Say farewell to the AI bubble, and get ready for the crash
63 comments
·August 20, 2025NitpickLawyer
What a bad article. I mean how biased can you be, to put the first big quote from someone who wrote a book called "The AI con". Come on! This feels like the "deepseek r1 is the death of nvda" of 6 months ago. Someone is making a play, and whoever wrote this article fell for it.
gpt5 has always been about making a "collection of models" work together and not about model++. This was announced what, a year ago? And they delivered. Capabilities ~90-110% of their top tier old models at 4-6x lower price. That's insane!
gpt5-mini is insane for its price, in agentic coding. I've had great sessions with it, at 0.x$ / session. It can do things that claude 3.5/3.7 couldn't do ~6 months ago, at 10-15x the price. Whatever RL they did is working wonders.
HAL3000
> gpt5 has always been about making a "collection of models" work together and not about model++.
No, it wasn’t. Have you read and listened to Altman’s hype around GPT-5 from a year ago? They changed the narration after the 4.1 flop, which they thought would be GPT-5, and it seems some people fell for it.
> Capabilities ~90-110% of their top tier old models at 4-6x lower price
Maybe they finally implemented the DeepSeek paper.
sapphicsnail
> What a bad article. I mean how biased can you be, to put the first big quote from someone who wrote a book called "The AI con".
It's an op-ed. It's supposed to be biased.
athenot
This is an Opinion piece, not a news article. The distinction between the two seems to be lost on most people nowadays.
One way I leverage opinion pieces for things with which I disagree, is to treat it as a sort of "devil's advocate". What argument are they making? Is that really the strongest one they have? Does my understanding of that domain effectively counter those arguments? etc.
In this case, the main argumentation is on how ChatGPT is not the miraculous genie it was hyped up to be. That's a fair statement, but to extrapolate that into "AI bubble is crashing now" is overlooking a host of other facts about its usefulness. Yes we'll eventually hit the through of disillusionment but I don't think we're there yet.
Workaccount2
Media orgs (well journalists really) are especially hostile towards AI and it's easy to see understand why.
mvdtnz
> gpt5 has always been about making a "collection of models" work together and not about model++.
That is revisionist history. Look at Altman's hype statements in the weeks and months leading up to gpt5, some of which were quoted in the article. He never proposed gpt5 as what you're saying and indeed he claimed a massive leap in model performance.
NitpickLawyer
> https://x.com/sama/status/1889755723078443244?lang=en
> After that, a top goal for us is to unify o-series models and GPT-series models by creating systems that can use all our tools, know when to think for a long time or not, and generally be useful for a very wide range of tasks.
> In both ChatGPT and our API, we will release GPT-5 as a system that integrates a lot of our technology, including o3. We will no longer ship o3 as a standalone model.
6 months ago.
There's also another one, earlier that says gpt5 will be about routing things to the appropriate model, and not necessarily a new model per se. Could have been in a podcast. Anyway, receipts have been posted :)
egypturnash
I sure am looking forwards to what will happen to my power bill once Facebook decides to default on its share of the bill for the massive power plants Entergy is building solely to power the huge-ass data center FB's building in northern Louisiana. https://www.knoe.com/2025/08/19/entergy-power-plant-meta-dat...
selimthegrim
I was just in the Louisiana public service commission meeting where Entergy told the regulators that Meta Platforms was worth 2 trillion and they got some opinion from the New York law firm that their word was good so YOLO. Passed 4-1.
geye1234
I have also concluded that it is more likely a bubble than not.
Anyone looked at buying S&P sector-specific ETFs? For people who want to keep their portfolio spread as widely as possible, but are frightened by how tech-heavy the S&P index is, these seem a good option. But they all seem to have high costs (the first one I pulled up is 0.39%).
marcosdumay
Hum... Does anybody expect the US government to reduce the money supply or distribute it? Or for the dollar to devalue enough that their money doesn't make much of a difference anymore?
If the answer is "no" for all above, then you should expect some bubble to keep going. At most, they will change the bubble subject.
1945
The author isn't exactly a thought leader in the space, or really any space for that matter. Opinion worth nothing.
nathan_compton
I've never met a "thought leader" whose opinion was worth anything.
aydyn
"Thought leader" isn't an actual title (or at least it shouldn't be). In my mind, its simply someone who you recognize as having the expertise worth paying attention to.
cjbgkagh
It’s a title that is given to people to get them to present at junkets, a modern socially and legally acceptable way to bribe people. No one should take them seriously.
roywiggins
Have bubbles ever been successfully called by thought leaders?
hasperdi
Yes. Say there are 10000 thought leaders with different thinkings. There's a chance that at least one is right.
MattGrommes
Yep. Then they're the lottery winner that gets to go on TV and write a book about it as if it was expertise that led to their prediction.
alephnerd
If by "thought leader" you mean domain experts making criticism then yes.
For example, Nouriel Roubini calling out the risks of the 2008 Recession before it happened, Michael Pettis calling out the risks of a real estate balance sheet crisis in China before Evergrande happened, and Arvind Subramanian calling out the risks of a a shadow bank crisis in India before the ILFS collapse in 2018.
For AI/ML, I'd tend to trust Emily Bender, given her background in NLP which itself was what became LLMs originated from.
yahoozoo
Is Sam Altman a thought leader?
exasperaited
But people being just a "thought leader in the space" is exactly the reason there's a bubble.
Bubbles are a lot easier to visualise from the outside.
jqpabc123
After the crash, tech "industry leaders" will struggle to explain why/how they were conned into believing that intelligence was a simple database function with some probability and statistics sprinkled on top.
Zealotux
I remain convinced the whole hype was a way to overfire after the big overhire.
toomuchtodo
They're still aggressively outsourcing to India, the Philippines, and LATAM under cover of AI to tighten the screws on labor costs. Domestic hiring that drags on is to pull in new employees at current lower market wages that will be sticky for some time.
mrguyorama
No they won't. They won't struggle to explain anything because in US business culture, nobody ever actually takes blame except underlings. Nobody ever even asks them to explain themselves. Even in public companies it seems like questions from shareholders that actually get asked in quarterly calls are vague humble brags. "What are we going to do about the problem of winning so hard" while they had record layoffs the previous quarter.
Those talking heads haven't had to mea culpa for : Hype about Hadoop, hype about blockchain, hype about no code, hype about the previous AI bubble, hype about "agile", hype about whatever JS script is popular this week, etc.
null
lbrito
But who's to say humans are any different than simple databases with probability and statistics firing neurons??
/s
naasking
> But who's to say humans are any different than simple databases with probability and statistics firing neurons??
Nobody has said they're simple databases, they would obviously be complex databases.
pera
I just don't get why did Altman had to hype this release so much, what was the plan?
Also, what was the deal with all those mysterious Star Wars pictures?
bgwalter
Initially politicians were responsive. In Feb. 2024 he sought trillions of investment to ramp up "AI" [1]. Then he got the White House announcement with Trump and Softbank for the $500 billion Stargate deal. The project has flopped, only one data center will be built.
So I assume he thought hype would work again, but people are beginning to scrutinize the real capabilities of "AI".
[1] https://www.wsj.com/tech/ai/sam-altman-seeks-trillions-of-do...
pj_mukh
I think the announcement was mostly a ploy to get OpenAI access to the White House and not much else (especially because Musk was already in there).
But they are clearly on their way to build 20 data centers[1]. OpenAI raising $500B over 10-15 years to build inference capacity isn’t really that hard to believe or that impressive at this point tbh. Like that could just be venture debt that is constantly serviced.
42lux
The only thing that crystalizes it that the guys in that one meeting were right... there is no moat. The author might be right but the problem will be oversupply.
aydyn
A comment in a previous thread stuck with me which said something like "AI is successful because nothing else interesting is happening".
That rings true to me and I suspect the bubble won't burst until something else comes along to steal the show.
walleeee
"something else" may be the bubble on whose back this one precariously sits, popping a little ways down the line
nabla9
Dot-com bubble is a good analogy.
Nvidia will be Cisco of this era. Cisco was the worlds most valuable company when dot-com bubble peaked, went down almost 90% in 2 years. There was lots of "dark fiber" all around (fiber optic cable already installed but not used).
I think OpenAI and most small AI companies go down. Microsoft, Google, Meta scale down, write down losses but keep going and don't stop research.
I hope AI bubble leaves behind massive amounts of cloud compute that companies are forced to sell at the price of the electricity and upkeep for years. New startups with new ideas can build upon it.
Investors will feel poor, crypto market will crash and so on.
https://archive.ph/2025.08.20-113134/https://www.latimes.com...