There’s no question we’re in a “GenAI” bubble, the only question is how big of a smoking crater in the ground is going to be created when this thing pops.

The tech isn’t going away, and is cool/useful, but from a business standpoint this whole thing looks like a dumpster fire burning next to a gasoline truck. Right now VC FOMO is the only thing stopping all that from blowing up. When that slows down buckle up.

It's 1999 again.

Feels like 2000 all over again.

The arms race to throw money at anything has "AI" in their business name is the same thing I saw back in 2000. No business plan, just some idea to somehow monetize the internet and VC's were doing the exact same thing. Throwing tons of good money after bad.

Although you can make an argument this is different, in a lot of ways, its just feels the same thing. The same energy, the same half baked ideas trying to get a few million to get something off the ground.

I think vibe coding will get good enough that things like vercel's "0 to POC" thing are going to stick around.

I think AI-powered IDE features will stick around. One notable head-and-shoulders-above-non-AI-competitor feature I've seen is "very very fuzzy search". I can ask AI "I think there's something in the code that inserts MyMessage into `my.kafka.topic`. But the gosh darn codebase is so convoluted that I literally can't find it. I suspect "my", "kafka", and "topic" all get constructed somewhere to produce that topic name because it doesn't show up in the code as a literal. I also think there's so much indirection between the producer setup and where the "event" actually first gets emitted that MyMessage might not look very much like the actual origination point. Where's the initial origin point?"

Previously, that was "ctrl-shift-F my.kafka.topic" and then ask a staff engineer and hope to God they know off-hand, and if they don't, go read the entire codebase/framework for 16 hours straight until you figure it out.

Now, LLMs have a decent shot at figuring it out.

I also think things like "is this chest Xray cancer?" are going to be hugely impactful.

But anyone expecting anything like Gen AI (being able to replace a real software engineer, or quality customer support rep, etc) is going to be disappointed.

I also think AI will generally eviscerate the bottoms of industries (expect generic gacha girl-collection games to get a lot of AI art) but also leave people valuing the tops of industries a lot more (lovingly crafted indie games, etc). So now this compute-expensive AI is targeting the already low-margin bottoms of industries. Probably not what VCs want. They want to replace software engineers, not make a slop gacha game cost 1/10th of its already low cost.

I'm not shocked. It reminds me a bit of the way some people talk about their personal investing. They'll talk about wins (often exaggerated) and leave out the travails and failures. Next think you know, your friend is telling you about their new day trading plan. :)

Unfortunately, the same thing is playing out here. Nobody likes being the guy that points out the gains are incremental when everyone is bragging about their 100x gains.

And everyone in the management side starts getting, understandably, afraid that their company will miss out on these magical gains.

It is all a recipe for wild overspending on the wrong things.

Well, at least AI is going to be better than the blockchain hype. No one knew what “blockchain” was, how it worked, or what could be used for.

I had a very hard time explaining once you put something in the chain, you can’t easily pull it back out. If you wanted to verify documents, all you have to do is put a hash in a database table. Which we already had.

It has exactly one purpose: prevent any single entity from controlling the contents. That includes governments, business executives, lawyers, judges, and hackers. The only good thing is every single piece of data can be pulled out into a different data structure once you realize your mistake.

Note, I’m greatly oversimplifying all the details and I’m not referring to cryptocurrency.

Article doesn't understand that cutting "between five and 20 percent of support and admin processing" is really valuable, instead it seems to want to dismiss that as a dull failure.

Business process outsourcing companies are valued at $300bn according to the BPO Wikipedia page. So 5%-20% of that is 15-60bn. So even if we're valuing all the other GenAI impact at zero the impact on admin and support alone could plausibly justify this investment.

What arrogant and cynical way of looking at business operations. You don't know how anything interesting turns out in the future. You make educated guesses and those cost money. When you run a business, everything costs money. But that is not "lighting money on fire", that is how all learning happens.

If anyone thinks they have figured it all out, stop blabbering around. Short the market.

$40B seems very low. I wouldn't be surprised to find the annual corporate churn on innovation / transformation / IT/IM new initiatives whatever you call it, is way higher than that. There's some subset of corporate spend that's just chasing new stuff and keeping up on what the hot topics are.

I think there is a bubble, if it's really just $40B maybe I'm wrong.

There is no real source for this data other than "executives" that only think in numbers and of course those are the types that collude with their CFOs to come up with great ways to get giant tax write-offs. I would imagine they are not "burning billions" they are coming up with new ways to describe how they ALREADY burned billions.

Wait until someone tells them the ratio of public cloud vs self-hosted.

Veracity of the article’s numbers is obviously an issue but the thing that’s interesting is that this number isn’t about investment in AI infrastructure or models. It’s money spent on consuming and using the models. Which puts the infra spend in an even starker light. If people don’t feel like they are getting value out of this spend at the peak of hype that’s not a great sign.

Yes and no. Its clear from the article that there is industrial integration. But only workers who are very highly skilled at utilizing the technology--and there are very few of those--are seeing benefits, and only managers who have experience effectively utilizing it are adopting it well. Time will tell, but yes, most projects aren't going anywhere, because they make the fundamental error of thinking that its equivalent to a human in terms of intelligence.

Apparently the MIT Research Paper link is broken (probably removed due to traffic).

Here is the Archived Version: https://web.archive.org/web/20250818145714/https://nanda.med...

There is a lot of organizational inertia to overcome, but it is happening. The first big wave of savings we are seeing in my org (which deals in physical goods, not software) is replacing very expensive enterprise software with in-house developed replacements.