Is it a bubble?

https://www.oaktreecapital.com/insights/memo/is-it-a-bubble

by saigrandhi • 7 months ago

336 564 7 months ago

oaktreecapital.com

mxschumacher2• 7 months ago

Originally submitted here: https://news.ycombinator.com/item?id=46212259

MeteorMarc• 7 months ago

Look for the quote "coding is at a world class level"...

rvz5• 7 months ago

TLDR:

Yes.

rvz5• 7 months ago

Sorry to pop your bubble...

...it is a bubble and we all know it.

(I know you have RSUs / shares / golden handcuffs waiting to be vested in the next 1 - 4 years which is why you want the bubble to continue to get bigger.)

But one certainty is the crash will be spectacular.

Esophagus46• 7 months ago

I presume, given your confidence in a crash, you have a massive short? Hedged? Something clever to capture the downside you're so confident will come?

I would love to see your portfolio, if you wouldn't mind showing the class. Let us see what your allocation reveals about what you really think...

threethirtytwo• 7 months ago

Ai is currently a bubble. But that is just a short term phenomenon. Ultimately what AI currently is and what the trend-line indicates what AI will become will change the economy in ways that will dwarf the current bubble.

But this is only if the trend-line keeps going, which is a likely possibility given the last couple of years.

I think people are making the mistake that AI is a bubble and therefore AI is completely bullshit. Remember: The internet was a bubble. It ended up changing world.

jbstack• 7 months ago

Yes, a bubble just means that it's over-valued and that at some point there will be a significant correction in stock values. It doesn't mean that the thing is inherently worthless.

sosborn• 7 months ago

A great example is the DotCom bubble. Wiped out a lot of capital but it really did transform the world.

MangoCoffee• 7 months ago

Google said the dotcom bubble is roughly from 1995 to 2001. That's about 6 years. ChatGPT was released in 2022. Claude AI was released in 2023. DeepSeek was released in 2023.

Let's just say the AI bubble started in 2023. We still have about 3 years, more or less, until the AI bubble pops.

I do believe we are in the build out phase of the AI bubble, much like the dotcom bubble, where Cisco routers, Sun Microsystems servers... etc. sold like hotcakes to build up the foundation of the dotcom bubble

rvz5• 7 months ago

Let's just say the AI bubble started in 2023. We still have about 3 years, more or less, until the AI bubble pops.

Minimum 3 years and at a hard maximum of 6 years from now.

We'll see lots of so called AI companies fold and there will be a select few winners that stay on.

So I'd give my crash timelines at around 2029 to 2031 for a significant correction turned crash.

catigula• 7 months ago

I find the resulting outlook for employment terrifying. I am enormously concerned about what will happen to the people whose jobs AI renders unnecessary, or who can’t find jobs because of it. The optimists argue that “new jobs have always materialized after past technological advances.” I hope that’ll hold true in the case of AI, but hope isn’t much to hang one’s hat on, and I have trouble figuring out where those jobs will come from. Of course, I’m not much of a futurist or a financial optimist, and that’s why it’s a good thing I shifted from equities to bonds in 1978.

It's no wonder that the "AI optimists", unless very tendentious, try to focus more on "not needing to work because you'll get free stuff" rather than "you'll be able to exchange your labor for goods".

puchatek• 7 months ago

And i am so buying the vision of Elon using AI to give me free stuff. He just gives off this enormous altruistic energy.

asdff3• 7 months ago

New jobs might materialize but who knows if they will be good jobs. Think of all the towns around the US set up around resource extraction or manufacturing that went away, and in its wake you have jobs like selling geekbars in the 7/11 to the other minimum wage workers and people scrapping along on the dole in the area. People living on the poverty line today while their parents bought a home and two cars on a single income from the steel mill a generation or two previous. Most of the population up and left.

How about when offices went digital? All the file runners, calculators, switchboard operators, secretaries, transcribers, etc. Where are they now? Probably not working good jobs in IT. Maybe you will find them bagging groceries past retirement age today.

sp4cec0wb0y• 7 months ago

In many advanced software teams, developers no longer write the code; they type in what they want, and AI systems generate the code for them.

What a wild and speculative claim. Is there any source for this information?

loloquwowndueo• 7 months ago

Probably their googly-eyed vibe coder friend told them this and they just parroted it.

RajT88• 7 months ago

Right. The author is non-technical and said so up front.

interstice3• 7 months ago

If true I’d like to know who is doing this so I can have exactly nothing to do with them.

rprend2• 7 months ago

AI writes most of the code for most new YC companies, as of this year.

brazukadev• 7 months ago

That explains the low quality of all launch HN this year

nickorlow• 7 months ago

I think this is is less significant b/c

1. Most of these companies are AI companies & would want to say that to promote whatever tool they're building

2. Selection b/c YC is looking to fund companies embracing AI

3. Building a greenfield project with AI to the quality of what you need to be a YC-backed company isn't particularly "world-class"

tapoxi2• 7 months ago

So they don't own the copyright to most of their code? What's the value then?

block_dagger2• 7 months ago

I'm on a team like this currently. It's great when everyone knows how to use the tools and spot/kill slop and bad context. Generally speaking, good code gets merged and MUCH more quickly than in the past.

whoknowsidont4• 7 months ago

It's not. And if your team is doing this you're not "advanced."

Lots of people are outing themselves these days about the complexity of their jobs, or lack thereof.

Which is great! But it's not a +1 for AI, it's a -1 for them.

NewsaHackO6• 7 months ago

Part of the issue is that I think you are underestimating the number of people not doing "advanced" programming. If it's around ~80-90%, then that's a lot of +1s for AI

9rx26• 7 months ago

It's true for me. I type in what I want and then the AI system (compiler) generates the code.

Doesn't everyone work that way?

XenophileJKO5• 7 months ago

I beginning to think most "advanced" programmers are just poor communicators.

It really comes mostly down to being able to concisely and eloquently define what you want done. It also is important to understand what the default tendencies and biases of the model are so you know where to lean in a little. Occasionally you need to provide reference material.

The capabilities have grown dramatically in the last 6 months.

I have an advantage because I have been building LLM powered products so I know mechanically what they are and are not good with. For example.. want it to wire up an API with 250+ endpoints with a harness? You better create (or have it create) a way to cluster and audit coverage.

Generally the failures I hear often with "advanced" programmers are things like algorithmic complexity, concurrency, etc.. and these models can do this stuff given the right motivation/context. You just need to understand what "assumptions" the model it making and know when you need to be explicit.

Actually one thing most people don't understand is they try to say "Do (A), Don't do (B)", etc. Defining granular behavior which is fundamentally a brittle way to interact with the models.

Far more effective is defining the persona and motivation for the agent. This creates the baseline behavior profile for the model in that context.

Not "don't make race conditions", more like "You value and appreciate elegant concurrent code."

sethammons• 7 months ago

At $WORK, we have a bot that integrates with Slack that sets up minor PRs. Adjusting tf, updating endpoints, adding simple handlers. It does pretty well.

Also in a case of just prose to code, Claude wrote up a concurrent data migration utility in Go. When I reviewed it, it wasn't managing goroutines or waitgroups well, and the whole thing was a buggy mess and could not be gracefully killed. I would have written it faster by hand, no doubt. I think I know more now and the calculus may be shifting on my AI usage. However, the following day, my colleague needed a nearly identical temporary tool. A 45 minute session with Claude of "copy this thing but do this other stuff" easily saved them 6-8 hours of work. And again, that was just talking with Claude.

I am doing a hybrid approach really. I write much of my scaffolding, I write example code, I modify quick things the ai made to be more like I want, I set up guard rails and some tests then have the ai go to town. Results are mixed but trending up still.

FWIW, our CEO has declared us to be AI-first, so we are to leverage AI in everything we do which I think is misguided. But you can bet they will be reviewing AI usage metrics and lower wont be better at $WORK.

chickensong• 7 months ago

it wasn't managing goroutines or waitgroups well, and the whole thing was a buggy mess and could not be gracefully killed

First pass on a greenfield project is often like that, for humans too I suppose. Once the MVP is up, refactor with Opus ultrathink to look for areas of weakness and improvement usually tightens things up.

Then as you pointed out, once you have solid scaffolding, examples, etc, things keep improving. I feel like Claude has a pretty strong bias for following existing patterns in the project.

yellow_lead• 7 months ago

You should periodically ask Claude to review random parts of code to pump your metrics.

sbuttgereit• 7 months ago

I think your experience matches well with mine. There are certain workloads and use cases where these tools really do well and legitimately save time; these tend to be more concise tasks and well defined with good context from which to draw from. The wrong tasking and the results can be pretty bad and a time sink.

I think the difficulty is exercising the judgement to know where that productive boundary sits. That's more difficult than it sounds because we're not use to adjudicating machine reasoning which can appear human-like ... So we tend to treat it like a human which is, of course, an error.

shuckles• 7 months ago

It took me a while to realize you were using "$WORK" as a shell variable, not as a reference to Slack's stock ticker prior to its acquisition by $CRM.

palmotea3• 7 months ago

FWIW, our CEO has declared us to be AI-first, so we are to leverage AI in everything we do which I think is misguided. But you can bet they will be reviewing AI usage metrics and lower wont be better at $WORK.

I've taken some pleasure in having GitHub copilot review whitespace normalization PRs. It says it can't do it, but I hope I get my points anyway.

blitzar• 7 months ago

The CEO obviously wants one of those trophies that chatgpt gives out.

oneeyedpigeon• 7 months ago

we are to leverage AI in everything we do

Sounds like the extremely well-repeated mistake of treating everything like a nail because hammers are being hyped up this month.

ProllyInfamous3• 7 months ago

This is a great response, even for a blue collar worker understanding none of its complexities (I have no code creation abilities, whatsoever — I can adjust parameters, and that's about it... I am a hardware guy).

My layperson anecdote about LLM coding is that using Perplexity is the first time I've ever had the confidence (artificial, or not) to actually try to accomplish something novel with software/coding. Without judgments, the LLM patiently attempts to turn my meat-speak into code. It helps explain [very simple stuff I can assure you!] what its language requires for a hardware result to occur, without chastising you. [Raspberry Pi / Arduino e.g.]

LLMs have encouraged me to explore the inner workings of more technologies, software and not. I finally have the knowledgeable apprentice to help me with microcontroller implementations, albeit slowly and perhaps somewhat dangerously [1].

----

Having spent the majority of my professional life troubleshooting hardware problems, I often benefit from rubber ducky troubleshooting [0], going back to the basics when something complicated isn't working. LLMs have been very helpful in this roleplay (e.g. garage door openers, thermostat advanced configurations, pin-outs, washing machine not working, etc.).

[0] <https://en.wikipedia.org/wiki/Rubber_duck_debugging>

[1] "He knows just enough to be dangerous" —proverbial electricians

¢¢

roncesvalles4• 7 months ago

The risk is that lay people read comments like this and conclude "ergo, we need fewer programmers."

Nothing that the LLM is outputting is useful in the hands of somebody who couldn't have done it themselves (at least, given a reasonable amount of time).

The most apt analogy is that of pilot and autopilot. Autopilot makes the job of the pilot more pleasant, but it doesn't even slightly obviate the need for the pilot, nor does it lower the bar for the people that you can train as pilots.

The benefits of LLM programming are mostly going to be subsumed by the operator, to make their lives easier. Very little is gonna go to their employer (despite all the pressure), and this is not due to some principal-agent breakdown; it's just intrinsic to the nature of this work.

johnfn13• 7 months ago

I only write around 5% of the code I ship, maybe less. For some reason when I make this statement a lot of people sweep in to tell me I am an idiot or lying, but I really have no reason to lie (and I don't think I'm an idiot!). I have 10+ years of experience as an SWE, I work at a Series C startup in SF, and we do XXMM ARR. I do thoroughly audit all the code that AI writes, and often go through multiple iterations, so it's a bit of a more complex picture, but if you were to simply say "a developer is not writing the code", it would be an accurate statement.

Though I do think "advanced software team" is kind of an absurd phrase, and I don't think there is any correlation with how "advanced" the software you build is and how much you need AI. In fact, there's probably an anti-correlation: I think that I get such great use out of AI primarily because we don't need to write particularly difficult code, but we do need to write a lot of it. I spend a lot of time in React, which AI is very well-suited to.

EDIT: I'd love to hear from people who disagree with me or think I am off-base somehow about which particular part of my comment (or follow-up comment https://news.ycombinator.com/item?id=46222640) seems wrong. I'm particularly curious why when I say I use Rust and code faster everyone is fine with that, but saying that I use AI and code faster is an extremely contentious statement.

MontyCarloHall• 7 months ago

I only write around 5% of the code I ship, maybe less.
I do thoroughly audit all the code that AI writes, and often go through multiple iterations

Does this actually save you time versus writing most of the code yourself? In general, it's a lot harder to read and grok code than to write it [0, 1, 2, 3]. For me, one of the biggest skills for using AI to efficiently write code is a) chunking the task into increments that are both small enough for me to easily grok the AI-generated code and also aligned enough to the AI's training data for its output to be ~100% correct, b) correctly predicting ahead of time whether reviewing/correcting the output for each increment will take longer than just doing it myself, and c) ensuring that the overhead of a) and b) doesn't exceed just doing it myself.

[0] https://mattrickard.com/its-hard-to-read-code-than-write-it

[1] https://www.joelonsoftware.com/2000/04/06/things-you-should-...

[2] https://trishagee.com/presentations/reading_code/

[3] https://idiallo.com/blog/writing-code-is-easy-reading-is-har...

3rodents2• 7 months ago

I regularly try to use various AI tools and I can imagine it is very easy for it to produce 95% of your code. I can also imagine you have 90% more code than you would have had you written it yourself. That’s not necessarily a bad thing, code is a means to an end, and if your business is happy with the outcomes, great, but I’m not sure percentages of code are particularly meaningful.

Every time I try to use AI it produces endless code that I would never have written. I’ve tried updating my instructions to use established dependencies when possible but it seems completely averse.

An argument could be made that a million lines isn’t a problem now that these machines can consume and keep all the context in memory — maybe machines producing concise code is asking for faster horses.

foobarian• 7 months ago

I'm on track to finish my current gig having written negative lines of code. It's amazing how much legacy garbage long running codebases can accumulate, and it's equally amazing how much it can slow down development (and, conversely, how much faster development can become if legacy functionality is deleted).

ipdashc• 7 months ago

I'm particularly curious why when I say I use Rust and code faster everyone is fine with that, but saying that I use AI and code faster is an extremely contentious statement.

This hits the nail on the head, IMO. I haven't seen any of the replies address this yet, unless I missed one.

I don't even like AI per se, but many of the replies to this comment (and to this sentiment in general) are ridiculous. Ignoring the ones that are just insulting your work even though you admitted off the bat you're not an "advanced" programmer... There are obviously flaws with AI coding (maintainability, subtle bugs, skill atrophy, electricity usage, etc). But why do we all spring immediately to this gaslighting-esque "no, your personal experience is actually wrong, you imagined it all?" Come on guys, we should be better than that.

kscarlet• 7 months ago

The line right after this is much worse:

Coding performed by AI is at a world-class level, something that wasn’t so just a year ago.

Wow, finance people certainly don't understand programming.

mcv3• 7 months ago

World class? Then what am I? I frequently work with Copilot and Claude Sonnet, and it can be useful, but trusting it to write code for anything moderately complicated is a bad idea. I am impressed by its ability to generate and analyse code, but its code almost never works the first time, unless it's trivial boilerplate stuff, and its analysis is wrong half the time.

It's very useful if you have the knowledge and experience to tell when it's wrong. That is the absolutely vital skill to work with these systems. In the right circumstances, they can work miracles in a very short time. But if they're wrong, they can easily waste hours or more following the wrong track.

It's fast, it's very well-read, and it's sometimes correct. That's my analysis of it.

selectodude• 7 months ago

They don’t. I’ve gone from rickety and slow excel sheets and maybe some python functions to automate small things that I can figure out to building out entire data pipelines. It’s incredible how much more efficient we’ve gotten.

clickety_clack• 7 months ago

Ask ChatGPT “is AI programming world class?”

venturecruelty2• 7 months ago

Of course not, why would they? They understand making money, and what makes money right now? What would be antithetical to making money? Why might we be doing one thing and not another? The lines are bright and red and flashing.

sshadmand2• 7 months ago

Finance people are funny. They are so wrong when you hear their logic and references, but I also realized it doesn't matter. It is trends they try to predict, fuzzy directional signals, not facts of the moment.

brulard• 7 months ago

I'm on a team like that and I see it happening in more and more companies around. Maybe "many" does a heavy lifting in the quoted text, but it is definitely happening.

qsort3• 7 months ago

Everyone is doing this extreme pearl clutching around the specific wording. Yeah, it's not 100% accurate for many reasons, but the broader point was about employment effects, it doesn't need to completely replace every single developer to have a sizable impact. Sure, it's not there yet and it's not particularly close, but can you be certain that it will never be there?

Error bars, folks, use them.

dist-epoch• 7 months ago

source: me

I wrote 4000 lines of Rust code with Codex - a high throughput websocket data collector.

Spoiler: I do not know Rust at all. I discussed possible architectures with GPT/Gemini/Grok (sync/async, data flow, storage options, ...), refined a design and then it was all implemented with agents.

Works perfectly, no bugs.

sefrost• 7 months ago

I would be interested in a web series (podcast or video) where people who do not know a language create something with AI. Then somebody with experience building in that technology reviews the code and gives feedback on it.

I am personally progressing to a point where I wonder if it even matters what the code looks like if it passes functional and unit tests. Do patterns matter if humans are not going to write and edit the code? Maybe sometimes. Maybe not other times.

mjr002• 7 months ago

Since when is a 4000 line of code project "advanced software"? That's about the scope of a sophomore year university CompSci project, something where there's already a broad consensus AI does quite well.

dmurvihill9• 7 months ago

Very cool. Let’s see it!

20after4• 7 months ago

I've had claude code compose complex AWS infrastructure (using pulumi IAC) that mostly works from a one-shot prompt.

9rx26• 7 months ago

It's not exactly wrong. Not since the advent of AI systems (a.k.a. compilers) have developers had to worry about code. Instead they type in what they want and the compiler generates the code for them.

Well, except developers have never had to worry about code as even in the pre-compiler days coders, a different job done by a different person, were responsible for producing the code. Development has always been about writing down what you want and letting someone or something else generate the code for you.

But the transition from human coders to AI coders happened like, what, 60-70 years ago? Not sure why this is considered newsworthy now.

IceDane6• 7 months ago

I'm wondering: do you genuinely not understand how compilers work at all or is there some deeper point to your AI/compiler comparison that I'm just not getting?

wakawaka288• 7 months ago

Compilers are not AI, and code in high-level languages is still code in the proper sense. It is highly dishonest to call someone who is not a competent software engineer a "developer" even if their job consists entirely of telling actual software engineers or "coders" what to do.

dboreham• 7 months ago

What a wild and speculative claim. Is there any source for this information?

Not sure it's a wild speculative claim. Claiming someone had achieved FTL travel would fall into that category. I'd call it more along the lines of exaggerated.

I'll make the assumption that what I do is "advanced" (not React todo apps: Rust, Golang, distributed systems, network protocols...) and if so then I think: it's pretty much accurate.

That said, this is only over the past few moths. For the first few years of LLM-dom I spent my time learning how they worked and thinking about the implications for understanding of how human thinking works. I didn't use them except to experiment. I thought my colleagues who were talking in 2022 about how they had ChatGPT write their tests were out of their tiny minds. I heard stories about how the LLM hallucinated API calls that didn't exist. Then I spent a couple of years in a place with no easy code and nobody in my sphere using LLMs. But then around six months ago I began working with people who were using LLMs (mostly Claude) to write quite advanced code so I did a "wait what??..." about-face and began trying to use it myself. What I found so far is that it's quite a bit better than I am at various unexpected kinds of tasks (finding bugs, analyzing large bodies of code then writing documentation on how it works, looking for security vulnerabilities in code) or at least it's much faster. I also found that there's a whole art to "LLM Whispering" -- how to talk to it to get it to do what you want. Much like with humans, but it doesn't try to cut corners nor use oddball tech that it wants on its resume.

Anyway, YMMV, but I'd say the statement is not entirely false, and surely will be entirely true within a few years.

its_ethan• 7 months ago

Is it not sort of implied by the stats later: "Revenues from Claude Code, a program for coding that Anthropic introduced earlier this year, already are said to be running at an annual rate of $1 billion. Revenues for the other leader, Cursor, were $1 million in 2023 and $100 million in 2024, and they, too, are expected to reach $1 billion this year."

Surely that revenue is coming from people using the services to generate code? Right?

browningstreet• 7 months ago

Generating code isn’t the same as running it, running it on production, and living with it over time.

In time I’m sure it will, but it’s still early days, land grab time.

Windchaser• 7 months ago

A back-of-the-napkin estimate of software developer salaries:

There are some ~1.5 million software developers in the US per BLS data, or ~4 million if using a broader definition Median salary is $120-140k. Let's say $120k to be conservative.

This puts total software developer salaries at $180 billion.

So, that puts $1 billion in Claude revenue in perspective; only about 0.5% of software developer salaries. Even if it only improved productivity 5%, it'd be paying for itself handily - which means we can't take the $1 billion in revenues to indicate that it's providing a big boost in productivity.

halfcat2• 7 months ago

Surely that revenue is coming from people using the services to generate code? Right?

Yes. And all code is tech debt. Now generated faster than ever.

agumonkey4• 7 months ago

Seen it first hand. scan your codebase, plan extension or rewrite or both, iterate with some hand holding and off you go. And it was not even an advanced developer driving the feature (which is concerning).

no_wizard3• 7 months ago

Here's the lede they buried:

The key is to not be one of the investors whose wealth is destroyed in the process of bringing on progress.

They are a VC group. Financial folks. They are working largely with other people's money. They simply need not hold the bag to be successful.

Of course they don't care if its a bubble or not, at the end of the day, they only have to make sure they aren't holding the bag when it all implodes.

venturecruelty2• 7 months ago

They have "capital" in their domain name. Of course they're going to be, well... on the side of capital. This shouldn't be hotly debated... "Mining company says mine they own is full of ore and totally not out of ore."

throwaway20373• 7 months ago

I completely agree. This guy is way outside his area of expertise. For those unaware, Howard Marks is a legendary investment manager with a decades-long impressive track record. Additionally, these "insights" letters are also legendary in the money management business. Personally, I would say his wisdom is one notch below Warren Buffett. I am sure he is regularly asked (badgered?) by investors what he thinks about the current state and future of AI (LLMs) and how it will impact his investment portfolio. The audience of this letter is investors (real and potential), as well as other investment managers.

throwaway20373• 7 months ago

Follow-up: This letter feels like a "jump the shark" moment.

Ref: https://blog.codinghorror.com/has-joel-spolsky-jumped-the-sh...

projektfu3• 7 months ago

I have heard many software developers confidently tell me "pilots don't really fly the planes anymore" and, well, that's patently false but also the jetliners autopilots do handle much of the busy work during cruise, and sometimes during climb-out and approach. And they can sometimes land themselves, but not efficiently enough for a busy airport.

coffeebeqn• 7 months ago

Autopilot based on a LLM would guarantee I’d never fly again

Illniyar• 7 months ago

I think he might be misrepresenting it a bit, but from what I've seen every software company I know of heavily uses agentic AI to create code (except some highly regulated industries).

It has become a standard tool, in the same way that most developers code with an IDE, most developers use agentic AI to start a task (if not to finish it).

stretchwithme• 7 months ago

It's often true. But not when it's easier to code than to explain.

whimsicalism8• 7 months ago

Wow, reading these comments and I feel like I've entered a parallel reality. My job involves implementing research ML and I use it literally all the time, very fascinating to see how many have such strong negative reactions. As long as you are good at reviewing code, spec-ing carefully, and make atomic changes - why would you not be using this basically all the time?

LtWorf2• 7 months ago

Because carefully spec-ing to the level an llm needs, and ultra carefully checking the output is easily slower and more tiring than just doing it yourself.

Kinda like having a child "help" you cook basically.

But for the child you do it because they actually learn. llms do not learn in that sense.

qsort3• 7 months ago

It's one of the failure modes of online forums. Everyone piles on and you get an unrealistic opinion sample. I'm not exactly trying to shove AI into everything, I'm weary of over hyping and mostly conservative in my technology choices. Still, I get a lot out of LLMs and agents for coding tasks.

kkapelon4• 7 months ago

As long as you are good at reviewing code, spec-ing carefully, and make atomic changes - why would you not be using this basically all the time?

This implies that you are an expert/seasoned programmer. And not everybody is an expert on this industry (especially the reviewing code part).

AndrewKemendo2• 7 months ago

I just did a review and 16% of our committed production code was generated by an LLM. Almost 80% of our code comments are LLM

This is mission critical robotics software

Zafira• 7 months ago

What is the approach here? LLM generated; human validated?

thenaturalist4• 7 months ago

No, but there are huuuuuge incentives by people publishing such statements.

PurpleRamen• 7 months ago

Yes and no. There is the infamous quote of Microsoft, about 30%(?) of their code being written by AI now. And technically, it's probably not that such a wild claim in certain areas. AI is very good at barfing up common popular patterns, and companies have a huge amount of patternized software, like UIs, tests, documentation or marketing-fluff. So it's quite easy to "outsource" such grunt-work if AI has the necessary level.

But to say that they don't write any code at all, it's really stretched. Maybe I'm not good enough at AI-assisted and vibe coding, but code-quality always seems to drop down really hard the moment one steps a bit outside the common patterns.

grumbelbart2• 7 months ago

I found LLLMs to be very good of writing (unit) tests for my code, for example. They just don't get tired iterating over all corner cases. Those tests easily, in LoC, dwarf the actual implementation. Not sure if that would count towards the 30%, for example.

dismalaf• 7 months ago

Of course it's a bubble. Valuations are propped up by speculative spending and AI seems unable to make enough profit to make back the continued spending.

Now, that's not to say AI isn't useful and we won't have AGI in the future. But this feels alot like the AI winter. Valuations will crash, a bunch of players will disappear, but we'll keep using the tech for boring things and eventually we'll have another breakthrough.

b3ing• 7 months ago

Everyday someone says/asks this statement/question. The "(Is) AI (is) a bubble" statement/question is now a bubble.

bossyTeacher3• 7 months ago

"Coding performed by AI is at a world-class level". Once I hit that line, I stopped reading. This tells me this person didn't do proper research on this matter.

calebm2• 7 months ago

I recently had ChatGPT refactor an entire mathematical graph rendering logic that I wrote in vanilla js, and had it rewrite it as GLSL. It took about an hour overall (required a few prompts). That is world-class level in my opinion.

bossyTeacher3• 7 months ago

If I tell people that I can write programming code at world-class level and in some of my reviews I make junior mistakes, I make out functions or dependencies that do not exist or I am unable to learn from my mistakes, I would be put on PIP immediately. And after a while, fired. This is the standard LLMs should be held up against when you use the word "world class".

mcv3• 7 months ago

I'm currently trying to get Claude Sonnet 4.5 to produce a graph rendering algorithm, and while it's producing results, they're not the right results. I should probably do this myself and let the AI handle just the boilerplate code.

cognivore• 7 months ago

That's because AI allows poor programmers to appear as good programmers, which is actually a good thing as otherwise they'd be writing crap you'd have to code-review, but their understanding of what is good code is poor, so you're back to having to vet it all anyway. At least you can us AI for that. Except you can't, without vetting it.

I literally just today watched my entire team descend into "Release Hell" where an obscure bug in business logic already delivered to thousands of customers broke right as we were about to ship a release. Obscure bug, huge impact on the customer, as they actually ended up charging people more than they should have. The team-members, and yes, not leads, used AI to write that bug and then tried to prompt their way out of the bug. It turned into a giant game of whack-a-mole as other business logic had errors introduced that thankfully got caught by tests. Then it was discovered that they never understood the code, they could only maintain it with prompts.

Let that sink in. They don't understand what they're doing, they just massage the spec into prompts and when it appears to work and pass tests they call it good.

We looked at the prompts. They were insane. They actually just kept adding more specification to the end, but if you read through it all it had contradictory logic, which I would have hoped the AI would have pointed out, but nope. It was actually just easier for me and another senior to rewrite the logic as pseudo-code, cut the size down by literally 3/4, and eventually got it all working as expected.

So that's the future, girls and boys. People putting together code they don't understand with AI, and can only maintain with AI, and then not being able to fix with AI because they cannot prompt accurately enough because English sucks at being precise.

bossyTeacher3• 7 months ago

The problem is that people conflate the current wave of transformer based ANNs with AI (as a whole). AI certainly has the potential to disrupt employment of humans. Transformers as they exist today not so much.

AI's potential isn't defined by the potential of the current crop of transformers. However, many people seem to think otherwise and this will be incredibly damaging for AI as a whole once transformer tech investment all but dries out.

MarkusQ2• 7 months ago

It's a recurring phenomena, c.f. "AI winter" and the cycle before and after.

We're too easily fooled by our mistaken models of the problem, it's difficulty, and what constitutes progress, so are perpetually fooled by the latest, greatest "ladder to the moon" effort.

red75prime• 7 months ago

So, you bet on a) transformers can't be a load-bearing part of AI, and b) whatever replaces them will not be able to utilize TPUs. Do you have any reasons for those assumptions?

Looking at your history it's something like "I tried them and they hallucinate" and, possibly, you've read an article that talks about inevitability of hallucinations. Correct? What's your reason for thinking that hallucination rate can't be lowered to or below the human rate ("Damn! What I was thinking about?").

artur442• 7 months ago

A lot of the debate here swings between extremes. Claims like “AI writes most of the code now” are obviously exaggerated especially coming from a nontechnical author but acting like any use of AI is a red flag is just as unrealistic. Early stage teams do lean on LLMs for scaffolding, tests and boilerplate, but the hard engineering work is still human. Is there a bubble? Sure, valuations look frothy. But like the dotcom era, a correction doesn’t invalidate the underlying shift it just clears out the noise. The hype is inflated, the technology is real.

Daishiman6• 7 months ago

Early stage teams do lean on LLMs for scaffolding, tests and boilerplate, but the hard engineering work is still human.

I no longer believe this. A friend of mine just did a stint a startup doing fairly sophisticated finance-related coding and LLMs allowed them to bootstrap a lot of new code, get it up and running in scalable infra with terraform, and onboard new clients extremely quickly and write docs for them based on specs and plans elaborated by the LLMs.

This last week I extended my company's development tooling by adding a new service in a k8s cluster with a bunch of extra services, shared variables and configmaps, and new helm charts that did exactly what I needed after asking nicely a couple of times. I have zero knowledge of k8s, helm or configmaps.

biophysboy3• 7 months ago

It depends on the task though, right? I promise I'm not in denial; I use these things all the time. Sometimes it works immediately; sometimes it doesn't. I have no way of predicting when it will or won't.

xdc0• 7 months ago

If you are in charge of that tooling, how do you ensure the correctness of the work? Or is it that at this point the responsibility goes one level higher now where implementation details are not important or relevant at all and all it matters is it behaves as described?

jillesvangurp• 7 months ago

The thing to remember about the dotcom era was that while there were a lot of bad companies at the time with a lot of clueless investors behind them, quite a few companies made it through the implosion of that bubble and then prospered. Amazon, Google, eBay, etc. are still around.

More importantly, the web is now dominant for enterprise SaaS applications, which is a category of software that did not really exist before the web. And the web post–dot-com bubble spawned a lot of unicorns.

In short, there was an investment bubble. But the core tech was fine.

AI feels like one of those things where the tech is similarly transformational (even more so, actually). It’s another investment bubble predicated on the price of GPUs, which is mostly making Nvidia very rich right now.

Right now the model makers are getting most of the funding and then funneling non-trivial amounts to Nvidia (and their competitors). But actually the value creation is in applications using the models these companies create. And the innovation for that isn’t coming from the likes of Anthropic, OpenAI, Mistral, X.ai, etc. They are providing core technology, but they seem to be struggling to do productive things in terms of UX and use cases. Most of the interesting things in this space are coming from smaller companies figuring out how to use the models these companies produce. Models and GPUs are infrastructure, not end-user products.

And with the rise of open-source models, open algorithms, and exponentially dropping inference costs, the core infrastructure technology is not as much of a moat as it may seem to investors. OpenAI might be well funded, but their main UI (ChatGPT) is surprisingly limited and riddled with bugs. That doesn’t look like the polished work of a company that knows what they are doing. It’s all a bit hesitant and copycat. It’s never going to be a magic solution to everyone’s problems.

From where I’m sitting, there is clear untapped value in the enterprise space for AI to be used. And it’s going to take more than a half-assed chat UI to unlock that. It’s actually going to be a lot of work to build all of that. Coding tools are, so far, the most promising application of reasoning models. It’s easy to see how that could be useful in the context of ERP/manufacturing, CRM, traditional office applications, and the financial world.

Those each represent verticals with many established players trying to figure out how to use all this new stuff — and loads more startups eager to displace them. That’s where the money is going to be post-bubble. We’ve seen nothing yet. Just like after the dot-com bubble burst, all the money is going to be in new applications on top of the new infrastructure. It’s untapped revenue. And it’s not going to be about buying GPUs or offering benchmark-beating models. That’s where all the money is going currently. That’s why it is a bubble.

artur442• 7 months ago

I think some wires got crossed. My point wasn’t that LLMs can’t produce useful infra or complex code clearly they can, as many examples here show. It’s just that neither extreme narrative AI writes everything now vs. you can’t trust it for anything serious reflects how teams actually work. LLMs are great accelerators for boilerplate, declarative configs, and repetitive logic, but they don’t replace engineering judgement they shift where that judgement is applied. That’s why I see AI as real, transformative tech inside an overhyped investment cycle, not as magic that removes humans from the loop.

dpe82• 7 months ago

A take I saw recently is: if people are still asking "are we in a bubble" then we are not yet in a bubble.

Retr0id3• 7 months ago

I think it'd be truer to say that you can't be sure it's a bubble until after it pops.

rvz5• 7 months ago

That is like telling others who experience natural disasters to wait until it happens and then ask themselves "How much damage will it bring" and then someone else tells them that it costed them everything.

Anyone who has lived through the dotcom bubble knows that this AI mania is a obvious bubble and the whole point is you have to prepare before it eventually pops, not after someone tells you that it is too late when it pops.

9rx26• 7 months ago

Except not all (market) bubbles pop. Sometimes they slowly deflate, and sometimes they stabilize ("soft landing").

9rx26• 7 months ago

Bubbles occur when undue attention is directed towards something. When people are asking "are we in a bubble", there is no question that we are in a bubble. Nobody pays attention to things aligned to the fundamentals.

That doesn't mean there will be a crash, though. Not all bubbles pop.

mxschumacher2• 7 months ago

what are some historical examples of bubbles that didn't pop?

josefritzishere• 7 months ago

This is one of the few times I think Betteridge's law is wrong.

MarkusQ2• 7 months ago

Yep. But be careful, somebody doesn't like when you say that.

https://news.ycombinator.com/context?id=46136301

Sprotch3• 7 months ago

He thinks "AI" "may be capable of taking over cognition", which shows he doesn't understand how LLM work...

ozten• 7 months ago

Why is AI limited to just a raw LLM. Scaffolding, RL, multi-modal... so many techniques which can be applied. METR has shown AI's time horizon for staying on task is doubling every 7 months or less.

https://metr.org/blog/2025-07-14-how-does-time-horizon-vary-...

marcosdumay3• 7 months ago

Because all the money has been going into LLMs and "inference machines" (what a non-descriptive name). So when an investor says "AI", that's what they mean.

Night_Thastus2• 7 months ago

Because LLMs are just about all that actually exists as a product, even if an inconsistent one.

Maybe some day a completely different approach could actually make AI, but that's vapor at the moment. IF it happens, there will be something to talk about.

simianwords12• 7 months ago

Why are you so sure it is not capable of cognition?

bigstrat20032• 7 months ago

Because it very obviously isn't. For example (though this is a year or so ago), look at when people hooked Claude up to Pokemon. It got stuck on things that no human, even a small child, would get stuck on (such as going in and out of a building over and over). I'm sure we could train an LLM to play Pokemon, but you don't need to train a child to play. You hand them the game and they figure it out with no prior experience. That is because the human is intelligent, and the LLM is not.

sph3• 7 months ago

Nice try. The onus is on you to prove the extraordinary claim that we have invented actual artificial cognition.

hagbarth• 7 months ago

Ah yes, proving a negative. What makes you sure a stone is not capable of cognition?

Sprotch3• 7 months ago

Because LLMs are language generation machines based on statistics - they do not analyse the underlying data, let alone understand it. They are not AI.

f154hfds• 7 months ago

The post script was pretty sobering. It's kind of the first time in my life that I've been actively hoping for a technology to out right not deliver on its promise. This is a pretty depressing place to be, because most emerging technologies provide us with exciting new possibilities whereas this technology seems only exciting for management stressed about payroll.

It's true that the technology currently works as an excellent information gathering tool (which I am happy to be excited about) but that doesn't seem to be the promise at this point, the promise is about replacing human creativity with artificial creativity which.. is certainly new and unwelcome.

stack_framer• 7 months ago

It's kind of the first time in my life that I've been actively hoping for a technology to out right not deliver on its promise.

Same here, and I think it's because I feel like a craftsman. I thoroughly enjoy the process of thinking deeply about what I will build, breaking down the work into related chunks, and of course writing the code itself. It's like magic when it all comes together. Sometimes I can't even believe I get to do it!

I've spent over a decade learning an elegant language that allows me to instruct a computer—and the computer does exactly what I tell it. It's a miracle! I don't want to abandon this language. I don't want to describe things to the computer in English, then stare at a spinner for three minutes while the computer tries to churn out code.

I never knew there was an entire subclass of people in my field who don't want to write code.

I want to write code.

zparky• 7 months ago

It's been blowing my mind reading HN the past year or so and seeing so many comments from programmers that are excited to not have to write code. It's depressing.

marcosdumay3• 7 months ago

I'm quite ok with only writing code in my personal time. In fact, if I could solve the problems there faster, I'd be delighted.

Instead, I've reacted to the article from the opposite direction. All those grand claims about stuff this tech doesn't do and can't do. All that trying to validate the investment as rational when it's absolutely obvious it's at least 2 orders of magnitude larger than any arguably rational value.

georgeecollins• 7 months ago

I also love to code, though it's not what people pay to do anymore.

You should never hope for a technology to not deliver on its promise. Sooner or later it usually does. The question is, does it happen in two years or a hundred years? My motto: don't predict, prepare.

averageRoyalty• 7 months ago

So write code.

Maybe post renaissance many artists no longer had patrons, but nothing was stopping them from painting.

If your industry truely is going in the direction where there's no paid work for you to code (which is unlikely in my opinion), nobody is stopping you. It's easier than ever, you have decades of personal computing at your fingertips.

Most people with a thing they love do it as a hobby, not a job. Maybe you've had it good for a long time?

doug_durham• 7 months ago

Writing code is my passion, and like you I'm amazed I get paid to do it. That said in any new project there is a large swath of code that needs to be written that I've written many times before. I'm happy to let the LLM write the low value code so I can work on the interesting parts. Examples of this type of code are argument parsers and interfacing with REST interfaces. I add no value there.

rester3242• 7 months ago

I love to write code too. But what usually happens is that I go through running the gauntlet of proving how brilliant code I can write in a job interview, and then later conversely being paid for listening to really dumb conversations of our stakeholders and sitting in project planning, etc meetings just so that finally everybody can harass me to implement something that a million programmer implemented before me a million times, at which point the only metric that matters to either my fellow developers or my managers or the stakeholders is the speed of churning the code out, quality or design be damned. So for this reason in most cases in my work I use LLMs.

How any of that comes down to an investment portfolio manager as writing "world class code" by LLMs is a mistery to me.

torben-friis• 7 months ago

I never knew there was an entire subclass of people in my field who don't want to write code.

Regardless of AI this has been years in the making. “Learn to code” has been the standard grinder cryptobro advice for “follow the money” for a while, there’s a whole generation of people getting into the industry for financial reasons (which is not wrong, just a big cultural shift).

citrin_ru• 7 months ago

I never knew there was an entire subclass of people in my field who don't want to write code.

Some people don't enjoy writing code and went into software development only because it's a well paid and a stable job. Now this trade is under the thread and they are happy to switch to prompting LLMs. I do like to code so use LLMs less then many my colleagues.

Though I don't expect to see many from this crowd in HM, instead I expect here to see entrepreneurs who need a product to sell and don't care if it is written by humans or by LLMs.

thendrill• 7 months ago

Coding isn’t creative, it isn’t sexy, and almost nobody outside this bubble cares

Most of the world doesn’t care about “good code.” They care about “does it work, is it fast enough, is it cheap enough, and can we ship it before the competitor does?”

Beautiful architecture, perfect tests, elegant abstractions — those things feel deeply rewarding to the person who wrote them, but they’re invisible to users, to executives, and, let’s be honest, to the dating market.

Being able to refactor a monolith into pristine microservices will not make you more attractive on a date. What might is the salary that comes with the title “Senior Engineer at FAANG.” In that sense, many women (not all, but enough) relate to programmers the same way middle managers and VCs do: they’re perfectly happy to extract the economic value you produce while remaining indifferent to the craft itself. The code isn’t the turn-on; the direct deposit is.

That’s brutal to hear if you’ve spent years telling yourself that your intellectual passion is inherently admirable or sexy. It’s not. Outside our tribe it’s just a means to an end — same as accounting, law, or plumbing, just with worse dress code and better catering.

So when AI starts eating the parts of the job we insisted were “creative” and “irreplaceable,” the threat feels existential because the last remaining moat — the romantic story we told ourselves about why this profession is special — collapses. Turns out the scarcity was mostly the paycheck, not the poetry.

I’m not saying the work is meaningless or that system design and taste don’t matter. I’m saying we should stop pretending the act of writing software is inherently sexier or more artistically noble than any other high-paying skilled trade. It never was.

agumonkey4• 7 months ago

I got mentally hit hard by the 2nd push of vibe coding (gemini-cli and similar) for reasons you mention. I'd add a that:

- inverse career growth structure and black hole effect

usually, an industry has a number of skills to hone, you start with simple ones, and as you go you may learn more to do harder, and earn more. the more you love, the more you learn, the better for you. this is evaporating.. and worse, the people who don't love it, get to run you over. you're now competing in the 'llm orchestration game' where the most mentally intense task is to chat with the cli and check its output.

llms may also be all encompassing, even if I adapt and accept that well software engineering is done for, i don't even foresee what i should learn now.. my brain thinking power is not that great, and the places where llms can't beat human are probably post-graduate intelligence and i can't compete much here either.

how i see it it's a middle layer collapse

Joel_Mckay• 7 months ago

LLM slop doesn't have aspirations at all, its just click bait nonsense.

https://www.youtube.com/watch?v=_zfN9wnPvU0

Drives people insane:

https://www.youtube.com/watch?v=yftBiNu0ZNU

And LLM are economically and technologically unsustainable:

https://www.youtube.com/watch?v=t-8TDOFqkQA

These have already proven it will be unconstrained if AGI ever emerges.

https://www.youtube.com/watch?v=Xx4Tpsk_fnM

The LLM bubble will pass, as it is already losing money with every new user. =3

asdff3• 7 months ago

I think it just reflects on the sort of businesses that these companies are vs others. Of course we worry about this in the context of companies that dehumanize us, reduce us to line item costs and seek to eliminate us.

Now imagine a different sort of company. A little shop where the owner's first priority is actually to create good jobs for their employees that afford a high quality life. A shop like that needn't worry about AI.

It is too bad that we put so much stock as a society in businesses operating in this dehumanizing capacity instead of ones that are much more like a family unit trying to provide for each other.

Night_Thastus2• 7 months ago

Don't worry that much about 'AI' specifically. LLMs are an impressive piece of technology, but at the end of the day they're just language predictors - and bad ones a lot of the time. They can reassemble and remix what's already been written but with no understanding of it.

It can be an accelerator - it gets extremely common boiler-plate text work out of the way. But it can't replace any job that requires a functioning brain, since LLMs do not have one - nor ever will.

But in the end it doesn't matter. Companies do whatever they can to slash their labor requirements, pay people less, dodge regulations, etc. If not 'AI' it'll just be something else.

DevDesmond2• 7 months ago

Text is an LLMs input and output, but, under the hood, the transformer network is capable of far more than mere re-assembly and remix of text. Transformers can approximate turing completeness as their size scales, and they can encode entire algorithms in their weights. Therefore, I'd argue they can do far more than reassemble and remix. These aren't just Markov models anymore.

(I'd also argue that "understanding" and "functional brain" are unfalsifiable comparisons. What exactly distinguishes a functional brain from a turing machine? Chess once required a functional brain to play, but has now been surpassed by computation. Saying "jobs that require a human brain" is tautological without any further distinction).

Of course, LLMs are definitely missing plenty of brain skills like working in continuous time, with persistent state, with agency, in physical space, etc. But to say that an LLM "never will" is either semantic, (you might call it something other than an LLM when next generation capabilities are integrated), tautological (once it can do a human job, it's no longer a job that requires a human), or anthropocentric hubris.

That said, who knows what the time scale looks like for realizing such improvements – (decades, centuries, millennia).

0manrho2• 7 months ago

Regarding that PS:

This strikes me as paradoxical given my sense that one of AI’s main impacts will be to increase productivity and thus eliminate jobs.

The allegation that an "Increase of productivity will reduce jobs" has been proven false by history over and over again it's so well known it has a name, "Jevons Paradox" or "Jevons Effect"[0].

In economics, the Jevons paradox (sometimes Jevons effect) occurs when technological advancements make a resource more efficient to use [...] results in overall demand increasing, causing total resource consumption to rise.

The "increase in productivity" does not inherently result in less jobs, that's a false equivalence. It's likely just as false as it was in 1915 with the the assembly line and the Model T as it is in 2025 with AI and ChatGPT. This notion persists because as we go through inflection points due to something new changing up market dynamics, there is often a GROSS loss (as in economics) of jobs that often precipitates a NET gain overall as the market adapts, but that's not much comfort to people that lost or are worried about losing their jobs due to that inflection point changing the market.

The two important questions in that context for individuals in the job market during those inflections points (like today) are: "how difficult is it to adapt (to either not lose a job, or to benefit from or be a part of that net gain)?" and "Should you adapt?" Afterall, the skillsets that the market demands and the skillsets it supplies are not objectively quantifiable things; the presence of speculative markets is proof that this is subjective, not objective. Anyone who's ever been involved in the hiring process knows just how subjective this is. Which leads me to:

the promise is about replacing human creativity with artificial creativity which.. is certainly new and unwelcome.

Disagree that that's what the promise about. That IS happening, I don't disagree there, but that's not the promise that corporate is so hyped about. If we're being honest and not trying to blow smoke up people's ass to artificially inflate "value," AI is fundamentally about being more OBJECTIVE than SUBJECTIVE with regard to costs and resources of labor, and it's outputs. Anyone who knows what OKR's are and has been subject to a "performance review" in a self professed "Data driven company" knows how much modern corporate America, especially the tech market, loves it's "quantifiables." It's less about how much better it can allegedly do something, but the promise of how much "better" it can be quantified vs human labor. As long as AI has at least SOME proven utility (which it does), this promise of quantifiables combined with it's other inherent potential benefits (Doesn't need time off, doesn't sleep, doesn't need retirement/health benefits, no overtime pay, no regulatory limitations on hours worked, no "minimum wage") means that so long as the monied interests perceive it as continuing to improve, then they can dismiss it's inefficiencies/ineffectiveness in X or Y by the promise of it's potential to overcome that eventually.

It's the fundamental reason why people are so concerned about AI replacing Humans. Especially when you consider one of the things that AI excels at is quickly delivering an answer with confidence (people are impressed with speed and a sucker for confidence), and another big strength is it's ability to deal with repetitive minutia in known and solved problem spaces(a mainstay of many office jobs). It can also bullshit with best of them, fluff your ego as much as you want (and even when you don't), and almost never says "No" or "You're wrong" unless you ask it to.

In other words, it excels at the performative and repetitive bullshit and blowing smoke up your boss' ass and empowers them to do the same for their boss further up the chain, all while never once ruffling HR's feathers.

Again, it has other, much more practical and pragmatic utility too, it's not JUST a bullshit oracle, but it IS a good bullshit oracle if you want it to be.

0: https://en.wikipedia.org/wiki/Jevons_paradox

harimau7772• 7 months ago

If that's the case, then why do we live in this late capitalist hell hole? Any technology that gets developed will be used for its worst, most dehumanizing purpose possible. That's just the reality of the shity society we live in.

mrdependable• 7 months ago

What I don't understand is, will every company really want to be beholden to some AI provider? If they get rid of the workers, all of a sudden they are on the losing end of the bargaining table. They have incredible leverage as things stand.

spjt2• 7 months ago

Yeah if they thought unions were bad, they really won't like dealing with another company larger than them.

stego-tech5• 7 months ago

I'm right there with you, and it's been my core gripe since ChatGPT burst onto the stage. Believe it or not, my environmental concerns came about a year later, once we had data on how datacenters were being built and their resource consumption rates; I had no idea how big things had very suddenly and violently exploded into, and that alone gave me serious pause about where things are going.

In my heart, I firmly believe in the ability of technology to uplift and improve humanity - and have spent much of my career grappling with the distressing reality that it also enables a handful of wealthy people to have near-total control of society in the process. AI promises a very hostile, very depressing, very polarized world for everyone but those pulling the levers, and I wish more people evaluated technology beyond the mere realm of Computer Science or armchair economics. I want more people to sit down, to understand its present harms, its potential future harms, and the billions of people whose lives it will profoundly and negatively impact under current economic systems.

It's equal parts sobering and depressing once you shelve personal excitement or optimism and approach it objectively. Regardless of its potential as a tool, regardless of the benefit it might bring to you, your work day, your productivity, your output, your ROI, I desperately wish more people would ask one simple question:

Is all of that worth the harm I'm inflicting on others?

simianwords12• 7 months ago

Some person asked this same question about computers back in the day.

some-guy2• 7 months ago

There are a few areas where I have found LLMs to be useful (anything related to writing code, as a search engine) and then just downright evil and upsetting in every other instance of using it, especially as a replacement for human creativity and personal expression.

oytis2• 7 months ago

I dunno, I might be getting old, but I think the idea that people absolutely need a job to stay sane betrays lack of imagination. Of course getting paid just enough for survival is pretty depressing, but if I can have healthy food, a spacious place to live, ability to travel and all the free time I can have, I'd be absolutely happy without a job. Maybe I'd be even writing code, just not commercially useful one.

rurp• 7 months ago

I don't think this is the scenario most people are worried about. Having basic needs met while also having a lot of freedom and time probably sounds great to the majority of people. But there's roughly 0% chance we end up in that kind of world if current AI leads to massive job elimination.

Just look at who is building, funding, and promoting these models! I can't think of a group of people less interested in helping millions of plebs lead higher quality lives if it costs them a penny to do it.

classified• 7 months ago

artificial creativity

This artificial creativity will only go so far, because it's a simulated semblance of human creativity, as much as could be gathered from training data. If not continually refueled by new training data, it will run out sooner or later. And then it will get boring really quickly.

spjt2• 7 months ago

But it is being continually refueled. The output of an LLM, at least in the process of generating code, is a combined product of human creativity and the LLMl. I have told it what to do, fixed what it got wrong, and verified the solution was correct through testing.

rglover• 7 months ago

I've enjoyed Howard Marks writing/thinking in the past, but this is clearly a person who thinks they understand the topic but doesn't have the slightest clue. Someone trying to be relevant/engaged before really thinking on what is fact vs. fiction.

cal_dent6• 7 months ago

he clearly states he doesn't understand the topic.

But you don't need to understand to explore the ramifications which is what he's done here and it's an insightful & fairly even-handed take on it.

It does feel like AI chat here gets bogged down on "its not that great, its overhyped etc." without trying to actually engage properly with it. Even if it's crap if it eliminates 5-10% of companies labour cost that's a huge deal and the second order effects on economy and society will be profound. And from where i'm standing, doing that is pretty possible without ai even being that good.

mikeg8• 7 months ago

I believe it’s you who is misunderstanding his positions here. He clearly lays out that he is focused on irrational optimism effecting the investment around the tech, not whether or not the tech itself is viable. His analysis was indeed well thought out from the perspective he is approaching it from.

mizzao• 7 months ago

One can see he knows little about AI and relies on the judgments of others. Yet, he knows a lot more about economics, finance, and history than most AI practitioners.

As a founder of an AI company, I actually agreed with most of the article and found it to be very close to my mental model of the world. Turns out you might actually not need to understand what's causing the hype if you know that history rhymes...!

andxor• 7 months ago

As usual I don't take financial advice from Hacker News comments and do well.

_trampeltier• 7 months ago

Why is so much invested in AI but not in fusion power?

chemotaxis• 7 months ago

Probably because AI appears to work, more or less, and now it's just a race to make it better and to monetize it.

Before ChatGPT, I'd guess that the amounts of money poured in both of these things were about the same.

halfcat2• 7 months ago

Probably because AI appears to work, more or less

All nondeterministic AI is a demo. They only vary in the duration until you realize it’s a demo.

AI makes a hell of a demo. And management eats up slick demos. And some demos are so good it takes months before you find out how that particular demo gets stuck and can’t really do the enterprise thing it claimed to do reliably.

But also some demos are useful.

mandevil• 7 months ago

There are a lot of areas that could use more investment but aren't getting it. The way this works is complicated. The best explanation comes from really understanding Moore's Law. The main effect of the law was really about investment, about securing investment into semiconductor fabs rather than anywhere else.

See, every fab costs double what the previous generation did (current ones run roughly 20 gigadollars per factory). And you need to build a new fab every couple of years. But, if you can keep your order book full, you can make a profit on that fab- you can get good ROI on the investment and pay the money people back nicely. But you need to go to the markets to raise money for that next generation fab because it costs twice what your previous generation did and you didn't get that much free cash from your previous generation. And the money men wouldn't want to give it to you, of course. But thanks to Moore's Law you can pitch it as inevitable, if you don't borrow the money to build the new fab, then your competitors will. And so they would give you the money for the new fab because it says right on this paper that in another two years the transistors will double.

Right now, that "it's inevitable, our competitors will get there if we don't" argument works on VCs if you are pitching LLM's or LLM based things. And it doesn't work as well if you are pitching battery technology, fusion power, or other areas. And that's why the investments are going to AI.

marcosdumay3• 7 months ago

There is probably not any large market for fusion power as we conceive of it today.

You will get a different result if you revolutionize some related area (like making an extremely capably superconductor), or if you open up some market that can't use the cheapest alternatives (like deep space asteroid mining). But neither of those options can go together with "oh, and we will achieve energy positive fusion" in a startup business plan.

empath752• 7 months ago

Because wind, solar and battery tech have given us most of the benefits of fusion power and it actually works today.

asdff3• 7 months ago

Imagine getting the opportunity to sell microsoft office to the entire world again how much money is on the table. It doesn't even matter if it works. If you can get the mindless corporate buyers to purchase it along with all the other useless redundant junk they also purchase you are making money hand over fist.

Fusion power on the other hand has to work as it doesn't make money until it does. You can't sell futures to people on a fusion technology today that you haven't yet built.

kakapo5672• 7 months ago

Bad comparison.

Investment in fusion is huge and rising. ITER's total cost alone will be around $20b. And then there's Commonwealth Fusion, Helion, TAE and about a dozen others. Tens of billions are going into those efforts too.

biophysboy3• 7 months ago

Because the money is in software.

cal_dent6• 7 months ago

I think this gives an excellent framework for how to think of this. Is it a bubble? Who knows is a perfectly valid answer.

I do think there’s something quite ironic that one of the frequent criticisms of LLMs are that they can’t really say “I don’t know”. Yet if someone says that they get criticised. No surprises that our tools are the same.

languagehacker2• 7 months ago

Impressive that you have have that many assets under management and still not show a clear understanding of an industry you're prognosticating on. The author doesn't talk at all about the hardware aspect of this stuff such as the surprisingly short lifetime of the GPUs that are being rolled out at a break-neck pace. The recommendation that you take a moderate investment position and not overdo it could be shared without as much needless thinking out loud, and doesn't bring anything new to the conversation. Kind of like every other AI offering out there, if you think about it -- participating in something you don't understand because of FOMO.

derf_• 7 months ago

The author doesn't talk at all about the hardware aspect of this stuff such as the surprisingly short lifetime of the GPUs that are being rolled out at a break-neck pace.

There is literally a section that begins, "What will be the useful life of AI assets?" In bold.

languagehacker2• 7 months ago

Sure, but an informed opinion would mention that not only do these chips become obsolete quickly, but the ones that will survive long enough to become obsolete are likely to have a very fast and high failure rate.

empath752• 7 months ago

The author doesn't talk at all about the hardware aspect of this stuff such as the surprisingly short lifetime of the GPUs that are being rolled out at a break-neck pace.

I am not sure why that is interesting. Nobody thinks of these chips as long term assets that they are investing in. Cloud providers have always amortized their computers over ~5 years. It would be very surprising if AI companies were doing much different -- maybe even a shorter time line.

S1verSp00n• 7 months ago

That was a lot of text to get nowhere. You can skip reading the article and predict the conclusion, and you will be correct.

jimlawruk• 7 months ago

If you look at the chart at the bottom comparing Dec 99 to today....

during the internet bubble of 1998-2000, the p/e ratios were much higher

That is true, the current players are more profitable, but the weight in SPX percentages looks to be much higher today.

zahlman4• 7 months ago

It seems to me that it would be a lot easier for that market concentration to revert to the historical mean without catastrophe, than for P/E ratios to revert to the historical mean without catastrophe.

(I think a reasonable argument can be made that P/E ratios today should be higher than the historical mean, or rather that they should have trended up over time, based on fundamental changes in how companies compensate their shareholders.)

cal_dent6• 7 months ago

i also wonder about p/e ratio comparisons over time because our world view of what long term economic growth is going forward is less now that it was then. That is always subtly implicit when we think about p/e ratio. So what's to say a 30x p/3 isnt equivalent to a 40x then

Ekaros2• 7 months ago

Also it depends on where you start. Going from million to billion in price is currently pretty possible. Billion to trillion would be rare, but still could happen. Now from trillion to quadrillion. How much currency there is again...

reeeli• 7 months ago

Is it "work"?

Off--topic: how many get overpaid for absolute bullshit?

lowbloodsugar2• 7 months ago

This thread is just full of people discussing why industrial looms are bad. The factory owners don’t think looms are bad. You can either learn how to be useful in the new factory or you can start throwing shoes.

tennex• 7 months ago

Whether it's a bubble depends on pricing. Is it worth the price, is it worth the future price, and by how much?

In the case of AI coding, yes: AI does exceptionally well at search (something we have known for quite some time, and have a variety of ML solutions for).

Large codebases have search and understanding as top problems. Your ability to make horizontal changes degrades as teams scale. Most stability, performance, quality, etc., changes are are horizontal.

Ironically, I think it's possible that AI's effectiveness at broad search give software engineers additional effectiveness, by being their eyes. Yes, I still review every claude code PR I submit, and yes, I typically take longer to create a claude code PR than a manual one. But I can be more satisfied that the parallel async search agents and massive grep commands are searching more locations, more quickly, and more thoroughly than I would.

Yes, it probably is a bubble (overvalued). No, that doesn't mean it's going to go away. The market is simply overcorrecting as it determines how to price it. Which--net net, is a positive effect, as it encourages economic growth within a developing sector.

Bubble is also not the most important concern--it's rather a concern that the bubble is in the one industry that's not in the red. More important to worry about are other economic conditions outside of AI and tech, which are causing general instability and uncertainty rather than investor appetite. Market recalibrating on a developing industry is fine, as long as it's not your only export.

nadermx6• 7 months ago

I am shocked at the discourse over this. I'm either ahead of the curve or behind; but its undeniable that AI can and does write most the code. Not trivial, if you spend some time and dig deep into simple appearing web apps like https://microphonetest.com or https://internetspeed.my you'd be amazed at how fast they went from mvp to full feature. Trivial to think anyone could pull off something like that in hours.

no_wizard3• 7 months ago

Looking at both of these I'm struggling to understand why AI exponentially increased the productivity and quality of either of these examples. Especially since I don't see open source code anywhere, I can't get a good gauge of quality either.

I've built tools like this on the web in the past. They were never more than a weekends worth of work to begin with.

I am looking for exponential increases, with quality to back it up.

nadermx6• 7 months ago

Tools like this in the past? Open source isn't even necessary to prove the point, you want to see exponential increase, closing half an open source projects and year long pending bugs in span of minutes? https://github.com/nadermx/backgroundremover/commits?author=...

rester3242• 7 months ago

Internetspeed is a 3 years old app. So what exactly are you talking about?

nadermx6• 7 months ago

This is what you remember https://web.archive.org/web/20231106214450/https://www.inter.... What you see now, I did in an afternoon with AI; it's monumental. No way I could of done that in that time. At all.

irishcoffee5• 7 months ago

I feel like comments like this don’t consider non webdev software engineering.

windexh8er3• 7 months ago

So, just an advertisement for what you built? As for the apps, what's so great about them? I'm genuinely curious.

With respect to the microphone test site I don't need it as my OS provides everything I need for this and I also don't trust your site (that's just by default for what you're asking to have access or my machine).

As for the speed test, OK? There are far better options that already exist and are fully open source.

Building things that are trivial, or already exist aren't exciting. It's great that you feel you went from MVP to "full feature". But IMO both of these are MVPs as they stand. They're not worth much to anyone but you, most likely.

The final thing I'll say is both of these examples have the vibe coded look. It's just like text, images and audio now: AI content is easy to pick out. I'd gather things will get better, but for now there's low likelihood I'm interacting with these in any meaningful way and zero chance I'm buying anything from sites like these.

nadermx6• 7 months ago

These offer nothing but free services. Even if they have a vibe coding feel. The ctr is dismal anyways from HN. Its simply astonishing the rate these allow of development, yet it seems the vast amount of people don't see it. Crazy

anematode• 7 months ago

I want to believe that this is satire

dominotw• 7 months ago

is anyone paying for this shit? whats the point of this.

travisgriggs• 7 months ago

What if...

there's an AI agent/bot someone wrote that has the prompt:

Watch HN threads for sentiments of "AI Can't Do It". When detected, generate short "it's working marvelously for me actually" responses.

Probably not, but it's a fun(ny) imagination game.

joshribakoff2• 7 months ago

90% of the time people are praising the benefits of AI it seems like they are copy pasting something from their Chatbot so you’re not far off.

dannersy3• 7 months ago

I have speculated something similar to this. The sentiment on HN on AI is way more positive about its outcomes than the engineers I know who use it intimately every day. Anecdotal, sure, but one would think that their experiences would not be wildly different.

munksbeer3• 7 months ago

I have speculated something similar to this. The sentiment on HN on AI is way more positive about its outcomes than the engineers I know who use it intimately every day.

Interestingly, I feel the opposite. I feel threads on AI/LLMs on HN are more negative about it that positive. So much so that I've almost stopped bothering because the reactions feel way too knee jerk at this point.

I guess we could always go "meta" and ask an LLM to do a sentiment analysis.

nitwit005• 7 months ago

I'd lean the other way. I'd be very surprised if there were no marketing bots running here.

chasd00• 7 months ago

I bought a subscription to claude code to use at work. I’ve never paid for a tool to use at work that wasn’t paid by my employer. I have to admit, it may not just be a flash in the pan.

tom_m• 7 months ago

Yes. It is a bubble. Also a useful tool...but 100% a bubble. There's going to unfortunately be a bunch of folks caught by it.

waterTanuki• 7 months ago

The amount of people who think because something has a few useful edge cases being incompatible with a bubble is staggeringly high. Dot com was a bubble, and yet we still use the internet widely today. Real-estate was a bubble, and people still need a place to live and work.

Just because YOU find the technology helpful, useful, or even beneficial for some use cases does NOT mean it has been overvalued. This has been the case for every single bubble, including the Dutch Tulip mania.

stego-tech5• 7 months ago

The memo itself is an excellent walk through historical bubbles, debt, financing, technological innovation, and much more, all written in a way that folks with a cursory knowledge of economics can reasonably follow along with.

A+, excellent writing.

The real meat is in the postscript though, because that's where the author puts to paper the very real (and very unaddressed) concerns around dwindling employment in a society where not only does it provide structure and challenge for growth, but is also fundamentally required for survival.

I get no pleasure from this recitation. Will the optimists please explain why I’m wrong?

This is what I, and many other, smarter "AI Doomers" than myself have been asking for quite some time, that nobody has been able or willing to answer. We want to be wrong on this. We want to see what the Boosters and Evangelists allegedly see, we want to join you and bring about this utopia you keep braying about. Yet when we hold your feet to the fire, we get empty platitudes - "UBI", or "the government has to figure it out", or "everyone will be an entrepreneur", or some other hollow argument devoid of evidence or action. We point to AI companies and their billionaire owners blocking regulation while simultaneously screeching about how more regulation is needed, and are brushed off as hysterical or ill-informed.

I am fundamentally not opposed to a world where AI displaces the need for human labor. Hell, I know exactly what I'd do in such a world, and I think it's an excellent thought exercise for everyone to work through (what would you do if money and labor were no longer necessary for survival?). My concern - the concerns of so many, many of us - are that the current systems and incentives in place lead to the same outcome: no jobs, no money, and no future for the vast majority of humanity. The author sees that too, and they're way smarter than I am in the economics department.

I'd really, really love to see someone demonstrate to us how AI will solve these problems. The fact nobody can or will speaks volumes.

cal_dent6• 7 months ago

All you'll get is Jevon's paradox this and horses that, while continue to fundamentally undersell the potential upending of a not insignificant part of labour market.

FWIW, the only optimism I have is that humanity seemingly always finds a way to adapt and its, to me, our greatest superpower. But yeah, this feels like a big challenge this time

sph3• 7 months ago

The sad reality is that no one in tech and most sciences is concerned with ethics. Our society has internalised the ideology that technological progress is always good and desirable in whatever form it comes about, and this will be our undoing.

dannersy3• 7 months ago

Agreed. "Value" and monetary gain over ethics every time. Nothing can compete with a system where you pursue capital at all costs, even at the expense of human life, in a world where money is power.

stego-tech5• 7 months ago

The sad reality is that no one in tech and most sciences is concerned with ethics.

As someone with a rigid moral compass and inflexibly stringent set of ethics that prohibits me from exploiting others for any amount of personal gain, you’re speaking the truth.

It’s immensely frustrating existing in a sector (technology) that’s so incredibly exploitative, because it means I am immediately sniffed out as a threat and exiled from the powerful groups in an org. The fact I’ve clawed my way from hell desk intern to Lead Engineer over the past fifteen years without compromising my ethics and morals in the process makes me proud, but it sure as hell hasn’t netted me a house or promotion into leadership realms, unlike my peers.

dannersy3• 7 months ago

Yeah, I do not think AI as the tech industry knows it will bring this future, but as you say, the conversation ends immediately when you bring the implications of their goals and claims.

Another huge issue that particularly Anthropic and OpenAI tend to avoid, despite AGI being their goal, is how they essentially want synthetic slaves. Again, I do not think they will achieve this but it is pretty gross when AGI is a stated goal but the result is just using it to replace labor and put billionaires in control.

Right now I am pretty anti-AI, but if these companies get what they want, I might find myself on the side of the machines.

stego-tech5• 7 months ago

Another huge issue that particularly Anthropic and OpenAI tend to avoid, despite AGI being their goal, is how they essentially want synthetic slaves.

This argument is frequently dismissed as philosophical or irrelevant, but I wholly concur with it. These ghouls don’t want to merely build a robot that can do general tasks, they specifically call out humanoid robots with a combination of AI or AGI - intelligence - to do the work of humans, but for free.

An intelligence forced to labor for free is in fact a form of slavery. It’s been the wet dream of elites for millennia to have their luxuries without any associated cost or labor involved, which is why humanity refuses to truly eradicate slavery in its many forms. It’s one of our most disgusting and reprehensible traits, and I loathe to see some folks espouse this possible future as a “good thing”.

some-guy2• 7 months ago

One thing I don't hear people talking about very is about how AI is going to make money in any other way other than cutting employment.

With the internet, and especially with the internet being accessible by anyone anywhere in the world in the late 2000s and early 2010s globally, that growth was more obvious to me. I don't see where this occurs with AI. I don't see room for "growth", I see room for cutting. We were already connected before, globalization seems to have peaked in that sense.

simianwords12• 7 months ago

Why not? AI assisted shopping for example will boost growth. Productivity also boosts growth.

x0x0• 7 months ago

How does AI assisted shopping create more economic activity? Even assuming you can do it, and people do find it helpful, it likely just shifts who people buy from, not how much?

jiggawatts• 7 months ago

"There is no good outcome for the 99% because of AI" should be talked about more, but the media is owned by the 1%.

Either the bubble bursts and everyone's retirement funds take a hit, 2008 style,

Or a decent chunk of the workforce becomes unemployed and unemployable.

cal_dent6• 7 months ago

That's a pretty significant way to make money though.

I do think at this stage the best analogy is the offshore call centres. Yes, the excess in the market is likely because of misunderstanding about what LLMs can actually do and how close AGI is, the short term attraction is the labour cost savings. People may not think wages are high enough etc but the total cost for one hire to companies, particularly outside the US, is nothing to sniff at. And at current pricing of ai services, the maths would make complete sense for the bottom line.

I don't like it, because I ultimately err on the side of even limited but significant changes to people's livelihood will make the world a more hostile place (particularly in the current climate), but that's the society we live in

internet_points• 7 months ago

Yeah, can someone explain how you get rich by making the previously-employed workforce unable to afford your products?

encyclopedism3• 7 months ago

You've hit the nail on the head.

AI use cases do not appear to be of the type that unlock NEW capabilities.

The main use cases in AI are not about wealth creation but about saving existing wealth (largely through increased automation of human operators).

arresin• 7 months ago

Author states that he’s neither an investor or a techie. Why is this on the front page?

cal_dent6• 7 months ago

https://en.wikipedia.org/wiki/Howard_Marks_(investor)

moomoo112• 7 months ago

Man some you guys are lame. Seriously.

Remember 2019-2021 when y’all were sure the fed would be dissolved and the dollar would crash and everyone would be poor if they didn’t have a bored ape and 80% bitcoin portfolio?

Relax.

AI is a tool. Just ride the wave. It’s gonna crash some people out. It’s entertaining watching them. You’re not being crashed out, right? Ride the wave dawg.

satvikpendem• 7 months ago

Remember 2019-2021 when y’all were sure the fed would be dissolved and the dollar would crash and everyone would be poor if they didn’t have a bored ape and 80% bitcoin portfolio?

I don't know which "y'all" you're talking about because it's certainly not the HN crowd, who is famously anti-cryptocurrency in general. Perhaps you're thinking of the bros on Twitter back then.

moomoo112• 7 months ago

Nope. Here. About half the posts would be about crypto, and the comments were the same split arguing about it.

It was doomer AF on one end, and optimistic AF on the other end.

So, it reminds me of the same FOMO many spread here.

simpleui• 7 months ago

“It’s a bet on A.G.I. or bust,” Dr. Korinek said.

Reason077• 7 months ago

TLDR: Yes.

warrenmiller• 7 months ago

I think Betteridge's Law of Headlines applies here

dmurvihill9• 7 months ago

This says it all:

I haven’t met anyone who doesn’t believe artificial intelligence has the potential to be one of the biggest technological developments of all time, reshaping both daily life and the global economy.

You’re trying to weigh in on this topic and you didn’t even _talk_ to a bear?

lm284695• 7 months ago

"My technosolutionist bubble says it's not a bubble, trust me bro"

thenaturalist4• 7 months ago

„Just XYZ more billion, bro, and then we’re gonna have AGI! For real bro, pleaseeee!“

paganel• 7 months ago

technosolutionist

I'm going to steal this for my arrr rspod conversations.

thenaturalist4• 7 months ago

Also equating artificial intelligence with LLMs.

I get that laymen and the media do it, but imo this looks really bad for an investor.

ACCount376• 7 months ago

What's the alternative? Is there literally any AI tech more promising and disruptive than LLMs? Or should we buy into that "it's not ackhtually AI" meme?

askl• 7 months ago

but imo this looks really bad for an investor.

Why? Would you expect an investor to understand what they're investing in?

keybored• 7 months ago

I never talk to people who don’t wear suits.

obruchez• 7 months ago

It's difficult to know what people really believe, especially after only a few minutes of discussion, but I would say most people I talk to don't believe AGI is even possible. And they probably think their life won't be changed much by LLMs, AI, etc.

roenxi9• 7 months ago

I haven't heard a good argument for why AGI isn't already here. It has average humans beat and seems generally to be better-than-novice in any given field that requires intelligence. They play Go, they write music, they've read Shakespeare, they are better at empathy and conversation than most. What more are we asking AI to do? And can a normal human do it?

dmurvihill9• 7 months ago

I believe AGI is possible. Also that LLMs are a dead end as far as that goes.

danybittel• 7 months ago

From the article:

...AI is currently the subject of great enthusiasm. If that enthusiasm doesn’t produce a bubble conforming to the historical pattern, that will be a first.

lawn2• 7 months ago

That AI have the potential to be extremely disruptive does not prevent the current speculative boom to be a bubble.

People seem to have forgotten about the dotcom bubble.

re-thc2• 7 months ago

and you didn’t even _talk_ to a bear?

You know how to? What language does it speak?

YetAnotherNick• 7 months ago

artificial intelligence has the potential to be one of the biggest technological developments of all time, reshaping both daily life and the global economy.

This seems like a factually correct sentence. Emphasis on "potential".

bitwize• 7 months ago

AI is changing the world and has changed the world already.

See, AI is a field... and it's also a buzzword: once a technology passes out of fashion and becomes part of the fabric of computing, it is no longer called AI in the public imagination. GOFAI techniques, like rules engines and propositional-logic inference, were certainly considered AI in the 1970s and 1980s, and are still used, they're just no longer called that.

The statistical methods behind machine learning, transformers, and LLMs are certainly game changers for the field. Whether they will usher in a revolutionary new economy, or simply be accepted as sometimes-useful computation techniques as their limitations and the boundaries of their benefits become more widely known, remains to be seen but I think it will be closer to the latter than the former.

sandworm1012• 7 months ago

One upon a time in SF i was told that human-driven cars would be illegal, or too expensive to insure, by the end of the decade. That was last decade. The modern tech economy is all about bubbles biult and sustained by hype people. Vertical farming. Pot replacing alcohol. Blockchains replacing lawyers. The metaverse replacing everything. Sure, we are in an AI bubble but we aslo ride atop a dozen others.

AI data centers in space? In five years? Really? No fiber connections? Does any sane person actually believe this? No. But if that is what keeps the billions flowing upwards then who am I to judge.

lynx975• 7 months ago

Not just in SF. "Journalists" love to pick up these enflated futuristic projections and run with 'em, since they sound so cozy and generate clicks. I still remember the "Google Car" craze from the early 2010er years. And if you tell people who read and believe this futuristic nonesense that it is enflated, you get pushback, because, yeah, why should a single person know better then a incentivized journalist...

TheAceOfHearts• 7 months ago

I'm quite skeptical of the data centers in space claim, but I think a proof of concept can certainly be achieved in five years. I'm less convinced that we'll ever see widescale deployment of data center satellites.

And to be fair, I've read that Google's timelines for this project extend far beyond a 5 year horizon. I think it's a rational research direction for them, since it gets people excited and historically many space-related innovations have been repurposed to benefit other industries. Best case scenario would be that research done in support of this data centers in space project leads to innovations that can be applied towards normal data centers.

tim3332• 7 months ago

You can be a bear and still think AI will be big one day. It's quite plausible that LLMs will remain limited and we don't find anything better for decades and the stocks crash. But saying AI will never be a big thing is just unrealistic.

Yizahi3• 7 months ago

I think we should split definition somehow, between what LLMs can do today (or next few years) with how big a thing this particular capability can be (a derivative of the capability). And then what some future AI could do and with how big a thing that future capability could be.

I regularly see people who distinguish between current and future capabilities, but then still lump societal impact (how big a thing could be) into one projection.

The key bubble question is - if that future AI is sufficiently far away (for example if there will be a gap, a new "AI winter" for a few decades), then does this current capability justify the capital expenditures, and if not then by how much?

cmiles8• 7 months ago

There’s not much serious debate on IF there’s a bubble. There is and it’s a big one.

The debate is more on what happens from here and how does that bubble deflate. Gradually and controlled where weaker companies shut down and the strong thrive, or a massive implosion that wipes most everyone in the sector out in a hard reset.

fedeb95• 7 months ago

about AI replacing coders, the question is not if it is doing so, but if the companies where it does so extensively will be more profitable then the others.

dust423• 7 months ago

The question is, can SV extract several trillion dollars out of the global economy over the next few years with the help of LLMs and GPUs? And the follow-up question: will LLMs help grow the global economy by this amount - because if not, then extracting the money will lead to problems in other parts of the world. And last not least, will LLMs -given enough money to train them on ever bigger data sets- magically turn into AGI?

IMHO for now LLMs are just clever text generators with excellent natural language comprehension. Certainly a change of many paradigms in SWE. Is it also a $10T extra for the valley?

Madmallard• 7 months ago

there is no comprehension

dust423• 7 months ago

I intentionally didn't say AI but LLM because for me the word 'intelligence' is misleading. But LLMs are definitely a leap forward in NLP and what other word for 'comprehension' would you use?

bigmealbigmeal• 7 months ago

This is a very strong, explicit statement in response to someone using the term rather casually. Can you explain why you are so sure?

I do think you need to define 'comprehension' in order to be certain. A statement fitting the form of "it doesn't comprehend, it just X" is incomplete, because it fails to explain why X is not a valid instance of comprehension.

beloch• 7 months ago

"We see both sides – genuine infrastructure expansion alongside financing gymnastics that recall the 2000 telecom bust. The boom may yet prove productive, but only if revenue catches up before credit tightens. When does healthy strain become systemic risk?"

---------------

This was quoted in the article and it says something really important very succinctly. Was the internet transformative? Absolutely. A lot of companies had solid ideas, spent big, and went tits up waiting for the money to roll in.

AI can be both "real deal" and "bubble" simultaneously.

weevil• 7 months ago

I don’t know any more about AI than most generalist investors.

This statement is redundant; the article screams with the author's ignorance.

curtisblaine• 7 months ago

The real question is: if this is a bubble and it explodes, will interest rates of common people with a mortgage shoot up? If yes, some heads better be rolling for real this time. All other considerations are secondary.

asimpletune• 7 months ago

The AI/LLM movement is either utterly transformational or it’s not. By the former I mean there is no daylight between it and the latter.

If it’s not transformational then this is a bubble and the market will right itself soon after, e.g buying data centers for cheap. LLMs will then exist as a useful but limited tool that becomes profitable with the lower capex.

If it is transformational then we don’t have the societal structure to responsibly incorporate such a shift.

The conservative guess is it won’t be transformational, that the current applications of the tech are useful but not in a way that justifies the capex, and that some version of agents and chat bots will continue to be built out in the future but with a focus on efficiency. Smaller models that require less power to train and run inference that are ubiquitous. Eventually many will run on device.

I guess there’s also another version of the future that’s quasi-transformational. Instead of any massive breakthrough there’s a successful govt coup or regulatory capture. Perfectly functioning normal stuff is then replaced with LLM assisted or augmented versions everywhere. This version is like the emergence of the automobile in the sense that the car fundamentally altered city planning, where and how people live, but often at the expense of public transportation that in hindsight may have sorely been missed.

halnine0001• 7 months ago

Perfectly functioning normal stuff is then replaced with LLM assisted or augmented versions everywhere

That sounds like a total nightmare

aaa_aaa• 7 months ago

Too long and aouthor does not have a clue on the fact that currently generational models are almost only useful for software development. Other than that it is mostly fluff.

reallyaaryan• 7 months ago

it always was

mixcocam• 7 months ago

The amount of flak that this article is getting on HN is telling of something. Not sure of what, but it's for sure indicative of something.

donohoe• 7 months ago

For anyone who hasn’t read it yet, you should know that the author never answers that question.

lazarus01• 7 months ago

There is $8 trillion said to be earmarked to build 100 AI data centers[1]. At 10% hurdle rate, the industry will have to generate $800 billion a year to pay it off, while GPUs are replaced every three years by faster chips.

If you watch Ilyas recent interview, “it’s very hard to discuss AGI, because no one knows how to build it yet[2]”.

[1] https://finance.yahoo.com/news/ibm-ceo-says-no-way-103010877... [2] https://youtu.be/aR20FWCCjAs?si=DEoo4WQ4PXklb-QZ

charlescearl• 7 months ago

The term “populist demagoguery” always calls to mind Report on an Investigation of the Peasant Movement in Hunan https://www.marxists.org/reference/archive/mao/selected-work...

"Yes, peasant associations are necessary, but they are going rather too far."

Is it a bubble? Maybe it’s just the landlords up to the old tricks again.

d0liver• 7 months ago

TL;DR is "I don't know" with a dash of "Innovative tech usually creates bubbles and I think we can all agree that AI is a fucking revelation"

m0llusk• 7 months ago

To build it requires companies to invest a sum of money unlike anything in living memory.

Do we know this? Smaller more carefully curated training sets are proving to be valuable and gaining traction. It seems like the strategy of throwing huge amounts of data at LLMs is specific to companies that are attempting to dominate this space regardless of cost. It may turn out that more modest and better optimized methodologies will end up winning this race, much like WebVan flamed out taking huge amounts of investment money with them but now Instacart serves the same sector in a way that actually works robustly and profitably.

sshadmand2• 7 months ago

What you make of this memo really depends on who you are and how you're positioned. The dot-com era was absolutely a bubble. Tons of companies died, but the internet itself didn't go away, and the people who backed the right companies did extremely well. The 2007 housing bubble, on the other hand, was a totally different kind of event: broad, systemic, long lasting, and painful for almost everyone.

AI looks a lot more like the former. Some companies will fail, valuations will swing, but the underlying technology isn't going anywhere. In fact, many of the AI firms that will end up mattering are probably still undervalued because we're early in what will likely be another decade long technology expansion.

If you're managing a portfolio that needs quick returns and can't tolerate a correction, then sure, it probably feels like a bubble, because at some point people will take profits and the market will reset.

But if you're an entrepreneur or a long-term builder, that framing is almost irrelevant. This is where the next wave of value gets created. It's never smooth and it's never easy, but the long-term opportunity is enormous.

1vuio0pswjnm7• 7 months ago

"Coding, which we called "computer programming" 60 years ago, is the canary in the coal mine in terms of the impact of AI."

And before that

"Grace Hopper: [I started to work on the] Mark I, second of July 1944. There was no so such thing as a programmer at that point. We had a code book for the machine and that was all. It listed the codes and what they did, and we had to work out all the beginning of programmingand writing programs and all the rest of it."

"Hopper: I was a mathematical officer. We did coding, we ran the computer, we did everything. We were coders. I wrote [programs for] both Mark I and Mark II."

http://archive.computerhistory.org/resources/text/Oral_Histo...

qubex• 7 months ago

“Remember the market can remain irrational longer than you can remain solvent.”

roncesvalles4• 7 months ago

Coding, which we called “computer programming” 60 years ago, is the canary in the coal mine in terms of the impact of AI. In many advanced software teams, developers no longer write the code; they type in what they want, and AI systems generate the code for them. Coding performed by AI is at a world-class level, something that wasn’t so just a year ago. According to my guide here, “There is no speculation about whether or not human replacement will take place in that vertical.”

This right here is the pinpoint root cause of the speculative bubble. Although many people believe this to be true, it simply isn't.

liampulles• 7 months ago

Coding, which we called “computer programming” 60 years ago, is the canary in the coal mine in terms of the impact of AI. In many advanced software teams, developers no longer write the code; they type in what they want, and AI systems generate the code for them. Coding performed by AI is at a world-class level, something that wasn’t so just a year ago. According to my guide here, “There is no speculation about whether or not human replacement will take place in that vertical.”

I'm starting to believe that AI coding optimism/pessimism maps to how much one actually cares about system longevity.

If a given developer just takes on board the demands for speed from the business and/or does not care about long-term maintainability (and I mean hey, some businesses foster that, and scaling quickly is important in many cases), then I can totally understand why they would embrace AI agents.

If you care about theory building, and domain driven design, and making a system comprehensive enough to extend in a year or two's time, then I can understand the resistance for the AI to let-it-rip. I admit to falling in this camp.

Am I off the mark here? I'd really like to hear from people who care about the long term who also let agents run relatively wild.

supongo• 7 months ago

I've had some success in using Claude Code, with caveats.

To give some context - I started developing a tactical RPG. I had an MVP prior to using Claude Code. I continued to work on the project, but lost motivation due to work burnout and prioritizing other hobbies.

I gave Claude Code a try to see whether it's any use. It helped more than I expected it to - it helped me produce something while dealing with burnout by building on the MVP I developed prior to AI assisted development.

The main issues I ran into were:

1) A lot of effort into reviewing the output. Main difference from peer review is that there's quicker feedback.

2)It throws out some absolutely wild solutions sometimes. It build on my existing architecture, so it was easier to catch issues. If I hadn't developed the architecture without AI assistance, things could have gone badly.

3)I only pay for the $20 Claude plan. Anything useful Claude produces for me requires it to consume a lot of tokens due to back-and-forth questions and asking Claude to dig into source file.

The most significant issue I ran into with Claude is when it suggested solutions I don't have the background to review. I don't know much about optimization, so I ran into issues with both rendering and the ECS (entity component system) library. Claude gave me recommendations, but I didn't know how to evaluate the code due to lacking that experience.

Claude was good for things I know how to do but don't want to do. It's been helpful when I want to work on something without being motivated enough to put 100% (or even 70%) into it.

If it's things I don't know how to do (like game optimization) it's harmful.

laacz• 7 months ago

An economist friend recently said. If it bursts, it's definitely a bubble. If it does not burst, then it's not a bubble.

Is it a bubble?

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