75% of the US stock market growth of the past few years has come from AI, but that was built on a promise. That AGI was just around the corner. Now companies like OpenAI are pivoting to selling ads and porn, a sure sign they do not think AGI is about to arrive.
If the AI bubble bursts, what happens afterwards?
I'd guess there will be a backlash against Big Tech. Perhaps 2025 is the high watermark of their political influence. AI is already broadly unpopular with many people, and that will only grow when they see if it has crashed the economy and their pensions.
AI, the technology, will still be with us, even if many of today's AI companies won't be. Even without AGI, it still has the potential to be transformative and economically disruptive. Rules-based businesses — legal, accounting, transaction, and claims processing could all be made obsolete. Humanoid robotics and self-driving, both aspects of AI, will eventually replace millions of human workers.
The AI bubble crashing would mean a recession. Recessions mean companies cut workforce numbers. Ironically, this time, they will be able to replace many of those people who were let go with AI. So the crash that AI causes will also speed its adoption.
If the AI bubble bursts, what will come after?
byu/lughnasadh inFuturology
37 Comments
If AI works well enough to replace workers, how is there a crash? Productivity gains would be big.
And AI is a lot more than LMMs.
Re-selling high end processors.
When the dot com bubble burst, Amazon went on to dominate all commerce.
A bubble bursting wipes out all the fake businesses clearing the path for productive use of AI.
Go long on Jacob’s Ladders.
All the evil that’s taken power and high level management positions will buy them as their Zoom backgrounds
Growth will not be partially on employment numbers anymore. Ironically it will most likely allow AI and automation to near fully take over production.
The bad times are coming folks.
Some people will lose their jobs. Others will lose their savings. There will be a recession as the economy balances out. A few AI companies will survive and dominate their niche markets. 5 years later everyone will laugh about it and make jokes. 10 years later the next bubble will start to inflate and the cycle will repeat.
There’s nothing new except the widget. It’s the same song and dance.
The ai bubble is going to burst, but that won’t end AI. Someone is going to be left standing, maybe several companies. It will wreck the economy for a while, and we’ll have to add that to people losing jobs to AI and probably increasing climate change. It’s going to be rough, but again, someone will survive. Probably not me
After the dotcom bubble there is still .com in existence, and so it will be with AI.
The poor will get poorer, the rich will be mildly inconvenienced then dry their tears with a wad of cash.
> legal, accounting, transaction, and claims processing could all be made obsolete.
I seriously doubt this. We’ve already seen multiple law firms get in trouble for using AI and having it cite cases or laws that don’t exist or make up quotes. It hallucinates too much to be used in anything that requires a high degree of accuracy and if you have to double check every single thing it produces what’s the point of it? AI experts have said we can never get rid of the hallucinations with LLMs so that’s not going away. You’re still paying someone to spend just as much time double checking it as you would have to have them do the work in the first place.
I think they are actually after the porn market and it will probably just about keep a few of them afloat.
Honestly the amount of people using ChatGPT and blindly trusting its efficacy at completing any task is telling me that it’s unlikely to burst because even if it’s objectively shit people believe it’s amazing and that’s what matters at the end of the day.
Beyond the AI bubble of course there’s the tech bubble and the market’s overall tendency to price in farther and farther out into the future. That’s never a good thing but it’s been going on long before AI.
AI “living up to its expectation” also means cutting the workforce. There’s so much money invested, because it promised cutting workforce
Hate to say it but the US is already in recession. It’s being propped up by circle investments in AI/Big tech. Once that bubble goes, it will drag down the US and the rest of the world with it. Nothing good will come from this. It will make 2008-2011 seem like holidays in comparison.
> I’d guess there will be a backlash against Big Tech.
It should have happened a long time ago with Microsoft Windows, shitty evil enshittified smartphones and social media platforms. But no, it does not happen. I believe it is mostly because most people are WAY below your level of intelligence. Just meet random people and look at how they use tech. There is very little understanding going on. Just mammals with brainrot brains manipulated by high-tech mind-control corporations. Musk is a nice guy, etc.
Hopefully ssds will start getting cheaper again
AI research will continue, but with less funding. They will substitute cleverness for money. The irrational investment frenzy is driven by hypemongers and pundits, and appeals to investors desperate to find “the next big thing”. This reminds me of the military saying “generals plan to fight the last war”. Investors saw the riches generated by the PC and internet revolutions and hope the AI revolution will make them rich. I suspect that most will not get rich
“AI, the technology, will still be with us, even if many of today’s AI companies won’t be. Even without AGI, it still has the potential to be transformative and economically disruptive. Rules-based businesses — legal, accounting, transaction, and claims processing could all be made obsolete. Humanoid robotics and self-driving, both aspects of AI, will eventually replace millions of human workers.”
So what is the AI bubble bursting to you, just a handful of prominent AI companies’ stock loses value? To me, the AI bubble bursting is AI never gets good enough to replace more than a few hundred thousand workers in the US. We don’t need AI to hit AGI to put millions of jobs at risk, as you note, and presumably that means someone is making and profiting from the AI that lets companies do without those workers.
Now, an alternate “handful of prominent AI companies’ stock loses value” scenario is we have a series of breakthroughs letting good enough open source AI models run on powerful but affordable personal computers so giant server farms aren’t needed for most AI applications (writing code, making videos, etc).
Plenty of use cases for AI, but the revolt against content is encouraging. However, AI improving workflows is here to stay- AI creating significant things from scratch has issues because it doesn’t train on proprietary secrets for the most part. It’s the equivalent of trying to build a strategy from half hearted conference panels.
If? I’d say it’s inevitable the cost alone of having to build the servers for AI and then on top of that the cost of cooling them to make sure they don’t overheat. Also the intelligence isn’t where it needs to be to integrate it in meaningful way. the fact they’re having to pivot to porn already says it all.
Ai and its developments lately have been a good that I hope progresses in the future, but it’s not going to be what tech companies and shareholders want in 2-4 years, rather in 30. The problem is everyone wants the results now, and cause that’s not gonna happen, people are gonna get impatient and throw a tantrum which will tank the market.
I challenge this projection. Where will money evaporate when ai gets shaken up. I can see some fallout but to the doomsday extent portrayed in this post seems really far fetched.
If it bursts before we build out the power to support it, not much.
If we build up the grid and additional renewable energy then we begin the great transition.!
A demand for workers who integrate with AI.
If AI can’t go it alone then the next step is people who can work with it fluently
Typewriter skills being replaced with word processor skills
Computers (the mathematical career) being replaced with programmers
What is coming behind it is massive success for companies with serious, meaningful, working AI solutions. The companies that have been (and still are) bullshitting by just adding the term”AI” into their existing blurb will get deservedly punished, but that doesn’t change the fact that it will be revolutionary. It just won’t happen as fast, or as easily, as a lot of people have made out.
The poor will pay for the burst, the rich will get rich of this as well.
AI is sooooo great!
I have so many friends now that I can hang out with in the meta verse. I even have an AI girlfriend that is super hot! And, all the mega corps are harvesting my data and psyche, but I trust them, they wouldn’t do anything bad with my data, right?
Look at how great the economy is doing as well! OpenAI is making so many circular deals with so many tech companies and increasing shareholder value. How noble of them to prop up the economy while building technology to cut jobs. Plus, they’re doing it all for free! They deserve a nobel prize as the greatest company in the world!
Even kids in schools feel less lonely and can have AI tutors that ensure they’re addicted to this life changing tech, that is manipulating them to be the best version of themselves.
What about energy use? 15 gigawatts of compute power dedicated to training AI models! No way! Such an amazing use of our infinite fossil fuel resources! What better way to spend all that energy than to to build tech that is going to make all our lives better.
Great time to be alive.
Oh, wait.
Robotics (with AI).
Cars, drones, humanoids, whatever the fuck, the AI won’t be anymore the buzz word and we’ll see a new generation of smart well mannered smart vacuums who also tell us how to spark joy in our home.
If you think any of those industries can be replaced by an LLM or what passes for “AI”, I’ve got a bottom bridge to sell you.
Doesn’t open ai have among the biggest censorship on the internet?
How do they sell.porn?
Since all big players in the game have several other profitable businesses apart from AI there will be no big exploding bubble, only a correction of expectations
language is used deceptively and isn’t precise. Wittgenstein is on the case.
Almost all S-curves come with a bubble and a burst and after the burst the winners are left to thrive. Before the fact a lot of betting on a lot of companies takes place, they don’t all win.
I think you underestimate how significant mag 7 is to global internet (well minus Tesla). They are the internet. AI is being funded by mag 7– and they are massively profitable. The AI companies are not [pets.com](http://pets.com) . They have the warchest to spend it. The other thing people are over looking is every nation-state needs to spend massively on AI.
I think the other thing people are overlooking is a lot of the job elimination is more likely abroad overseas offices first. The American worker + AI will likely take the jobs of those satellite offices sitting in Ireland, Netherlands and Singapore. The back office processing and customer service jobs in India and Philippines likely gets killed off. That GDP shifts over to the US.
Big tech is US hegemony. They are not going anywhere.
Nothing. The tech bubble burst in the early 2000s and didn’t stop the web. It just changed how it was building out. It will just change how it’s building out. The “Wild West” feeling will go away.
AGI could very well arrive and a crash occurs anyways. The basis of the crash is economic and psychological, not technological. I broadly agree that a crash would (will rather, we’re likely due for a recession) speed adoption anyways though.
AI is the 3D TV of this decade. Only it will have much shittier after effects.