global ads about AI.
AI as a technology is not a bubble, that’s sure.
But how AI is developed and funded today, makes it one.
Just seeing NVIDIA value going crazy in the last 2 years shows that the (over) hype is taking a lot more in account than the really technology behind it.By that I’m just saying that as every time (crypto I look at you) speculation just ruined it (for now) and I really hope that it will take the way of the internet and that it separate himself from the speculative side to became an open technology acquired by humanity
Think of Nvidia GPUs as generic infrastructure like roads: You can use a road to transport all sorts of things using all sorts of vehicles.
Not if it turns out that it is not economical to build and maintain that kind of roads. And this is exactly the assessment and why it is called a bubble.
And of course, like you can use “classical AI” to solve the traveling salesman problem, play chess, find optimized subway connections, or recognize speech and handwriting, there /might/ be some useful applikations for newer algorithms and GPUs. Though the main application is to produce textual slop, which has little value.
For example, Linus Torvalds thinks AI might in future possibly help to find some bugs in human-written computer software. That could make its value similar to address sanitizer or valgrind. No, these two are not billion dollar companies.
As an AI researcher who has over a decade of research experience and publications, it’s kind of funny to see the general public’s reaction to what they think AI is. It’s not that AI is a problem (though it will be, and AGI is coming sooner than you know it), it’s that these products being used for pure profit over anything else.
Just to clarify, AI has been used in every single industry for almost two decades. It’s in every aspect of life. The public now thinks of AI as funny pictures or a chatbot, but that’s just the smallest tip of the iceberg.
and AGI is coming sooner than you know
Are you able to elaborate on this at all?
I don’t personally work in the AGI space, but there have been some massive improvements within the last 2 years even. The public only has access to the most constrained, well-understood models, and even those are pretty good. I (and LeCunn, Hinton, other big names) don’t think transformers + massive compute are the solution to AGI, but even that combination now leads to emergent unexplainable capabilities. I work in the field and even I think it’s magic sometimes.
but even that combination now leads to emergent unexplainable capabilities
Ok, but that’s only a sign that you don’t understand it enough. Which would be catastrophal in case of AGI.
emergent unexplainable capabilities
Really curious to hear about these. Do you have any examples?
Basically LLMs can do things it wasn’t explicitly trained to do once a certain relative scale is reached. This is for LLMs but other model families show (considerably less) potential too. Keep in mind this is from THREE YEARS AGO: https://arxiv.org/pdf/2206.07682
and it’s only accelerated since
Basically LLMs can do things it wasn’t explicitly trained to do once a certain relative scale is reached.
What are some examples?
too much to write here, look at Table 1 in the paper posted above, and you can explore from there
In that way, what’s your opinion about the future of it?
Do you think it will ever be stuck in a speculative for-profit environment or would became a real technology alone with researches and real statement only?
Look up the Gartner hype cycle. Every new technology goes through a similar process. Like I said, it has been used in every possible industry, things like energy, banking, healthcare, climate, defense and intelligence, social media (“the algorithm”), I mean name a sector and there are very mature pipelines already there.
If you can put your finger on when exactly it will happen you stand to make a lot of money.
Never try to catch a falling knife.
Yeah, but if you manage to avoid cutting your fingers off you get to keep a really expensive knife.
to be clear this is a joke
If nvidia hadn’t hit expectations it might have started something.
