Hacker News Reader

Hacker News

Comment by bronlund | Hacker News Reader

Full thread

bronlund

No no no, don’t burst that AI bubble just yet. I haven’t finished all my side-projects.

View on HN

Once the bubble bursts we can finally sweep up the datacenter GPUs and jerry rig them to our home servers!

I literally can't wait.

After you upgrade your electric panel and cooling.

Winter is coming.

They will probably go to other data centers or company premises.

Maybe at first, but server hardware doesn't stay deployed tooo long and ends up liquidated. That was always a looming problem with this rapid buildout. Some hosts like OVH or Hetzner might swipe up some second hand gear, they're not afraid of renting old hardware. But eBay will be flooded once the DCs upgrade / downscale. And it wont be cheap at first either I bet. Everyone will try to cash in on the secondary market hype.

The government will just nationalize them and use all the compute for poorly defined military tasks

Or to further build out total domestic surveillance, like they've been telegraphing.

The top models still require 1T+ of VRAM. Even if prices go down, that's still gonna be very unaffordable.

The consumer-level services you've gotten used to will still exist no matter how hard the bubble bursts, if it ever does. Way too many players now.

Sure, but you'll have to pay for what it really costs

Inference will keep getting cheaper and cheaper though. Perhaps model releases will be fewer and farther between because these groups can't affording paying out a billion or more in training each generation

The chinese models are being trained for less than a million a pop.

Yeah, but Wright's law (cost of making the n^th something (like a token) being exponentially less than the cost of making the first) strongly suggests that post-bubble inference will be significantly cheaper the longer the bubble lasts.

Whether that's a good thing considering the other things those dollars could be going towards...

I mean I'm happy for better but it might start grounding the industry where 1.6% better on some benchmarks doesn't justify hundred million investments.

I have only ever paid per token for this reason: if I can’t generate sufficient value to cover the real cost I don’t want to invest in using it

I thought the incremental supply cost per token wasn’t that high, and the main expense for these companies was the training they do on top of that?

.. which will be the same you are paying today. Token prices are already above their operating costs.

If you're talking about free tiers, yes, that might change as marketing budgets will shrivel up.

If the capital cost gets written off, because it can never be recouped, then there’s only the operating cost left.

Suppose OpenAI goes bust tomorrow and all those data centres get sold for pennies on the dollar. Whoever buys them can operate them at cost.

Did internet get more expensive after the dot com bursted?

Yes! At first there free, yes free, ISPs. Then remember when news sites didn't have pay walls? When every site wasnt loaded with ads and trackers? When Facebook, Twitter, or linkedin provided open data apis or rss? The enshittification came for it all because the bills were due.

Use Ultra mode.

> No no no, don’t burst that AI bubble just yet. I haven’t finished all my side-projects.

You'll be fine; the GPUs will be sold off for pennies on the dollar, and if you can't run one at home there are plenty of people who will buy them to host for cost of hosting +5% markup.

Over last 3 years on HN I have seen such low quality comments : prophesizing the end of times - the bubble will burst and we will all be so happy after that.

Any tiny news article that indicates even a modicum of challenges for OpenAI will be met with slurry of such comments.

Perhaps it’s good to keep a good epistemic hygiene in all this. OpenAI isn’t going away anywhere soon. AI isn’t going away, in fact we haven’t even started yet.

> OpenAI isn’t going away anywhere soon. AI isn’t going away

You have conflated two completely unrelated concepts. LLMs aren't going anywhere, but what good does that do a company burning hundreds of billions to do 20% better than Chinese models trained with millions? The economics don't economic.

According to your argument, OpenAI should simply stop R and D which can result in massive jumps in performance because China may catch up?

What is your prescription if I may ask? Don’t invest in research? Let China do it?

It's far too late for a prescription now because they're already committed to hundreds of billions in spending they don't have, but the reason Chinese companies will win the long game is because they are serious and the Americans are deeply unserious. From the beginning, Chinese labs have viewed LLMs as software tools and developed efficiently. Conversely, Americans are selling a fantasy about creating the machine god if they just throw another hundred billion at it every few months. Altman, Amodei, and Musk are all pathological liars who have oriented their entire companies around deceiving investors and marketing hype rather than engineering principles. They are unbelievably successful at what they set out to do, but what they set out to do was not to build a long-lasting foundation for success.

They successfully turned the entire tech sector into a giant pyramid scheme. That's one hell of an accomplishment. I hope history forever remembers the names of everyone who aided and abetted them.

Calling OpenAI and Anthropic a pyramid scheme is absurd

Why do you think so? To me it seems like they actually fit the textbook definition very well. They're firms that require constant injection of massive amounts of new capital to stay solvent, with no clear path towards profitability. The only way anyone gets their money back is if more investors buy in. It would be easy to prove me wrong, all they have to do is start turning a profit. But they can't.

[edit] And worse, they've dragged major established players in the industry with them--Microsoft, Google, etc. So now an uncomfortably large fraction of the world's economy is resting on.. nothing. To be fair, I don't blame OpenAI or Anthropic for the bad behavior of the other tech giants. It's the entire tech sector that has lost their minds collectively. At some point making things that actually work lost out to fantastic delusions.

There's no should, only what economics incentivize. Right now we're not paying for the upfront training costs-it's great, the Millennial subsidy continues. But if, and big if right now, the infinite money font dries up and they have to recoup training investment direct from customers then that looks to be a huge price increase on the ground which makes cheap to train and good enough even more attractive than it already is.

> Chinese models trained with millions

I see you are still under illusion that Chinese models are trained with millions.

It is the α's and Z's brigading in with their over-emotional shortsighted groupthink.

1. GPT-4.5 launch. "AI crash is gonna lead to decade long winter." https://news.ycombinator.com/item?id=43206226

2. Claude Code limits tightened. A commenter expects the bubble to pop, while arguing AI will succeed long term. https://news.ycombinator.com/item?id=44599297

3. GPT-5 disappoints. "Teetering on the edge of a huge bubble pop." https://news.ycombinator.com/item?id=44966583

4. DeepSeek releases a cheaper model. A commenter expects excess data-centre capacity when the bubble bursts. https://news.ycombinator.com/item?id=45413548

5. AMD signs an OpenAI chip deal. A commenter predicts a bubble pop and a flood of cheap GPUs. https://news.ycombinator.com/item?id=45491514

6. Discussion of AI-assisted open-source contributions. A commenter says models must improve soon or the bubble will pop. https://news.ycombinator.com/item?id=45745326

7. Discussion of Opus 4.5 coding. A commenter advises using cheap AI tools before the bubble bursts. https://news.ycombinator.com/item?id=46521192

8. GitHub Copilot moves to usage-based billing. "The bubble has burst." https://news.ycombinator.com/item?id=47929404

9. DeepSeek runs on one AMD accelerator. A commenter predicts a bubble pop will flood the hardware market. https://news.ycombinator.com/item?id=49166790

10. Same DeepSeek thread. "AI is overvalued, so it WILL pop." https://news.ycombinator.com/item?id=49167787

Edit: more examples

1. AI on an old CPU: coding gains don’t justify investment; bubble will burst. https://news.ycombinator.com/item?id=48938412

2. Nvidia–OpenAI deal stalls: GPU bubble, inflated demand. https://news.ycombinator.com/item?id=46834749

3. Lisp machines retrospective: AI bankruptcies and another bubble. https://news.ycombinator.com/item?id=45990309

4. Nvidia customer concentration: AI bubble will pop despite useful technology. https://news.ycombinator.com/item?id=41411258

5. DeepSeek open-source announcement: inflated AI valuations will collapse. https://news.ycombinator.com/item?id=43126535 https://news.ycombinator.com/item?id=43126619

6. OpenAI–AWS deal: spending commitments could bring everything crashing down. https://news.ycombinator.com/item?id=45802550

7. Anthropic funding: final big push before the bubble bursts. https://news.ycombinator.com/item?id=45105333

8. Enterprise AI adoption: disappointing returns will pop the bubble within two years. https://news.ycombinator.com/item?id=48025025

9. OpenAI cash burn: railroad-style bubble and massive investment downturn. https://news.ycombinator.com/item?id=46439964

OOC did you have this list prepared? You posted it very quickly as a response

Like I said, brigading botlike behavior.

Maybe it’s their day job… they seem to be the kind of commenter that doesn’t have any interest outside of LLMs.

At this point AI company valuations only make sense if each of them captures most of the value of the entire IT sector. Soon. If that doesn’t happen, it’s a matter of time before reality catches up, but how much time? Who knows. It could be years still.

Or AI could in the next few years generate more value than the whole IT sector a few times over. That would be cool.

I think this is incorrect logic. OpenAI’s valuation doesn’t come from the sum of other tech company’s valuation.

You do know that all valuations can go up together right? It’s not zero sum. OpenAI can create trillions in value not by taking it from somewhere but by creating it from nothing.

You kind of proved his point about brigading with this giant link dump.

It's a reaction to the constant drum beat of doom marketing:

- "our product is too dangerous to release but we can't be bothered to prove its capabilities working in public hacking competitions" - "our product is going to kill everyone" - "our product is going to take all the jobs" - "we have a $40T addressable market" - "in a few days AI will be able to improve itself without human intervention and it's capabilities will hocky stick to infinity!!!"

Followed by absurd financials that spin massive losses as "getting in on the ground floor" before historic profits arrive based on the doom marketing above.

No one is saying AI is going away soon). But OpenAI and Anthro will go the way of Netscape when the market finally stops blindly accepting the doom marketing. Anyone with eyes can see LLMs will create historic increase in productivity among knowledge workers AND it will be a commodity. The massive profits frontier labs need to justify valuations are not coming.

There are AI bears and AI bulls. It's easy to cherry pick extreme and clearly wrong statements from each. But if you actually believe the bears are the more extreme/wrong overall you just aren't paying attention to what the bulls are saying.

At some level this all just comes off as post hoc justification for a really bad cortisol addiction.

Why are we keeping score in a game with completely arbitrary rules? The polarity is the hallmark sign for me of someone who enjoys a ride that certain neurotransmitter. I used to commute to and from work 2 hours every day. I know what it's like to be addicted to this stuff.

In other contexts people would ask me not to cherry pick extreme statements like “OpenAI and Anthropic will go away”. So I don’t have to cherry pick. I just have to pick what you said.

Sometines it truly feels like titles of YouTube videos.

You know "we haven't even started yet" is also prophesying, right?

Can also be read as observation, as I have observed that many colleagues haven't started yet using AI on a daily basis and I myself is still using methods from months ago (no agent orchestration).

Sure, but both can be true. The internet bubble bursting did not kill the internet. All that investment in severs and fibre was still there, and still got used. A lot of investors lost their shirts, but the Internet future still happened.

OpenAI going bust would not cause those data centres to cease to exist, they’d still be there just owned for cheap by someone else that can run them at cost.

A crash would drastically cut investment and research funding, but research would still happen. New companies would rise from the ashes of the old. It might still trigger a recession though.

> OpenAI going bust would not cause those data centres to cease to exist, they’d still be there just owned for cheap by someone else that can run them at cost.

Someone would have to see value in that. Right now the value prop of AI is that maybe someday it'll get better and we'll be able to build useful, profitable consumer products on it. That's not really a great investment thesis, unless you're drunk on the hype.

Now that the market is sobering up a bit, will operating a "cheap" GPU datacenter at cost be worth anything? Not "future value", but present value. Can you turn a healthy profit running a GPU datacenter today? I doubt it.

At the risk of goomba fallacy

1. Guys so AI is a bubble but that doesn’t mean it’s not useful, just like dot com bubble

2. “Someone would have to see value in that. Right now the value prop of AI is that maybe someday it'll get better and we'll be able to build useful, profitable consumer products on it”

I don't understand, could you please explain?

> That's not really a great investment thesis, unless you're drunk on the hype.

To be fair it is very visibly getting better basically nonstop in the last 2 years at least.

I'll concede that point, but it's still not enough to justify buying a used GPU datacenter on the cheap. To do so you need to believe that by powering up and running all those GPUs you will be able to turn a profit before you go insolvent. Or failing that, you need to be able to con enough investors into believing it, and then somehow make it happen before they stop believing. So far the AI industry has been very good at conning investors, and cataclysmically bad at generating profits.

So if you're in the market for a used GPU datacenter even at fire sale prices you better have a solid plan to profitability. So far, it doesn't actually seem like there's anything you can do with those GPUs that will get there in any known or even guessable timeframe. That makes it a really fucking dumb idea lol.

Reply on news.ycombinator.com