Summarizer

If anyone was around for the dot-com bubble any company internet related or with a web like name was irrationally funded, P/E didn't matter, burn didn't matter, product didn't matter. AI has all the same markers of a the dot com bubble and eventually venture capital will dry up and many AI companies will go bust with a few remaining that make something useful with an unmet niche.

"The Web" and "E-Commerce" ended up being quite gigantic "unmet niches" though!

If smth is bubble it does not mean that said smth has no value. It just means that there is over investment and thus inefficient investment. Like housing bubble - nobody argues that houses are not needed and are not big part of economy.

Yes, but only 15-20 years later in the extent expected for 2000. The technology wasn't there yet, just like with LLMs.

Right, one could say it was actually the smartphone that made the Internet as successful as it was being pitched to be in the late 90’s.

The technology was there all along, and it's ironic that we're discussing it on this website of all. Look up ViaWeb.

The tech was there. The websites worked fine. The issue was number of internet users was too low. Look at number of internet users today vs 1999…

Yes, but generally not for the companies who were closely involved in the dot-com bubble; Amazon is probably literally the only exception of any significance. And, well, not all bubbles go as well as that. See the cryptocurrency one, say. Or any of a number of _previous_ AI bubbles.

The startups/businesses that provided value survived the bubble bursting.

I had a job at a small investment firm at the time in college and to me it is nothing like the dotcom bubble. The dotcom bubble was the "new economy", the old economy had changed forever and was dead. No one thought it was a bubble. Even when the bubble popped it took until 9/11 to wake us up from the mass hysteria. I can't think of another "bubble" that practically everyone thinks we are in a bubble. To the point that I think many would find it irrational to believe we are not in a bubble. That is not what bubble is. A bubble is the madness of crowds, not the wisdom of crowds and the crowd certainly believes we are in a bubble.

25 years time. "I remember the LLM bubble, everyone knew we were in a bubble but they carried on as if the music would never stop. Don't worry, our situation is nothing like that, there is no talk of a bubble."

Have you considered that your investment firm and other peers at the time were in an information bubble? In fact outside of tech if the dotcom bubble wasn’t being discussed it’s because most folks—being not, or barely, online yet—weren’t paying any attention to it per se . The bubble they cared about was the broader stock market bubble, which was definitely widely perceived as a bubble.

> practically everyone thinks we are in a bubble Very untrue, economy doesn't happen on online forums in echo chambers but out there. Every major company invests into AI however they can for the classical FOMO emotion. This is how movers and decision makers think. No CEO thinks - this will crash, so lets invest into it massively and spread our company finances more thinly when the SHTF comes.

"the old economy had changed forever and was dead." Ehem - what is the difference compered to now? Wasn't programmers obsolete by 6mths ago and nobody would work so we do need UBI? However your point that if everybody are thinking there is buble there is none is valid. Ironically your whole post undermine this point. And you are not alone in your analysis. General bubble wisdom is not settled as one might think. Plus famous Alan Greenspan "irrational exuberance" was in 1996. And AFAIK in 1999 everybody know there is buble but it busted only in 2000. On top of that I have seen overlying plots of stock prices now and before dot com suggesting there is 1-2 years of increases still to go.

> Ehem - what is the difference compered to now? Wasn't programmers obsolete by 6mths ago and nobody would work so we do need UBI? You're applying an arbitrary time constraint to the realization of AI's promise in order to rubbish it. This is a logical mistake common among critics: not yet, so never. It doesn't seem as if there is a near limit to the tech's development. Until that changes, the potential for job wipeouts and societal upheaval is real, whether in 5 or 50 years.

Sorry but that was not my point. My point was refuting of the thesis (in the comment that I am replying to) that nobody was making grand claims about AI contrary to grand claims about internet pre dot com. Obviously in both cases there were/are grand claims made.

Doesn't mean it's a valuable take. It doesn't even significantly matter whether it's a bubble or not, but whether its a "bad" bubble. I think Steve Eisman (of housing bubble fame) recently made the argument that it's probably a bubble, but it doesn't seem to have the hallmarks it would have to turn it into a crisis. e.g. no broad immediate exposure for the general populace (as in housing/crypto bubbles).

> It doesn't even significantly matter whether it's a bubble or not, but whether its a "bad" bubble. there are billions and billions of dollars invested in there -- it matter significantly to a lot of people. the bubble popping may trash the US and possibly global economy. "it doesn't matter" has to be one of the worst AI takes I've seen...

> So, this is how I’m thinking about AI in 2026. Enough of the predictions. I’m done reacting to hypotheticals propped up by vibes. A lot of the predictions come from interviews and presentations with top tech executives. Their job is to increase the perceived value of their product, not to offer an objective assessment. I've gotten a lot of value out of reading the views of experienced engineers; overall they like the tech, but they do not think it is a sentient alien that will delete our jobs. I have also gotten a lot of value out of Cembalest's recent "eyes on the market", which looks at the economic side of this AI push.

Elon proved that "corporate puffery" is more valuable than any product you make or could make. The job of CEOs now is to generate science fiction fantasies and sell those to the public.

No one said anything about lying. Their job is to make the company successful. Part of success is raising funds and boosting share price. That is their job, and how do you imagine they can do that? Sound kind of glum and down about the company prospects? Do not make be laugh. Even if the company is literally haemorrhaging cash and has < week of runway left, senior executives are often so far up their own basses and surrounded by yes men, that they often honestly believe they can turn things around. Its often not about will-fully lying. Its just delusional belief and faith in something that is very unlikely. (Last minute turn arounds and DSA do exist, but like lottery players, seeing the very few people who do win and mimicking them does not make you into a winner; most of the time)

I think we are the stage of the "AI Bubble" that is equivalent to saying it is 1997, 18% of U.S. households have internet access. Obviously, the internet is not working out or 90%+ of households would have internet access if it was going to be as big of deal as some claim. I work at a place that is doing nothing like this and it seems obvious to me we are going to get put out of business in the long run. This is just adding a power law on top of a power law. Winner winner take all. What I currently do will be done by software engineers and agents in 10 years or less. Gemini is already much smarter than I am. I am going to end up at a factory or Walmart if I can get in. The "AI bubble" is a mass delusion of people in denial of this reality. There is no bubble. The market has just priced all this forward as it should. There is a domino effect of automation that hasn't happened yet because your company still has to interface with stupid companies like mine that are betting on the hand loom. Just have to wait for us to bleed out and then most people will never get hired for white collar work again. It amuses me when someone says who is going to want the factory jobs in the US if we reshore production? Me and all the other very average people who get displaced out of white collar work and don't want to be homeless is who. "More valuable" work is just 2026 managerial class speak for "place holder until the agent can take over the task".

It’s the honeymoon period with crack all over again. Everyone feels great until their teeth start falling out.

I don't see how AI can bring about 10%+ annual economic growth, let alone infinite abundance, without somehow crossing the bit-to-atom interface. Without a breakthrough in general-purpose robotics - which feels decades away - agents will just be confined to optimizing B2B SaaS. Human utility is rooted in the physical environment. I find digital abundance incredibly uninspiring.

> human employees using AI are doing way more than they could before, both in depth and scale Funny how that doesn't show up in any productivity or economic metrics...

Bit too soon to tell, no? Claude Code wasn't released until the latter half of Q2, offering little time for it to show up in those figures, and Q3 data is only preliminary right now. Moreover, it seems to be the pairing with Opus 4.5 that lends some credence to the claims. However, it was released in Q4. We won't have that data for quite a while. And like Claude Code, it came late in the quarter, so realistically we really need to wait on Q1 2026 figures, which hasn't happened yet and won't really start to appear until summertime and beyond. That said, I expect you are right that we won't see it show up. Even if we assume the claim is true in every way for some people, it only works for exceptional visionaries who were previously constrained by typing speed, which is a very, very, very small segment of the developer population. Any gains that small group realize will be an unrecognizable blip amid everything else. The vast majority of developers need all that typing time and more to have someone come up with their next steps. Reducing the typing time for them doesn't make them any more productive. They were never limited by typing speed in the first place.

> I’m hoping 2026 will be the year we stop caring about what people believe AI might do, and instead start reacting to its real, present capabilities. So well put. LLMs are useful for a great many things. It's just that being the best new product of the recent years, maybe even defining a decade doesn't cut it. It has to be the century-defining, world-ending, FOMO-inducing massive thing to put Skynet to shame and justify investments in trillion dollars. It's either AI joining the workforce soon, or Nvidia and OpenAI aren't that valuable. I guess it manages to maximize shareholder value, and make AI feel like a disappointment.

It never made sense to blame AI in the first place for tech layoffs. You have a new tool that you think can supercharge your employees, make them ~10x productive, be leveraged to disrupt all sorts of industries, and have the workforce best suited to learn and use these tools to their full potential. You think the value of labor may soon collapse, but there are piles of money to be made before that happens. If you truly believed that, you would be spinning up new projects and offshoots as this is a serious arms race with a ton of potential upside (not just in developing AI, but in leveraging it to build things cheaper). Allegedly every dollar you spent on an engineer is potentially worth 10x(?) what it was a couple years ago. Meaning your profit per engineer could soar, but tech companies decided they don't want more profit? AI is mostly solved and the value of labor has already collapsed? Or AI is a nice band-aid to prop up a smaller group of engineers while we weather the current economic/political environment and most CXO's don't believe there are piles of money to be had by leveraging AI now or the near future.

> you would be spinning up new projects and offshoots If the engineers can 10x their output, this actually exposes the product leadership since I find it unlikely that they can 10x the number of revenue generating projects or 10x their product spec development.

> Allegedly every dollar you spent on an engineer is potentially worth 10x(?) what it was a couple years ago. Meaning your profit per engineer could soar, but tech companies decided they don't want more profit? Exactly, so many of these claims are complete nonsense. I'm supposed to believe that boards/investors would be fine with companies doing massive layoffs to maintain flat/minuscule growth, when they could keep or expand their current staffing and massively expand their market share and profits with all this increased productivity? It's ridiculous. If this stuff had truly increased productivity at the levels claimed we would see firms pouring money into technical staff to capitalize on this newfound leverage.

I think the issue is that everybody assumes the economy operates under some kind of "free market" conditions: limited by available labor but with unlimited potential demand. In that situation, AI could indeed cause massive unemployment. But this is perhaps not the case. By pesimistic estimates half of the people work in bs jobs that have no real value to society, and every capitalist is focused on rent extraction now. If the economy can operate under such conditions, it doesn't really need more productivity growth, it is already demand-limited.

Agentic AI companies are doing millions in revenue. Just because agents haven’t spread to the entire economy yet doesn’t mean they are not useful for relatively complex tasks.

I'm curious about how they count revenue...

Okay but so is like, the 3 store chain which does my cars tires. Millions in revenue ain't hard to hit with extremely modest business.

One million companies with a dollar in revenue?

And just because people are thowing money at an AI company doesnt mean they have or will ever have a marketable product. The #1 product of nearly every AI company is hope, hope that one day they will replace the need to pay real employees. Hope like that allows a company to cut costs and fund dividends ... in the short term. The long term is some other person's problem. (Ill change my mind the day Bill Gates trusts MS copilot with his personal banking details.)

not much in income tho

I predict all house cats will be replaced by robots by 2027. People just do not realise how great of an effect the AI and robotics will have on home pet ownership. However as a CEO of a publicly listed company ”Robot-cats-that-are-totally-like-awesome-and-are-gonna-like-totally-be-as-lovable-as-real-ones Inc.” I am seeing this change from first row seat. We plan to be on the helm of the new pet-robot future, which not furry and cute, but cold and boring. Sources? What, but, you are not a journalist, you are not suppose to challenge what I say, I’m a CEO! No I’m not just using media to create artificial hype to pull investors and make money on bullshit that is never gonna work! How can you say that! It’s a real thing, trust me bro!

What scaling limitations, Gemini 3 shows us that is not over yet, and little brother flash is a hyper sparse, 1T parameter model (aiui) that is both fast and good I agree with GP, Marcus has not been an accurate or significant voice, could care lass what he has to say about ai. He's not a practitioner anymore in my mind

Well clearly LLMs are not AGI, and all such calls of them being 'AGI' have been a pump and dump scam. So he got that dead right for years.

"We are now confident we know how to build AGI as we have traditionally understood it. We believe that, in 2025, we may see the first AI agents 'join the workforce' and materially change the output of companies." We know how to build it and it will be entering the workforce in 2025. Well, we're in 2026 now and we don't have it in the workforce or anywhere else because they haven't built it because they don't really know how to build it because they're hucksters selling vaporware built on dead end technologies they cannot admit to.

It pretty much did join the work force. Listen to the fed chair, listen to related analysis, the unexpected overperformance of GDP isn’t directly attributed AI but it is very much in the “how did that happen?” conversation. And there’s plenty of softer, more anecdotal evidence in addition to that to respond to the headline with “It did.” The fact that it has been gradual and subtle as the very first agent tools reach production readiness, gain awareness in the public, start being used…? That really doesn’t seem at all unexpected as the path than “joining” would follow.

> the unexpected overperformance of GDP isn’t directly attributed AI but it is very much in the “how did that happen?” conversation. We spent an amount of money on data centers that was so large that it managed to overcome a self-imposed kick in the nuts from tariffs and then some. The amount of money involved rivals the creation of the railroad system in the United States. Of course GDP overperformed in that scenario. Where did AI tool use show up in the productivity numbers?

My understanding was that the growth came mainly from things like building data centers and buying chips. Boring old fashioned stuff.

This is why I’m not worried about an imminent AI bubble burst. The data centers will be built, the GPUs have already been ordered, etc. What I am worried about is what happens when in 2-3 years time the AI companies need to find paying customers to use those data centers. Then it might be time to rebalance into gold or something.

The energy isn't available and that is going to take much longer to build.

> the unexpected overperformance of GDP isn’t directly attributed AI but it is very much in the “how did that happen?” conversation. it's builing datacenters and buying servers and GPUs. It isn't directly attributed to AI because it isn't caused by use of AI, but blowing the AI bubble