The tech billionaire Hemant Taneja admits that AI is a bubble. In fact, he welcomes it: “Bubbles are good,” Taneja, the CEO of General Catalyst, a venture-capital firm, told me in an email. If AI comes crashing down, it will lead to “some spectacular failures,” he said—companies will go under and people will lose their jobs—but that’s a price worth paying for “enduring companies that change the world forever.”
His view is widespread in Silicon Valley. Some, such as Nvidia CEO Jensen Huang, reject the notion that their companies are overvalued. But many of the wealthiest and most powerful people in tech are embracing the idea of an AI bubble. Jeff Bezos has argued that AI might be a “good” kind of bubble. Sam Altman has made similar comments, predicting that AI will be a “huge net win for the economy” even if “a phenomenal amount of money” is lost along the way.
Indeed, a phenomenal amount of money is at stake: OpenAI, which is still far from profitable, is currently worth more than Toyota, Coca-Cola, and Disney combined. This year, Big Tech plans to spend some $650 billion on the AI build-out—a sum that far exceeds the GDP of most countries. Investors are banking that AI will spur a productivity boom and deliver unimaginable corporate profits, but that future could be far off. If the spending dries up first, the bubble could pop—perhaps dragging the rest of the economy down with it. Nonetheless, Silicon Valley thinks that the present mania will eventually pay back its returns through scientific discovery and economic growth. “Stop trying to make bubbles go away,” as the entrepreneur James Thomason recently wrote. “The benefits of innovation outweigh the costs of volatility.” In other words: Be grateful for the bubble.
I’ve never heard of this guy before but fuck him. He doesn’t even consider the global fucking impact of (another) recession that they’re intentionally causing on normal people.
If it weren’t for the bubble, we’d already be in a recession.
Can’t read the whole article because of paywall.
But the implication that AI is a “good bubble” is pretty rich, as I think that the degree at which they’re ripping people off left-right-and-center by stealing their information will become less palatable to the US government once it’s clear that they caused the market to tumble. They’re literally dependent on the idea that people think AI is “irreplaceable” to the daily lives of most people in order to withstand a crash in terms of political capital, which I think they’re very far from establishing at this point.
The argument that the bubble is good because some people will become really rich while a lot of people suffer just seems genuinely stupid.
If you’re talking the US government, then no, they don’t need political capital from the people, they just need capital capital and they can use that to swing elections and bribe politicians.
Regardless, some AI companies will inevitably survive. It is legitimately useful in solving a ton of problems that were near impossible before. Literally this xkcd. Now it’s not “I’ll need a research team and five years”, it’s “sure, easy API hit, we’ll just have to manage cost / use”, in the future, it will be “sure, we’ll just add a background task client side”.
It’s a good bubble! Like those little bubbles you get in champagne, except this one’s the size of the entire western hemisphere. It’s so fizzy with innovation it’s going to be worth every trillion dollar bill it incinerates. Your investments might end up worthless but you’ll have the satisfaction of knowing you helped bring about the birth of General AI, who will be along any minute now, the superintelligent robotic overlord that will soon rule over your life. It’s going to be so amazing it’ll be worth literally all the money in the world. Stop trying to make bubbles go away. Stop trying to think rationally. The AI will do that for you.
