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The AI bubble is popping; we just don't know it yet

https://www.theregister.com/ai-and-ml/2026/08/03/the-ai-bubble-is-already-popping-we-just-dont-know-it-yet/5282004
35•Bender•53m ago

Comments

simianwords•37m ago
> I caution anyone looking at API prices: they dropped the price, but is it actually less expensive?

> Yeah, they dropped the price, but count the number of tokens you're tossing into it and see if it's actually cheaper. It's good for marketing, but the rub is how much you're actually using.

The level of discourse is so horrible now, I don't have words. Are these the ones making predictions on AI bubble?

empath75•33m ago
Of course, the price of tokens going down makes it cheaper. You can now afford to throw millions of tokens at solving a problem that would have been impossible for AI to solve at all a year ago for any price.

People completely lack imagination about this stuff. The main problem right now with AI isn't even AI successfully producing code at a reasonable cost, it's human coordination and review that is the bottleneck.

InsideOutSanta•16m ago
This is poorly stated in the podcast, but the underlying point is correct: while cost-per-token is going down, overall token use is way up. This is causing the cost of using LLMs in corporations to skyrocket.
feverzsj•36m ago
It's obvious. Most people were expecting this.
sysguest•32m ago
well if bubble pops, everyone will die EXCEPT google

UNLESS openAI/etc actually succeeds in making AGI that never hallucinates and goes over the current LLM limitations

as for google... well they own the web

(+google has plenty of other revenue sources, so it can just pay out its AI survival)

if you're a website owner, would you welcome chatgpt/etc's data-collection bots?

but... as for google's bots... you need your website to be on the Google search results...

bzzzt•24m ago
> well if bubble pops, everyone will die EXCEPT google

Also, possible Apple since they haven't gone into deep debt to finance 'AI buildout'.

gizajob•20m ago
They’re also primed to capture the on-device AI market in 3-5 years time when a “good enough” model can run locally.
brazzy•15m ago
Do they even have any direct exposure to the whole AI bubble?

If not, I'd say they don't even count in the "everyone"-

tremon•13m ago
I ecpect Nvidia to survive the crash on its own, and everyone else except Softbank to be bailed out with US taxpayer money.
thepasch•9m ago
techpression•27m ago
> The same thing happened with their massive investment in Anthropic. They accounted for $53.4 billion due to deals with Anthropic last quarter. He said if you follow one Anthropic dollar through the earnings release, it's counted in AI business revenue, chips business, and AWS segment revenue.

That is insane if that is true, is that even legal?

cmiles8•25m ago
It is. However remember that when the bubble pops it all works in the reverse direction too. Suddenly you have to mark down investment losses, missed revenue, and written off commitments.

Companies can go from looking really good to a complete financial mess almost overnight when all that leverage and self-reinforcing stuff unwinds. See last weeks headlines for one such scenario.

AussieWog93•24m ago
The title's clickbait (from The Register, of all people - colour me shocked!).

There's nothing really groundbreaking at all in there, just "chips are expensive, and open weights models hosted locally in enterprise could displace Claude/GPT"

cmiles8•18m ago
Outside a relatively small world of circular investment and FOMO feeding FOMO the general consensus seems to be “let it burn.”

It appears very unlikely we will ever see an IPO of OpenAI. Anthropic appears less doomed, but still iffy at best. Tons of other large, but little discussed, AI startups are just dead-companies-walking at this point.

The likes of AWS are showing good headline numbers but are taking out massive debt to build infrastructure that looks increasingly unneeded. Those with capacity are looking to offload it, quickly. Yes AWS has “committed contracts” for this capacity but if those commitments are with shaky AI startups then it’s mostly just fluff PR and these hyperscalers will get left holding the bag on all this debt.

inigyou•7m ago
It's holding up the entire US stock market and therefore the entire US economy and the dollar value. You probably don't want this particular Atlas to shrug.
delfinom•5m ago
It's inevitable though.
lluisantoni•17m ago
There is something I have been pondering recently. If we compare the cost of AI subscriptions (let's say Claude's 100/month) to a median developer salary (let's say 100k/year to 200k/year), the difference is orders of magnitude. This fills like a gap that needs to close. I suspect llms are too cheap right now but will raise their prices to a point where only big companies will be able to afford subscriptions to use them. I think soon we will see models that are only sold at very high prices.
terabytest•11m ago
LLMs are not as cheap on enterprise plans.
lluisantoni•10m ago
Also, something else to add. At first I thought no one wants to build data centers in hotter areas in the middle of deserts (many places in the American continent). So nobody would spend money building a data center in the Chihuahuan Desert for instance. However, a game of latencies will either require cover llm access from these areas, or make people move closer to the other data centers. In the former, llm prices will go up; in the latter, there will be a migration towards data centers that increase the price of the areas around.
KeplerBoy•8m ago
Who cares about a few ms more latency on an LLM API? Maybe for voice, but most other use-cases are quite latency insensitive.
cracell•9m ago
I don't understand this argument.

Go to OpenRouter and look at all of the unsubsidized providers.

digitcatphd•16m ago
I would argue we still have not even really gotten started.

What do we have in the decade ahead? Robotics in every household, models 10x+ faster and more intelligent than today.

Really no significant impact in life sciences, R&D, and 'offline' world / robotics today as of yet, which is where most of the value will live.

Cthulhu_•12m ago
Robotics in the household has been the realm of science fiction for decades and it still hasn't happened. We get dedicated, compact machines like dishwashers and washing machine/dryers, that's it. Most recent innovation has been the automatic vacuum.

If you want someone else to do household chores, hire someone. You can pay someone to do your house chores for years for the cost that these things will have initially.

Aldipower•12m ago
The bubble pops in the US pops maybe. China is only limited by chips, not costs.
Nvidia has hordes of raucous gamers on the prowl waiting to tear their chips out of their hands the moment hyperscaler demand falters; plus, China has made sure there will always be plenty of open models to run for hobbyists and neoclouds, even if training compute were to drop off a cliff. They'll be just fine.
trashb•7m ago
> but... as for google's bots... you need your website to be on the Google search results...

Why? Depends totally on what kind of website you are running.

KeplerBoy•9m ago
Open weight models tell a different story. Inference is not that much more expensive than what a 100$ plan would allow and will only get cheaper (for current capability models of course, frontier not so much).
lopis•6m ago
> 100k/year to 200k/year

Is this range just Silicon Valley or what is this? Even including just Europe, you're looking at a lower bracket of 10k. If you expand to the rest of the world... Or do you think rich cities in the USA, where developers make 100k+ per year, can alone sustain this industry?

NoDodgeQuestion•5m ago
This is something I have been pondering recently. If I compare the cost of a plunger ($23.99 on Amazon) to a median plumber salary ($62,970 per year per BLS), the difference is orders of magnitude. This feels like a gap that needs to close. I suspect plungers are too cheap right now but will raise their prices to a point where only big companies will be able to afford subscriptions to use them. I think soon we will seen plungers that are only sold at very high prices.

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