I just upgraded from a 1050 to a 1660 Super… luckily for me I’ve never been concerned with having a super high end rig and am delighted with my little £75 upgrade.
They just announced GPU prices are rising even more soon so you probably made the best call I'm thanking myself I snagged a 5080 from best buy last year for 900 that same GPU is close to 2k now I just wished I had got a better SSD last year 😔
Wallstreetbets is arguable the most entertaining subreddit that's still not been banned. It's the last holdout of when Reddit was a unmoderated wild west.
The sheer amount of comical abuse that happens over there is hard not to laugh at. Someone will work for an hour on a case for investing in some company or ETF, post a screenshot of their positions and the top comment will just be something like this:
While Palantir is shit I wouldn't invest in regardless, there are bigger regrets to have in the market atm. For one, Micron (doesn't need introduction here) got hyped all the way to $1250, and now dropped to $740. Imagine buying that at the top 👀🤕
Debt obligations will start next year for a lot of AI companies will be interesting to see how long they can survive and accounting fuckery they are going to do to make it happen.
They reigned in spending since they changed how corps are billed to by the token and they basically took companies entire yearly budget in a quarter ofc they are going to clamp on AI spending when they don't have any budget left.
Even so, if they were getting value commensurate with cost, you wouldn't see them reigning things in. The fact that so many are pulling back says a lot about the true value on offer.
That's why they are all trying to rush to IPO and pass the buck to a greater fool before they golden parachute out ahead of the crash (that is those who haven't drank their own Kool-aid and given themselves cyber-psychosis from their pet chat bots agreeing with them about everything.) That is why you see all of the scare-braging from them about how dangerous their new models are when they aren't actually doing anything the last generation of models couldn't do or making claims about them taking independent action when they are actually being highly prompted.
They won’t all crash. It’s the same as thinking that the dot.com bubble crash meant all internet enterprirses failed. Now everything is on the internet, and in the future AI will be everywhere even if there is a massive crash to half of the providers
Amazon wasn't profitable on paper for a long time because they reinvested everything. Now, instead of just an online book store, there's AWS, Prime, Alexa, Audible etc. The decision to live off funding while they could doesn't mean it wasn't a viable company.
Same way Bezos made less than 100 grand a year as CEO. All on paper. He simply didn't want to pay income tax when borrowing against his Amazon stock was cheaper. These companies have perfected the art of looking broke for tax reasons.
Yep. Everything I've seen says we have already reached the tipping point, but the actual fall takes a while to happen. A lot of investors have already started pulling their stuff out of AI companies and the big thing propping everything up is these companies passing around the same chunk of money between each other.
But no value is actually being created and the companies are using the same trick Enron did to hide debts as they create shell companies that "own" the debt to build the data centers then they basically "rent" the data center space from themselves and each other.
The outside investors who still have money in this also know it's a bubble, but think they can pull out with the bag before everything comes crashing down. Which for some of these companies will happen after IPO when they are added to things like the SMP500 or other stock groups meaning the losses are going to effect retirement accounts while the people who built the bubble run off with the bag.
Low interest rate makes borrowing cheaper, while making saving less viable. Borrowing drives inflation, as money is in higher demand and to prevent price of said money skyrocketing (something that would crash international trade) the federal bank or central bank or whatevwr your country has, prints money while when people are saving more, less money is needed to be printed.
In ideal scenario you want to have those two balanced to keep inflation in check. If too many people save because interest rates far outpace inflation (making you make more money just by having it in your accounts), ecenomy slows down. If you have it too low, too many people borrow, economy goes into inflation cycle. Generally you want interest rate in nearest percent to inflation.
However this situation was slightly different with how it worked with low interest rates. Instead of people and companies borrowing to generate growth (the silver lining of possible hyperinflation scenario), the money went into value extraction. This drove cost of living up to what we have now. All debt just went to real estate or abroad investment.
The loans from those days are essentially free, so whoever took them had free money. Instead of using it for growth, as was common for a long time (e.g. borrowing to establish a new branch in another city, generating new jobs and driving economy further, or people buying their first house, establishing family which again drives economy) this money went into said value extraction. People bought houses to rent them, which produces little to no value, I'd even argue it destroys value as people that rent are less connected to the place compared to people that own their homes, but also homeowning is a large part of how our pensions work, the fact that you do not have to pay rent or mortgage, offsetting cost of living in your pension, is massively overlooked today and we will see the fallout of it in 30 years with pensioner renting crisis. And companies just offshored production abroad, essentially bleeding the value outside - no new local or near local jobs or production, just cheaper products. This again stagnates economy as you do not really create any value.
Luckily companies figured out even better way to get free money. Subsidies. Just drive hype about something to generate public demand or lobby for something hard enough and you get subsidies. Now you operate on public money but your gains are private. E.g. Tesla or any other AI company.
It's also important to add, since the user above said he doesn't understand the basics, that all of this was only posssible because the US can print their own money, which the US decided it will be the worlds Reserve currency (Petrodollar), which leads to the entire world buying the debt the US generates.
A big reason why this is so consistently true that people miss is that the market is acting irrational because people are remaining solvent. You and everyone one losing is what actually causes the market to reflect reality. Your solvency isn't competing with the market, the market isn't a person. Your solvency is competing with the solvency of all the people that have an influence on the market, and they have much more money than you do
There's this joke about your the moment you cash out and give up on your prediction is the moment your prediction starts actually happening, and that you giving it up is what caused it. The thing is that that's kind of true, because the moment you had to give up is statistically likely to be the point that everyone else with the same idea as you also gave up, and every one of them experienced the same thing you did
The dot com bubble all over again. The websites were scams, and so were a lot of the infrastructure for them. It lead to the dot com dark fiber, cause companies in the 2000s where getting paid shitloads to lay fiber to where ever. Then a lot of those companies close. The internet didn't go away, but the waste of the companies backing it, both online and IRL did. They had to scam in new ways.
the downside of course being that huge pension funds/superannuation funds were heavily invested into these companies and lost huge when the bubble burst
That situation is even more fucked. It wasn't an optional investment for the vast majority of people. They put their money in ETFs, like every smart investor ever has told them to. Then Musk circumvented some rules and was just hand waved through the process of launching a public IPO. ETF managers were legally forced to buy into SpaceX at any price.
This was also a cornerstone of the dot com and mortgage backed securities bubble and why the retirement funds for so many Americans are wiped out on these bullshit bubbles in the first place.
well at least micron stock took a great dump recently. they basically put all their eggs in the ai memory basket as they forgot china can make memory chips cheaper.
the thing is they forgot how corporate would work, there is basically no brand loyalty.
why would they buy a significantly more expensive product(compared to available competitors) with a marginally better performance and reliability when they could get a significantly cheaper product with just marginally worse performance and reliability(but still within acceptable parameters).
i remember where my father works (a relatively large subsidiary of hp) would happily swap to an entire batch of dell when they were much cheaper while having better specs than what hp was offering(including reliability). the literal company that started the subsidiary get its own equipment replaced by its direct closest competitor.
I wish i can buy RAM right now. MF out here comparing 20$ increase in games with 200$-300$ increase in RAM like the average consumer can just make that magically affordable.
It's not because people are buying, it's because hyperscalers are.
The companies that produce dram already said years ago that they switched most of their manufacturing to HBM and are focused on hyperscalers rather than consumers. Supply just shrank massively, and Micron stopped producing ram for consumers to make more HBM.
When my friend built his current 7800X3D rig and switched to DDR5, he was like “I’m going with 64, because when I had 16 of DDR4, I eventually felt like I needed 32. So I’m going overkill on the DDR5.” And that was back when DDR5 was pretty much at its cheapest price ever.
yeah i wish I went 64. I said id just upgrade later because "ram is cheap these days". That was last June. i paid $113 CAD for that ram, that same ram from the same retailer right now is $769.99...
That's ridiculous. I've just checked and stuff I brought 3 years ago and it's 3 to 5 times more expensive 😲. Should have gone for 64 based on the price now, but would have been a bit redundant with the rest of my stuff.
How much difference does DDR5 make over DDR4, as I think 4 was still a decent amount more that 3 at the time.
I'm just glad I upgraded to 32gb a couple of years ago because I wanted BG3' Act III to load better. My strategy of only upgrading every several years to play a single new game (Fallout 4, BG3, etc.) paid off.
I did mine just before it all went stupid and put 96gb in literally just because it turned out I could get 96 and that amused me. It was cheap to do so.
I do a hybrid approach now. My gaming PC with 32 GB and my home server with 48 (wish I got 64 but ah well). This works well for me because the most RAM intensive thing I do is development and that can be done remotely on the server. I could probably downgrade my gaming PC to 24GB and be just fine because it’s only used for gaming with everything else offloaded to the server.
This wouldn’t work well for stuff like video editing or 3D rendering though.
I'm still on 8. In my defense, for my entire life, ram prices have only ever gone down. I still remember when I bought and installed my first ram upgrade, going up to a pair of 128 MB. It's a hard pill for me to swallow that this might not be the case anymore.
Airline tickets, hotel rates, wireless plans, tvs, coffee beans, bitcoins prices, etc. are just a handful of examples of volatile (up and down prices).
Shoot, even milk was cheaper in 2018 than it was in 2004.
Reddit has this weird obsession with “once evil corporate overlords have an excuse, they raise prices and lock it in forever!”.
But that just doesn’t work in pretty much any competitive industry. And there are plenty of examples of prices going up, and then down, and up, and then down.
Another one is sporting event tickets. When teams suck, prices drop. When teams get hot, they go up. And then they go back down when they suck.
Access to music has pretty much never been cheaper.
Quality, high speed internet is way cheaper than it was 20 years ago. Same with wireless plans.
The more commoditized a product, the fiercer the price competition.
Edit: no duh that chips have different market dynamics. I’m responding to the gasoline comment. The thing with chips is that there’s a relatively new application that has greatly altered demand. A stock crash likely won’t curb that demand now that so many businesses benefit from AI.
The problem is you're listing things that are easy to compete it, like how easy it is to get a cow vs produce RAM.
the RAM industry feels like a cartel at this point, there's only 3 of them, they know they will have to compete eventually, but it's not in their interest to rush it.
Well, they have openly admitted they are passing money to each other. There have been no profits up to this point. Just AI centers investing chip makers and chip makers making supply deals with AI companies/data centers. They are just passing the money back and forth. Plenty of reports show there are not many consumer products so its all pointed towards companies. But Plenty of reports also show it isn't saving companies money. And keeping in mind they are under charging to increase adoption... I don't see the money so it seems like very obvious bubble to me. Even a successful AI boom is a bubble since we didn't set up safe guards for all the fired people. We will end up with mass unemployment or everyone in underpaid jobs.
I mean that's all Reddit really is. Just people predictably saying the same things over and over again. You can pretty easily guess what the comment section is going to look like for virtually every post.
Ya it'll probably be more like a market correction.
There's still too much use of AI in all sorts of shit.
Graphic design, commercial, so many fucking online casino commericals use AI and their ads are all over YouTube.
Summaries, reverse image searches. Some other things I'm probably forgetting but this is all off the top of my head and I don't see it going anywhere just corrected.
The ones that are actually profitable and have utility will stay the low quality ones will die.
Cost are only going down if you ask for the same thing at the same quality. People are just spending more because as newer models become more capable they are asking them to do much more.
And they can't increase their price too much because there are open sources alternatives that will stay that cheap (they are just a few months behind on model strength).
It'll be like any new industry, especially any industry with government oversight. The small and medium guys will explode/fizzle, and it'll end up monopolized with a few clear "winners" that either buy out the competition, or just annihilate them through special treatment/deals/funds. Happened with telecoms, when weed is legalized anywhere, and many consumer goods.
The "correction" will just be investment severely drying up while the most powerful companies weather the storm while those that cannot get washed away.
Problem is the expenditure currently is what most companies are sitting on in reserves. But they are starting to use debt now.
Everyone is continuing the circle jerk but the issue is someone at some point is going to say 'what is the length of time to return this investment' and someone with a calculator will say 'at this rate of spend we'll never get anywhere close to the investment'
Personally for me it's all built on a great fallacy: that an LLM can become an AGI. It is nothing more than a hope
We're in peak hype.
We will see the AI bubble pop, but very slowly, then all at once.
Watch the parts vendors first. Deferred orders, deferred datacentres. KOSPI, which is mostly Samsung and SK Hynix has dropped a third in a month. This is not a good sign, even before news of data centres being put on hold occurs.
It is going to be such a blood bath. I'm at least thankful the last hype wave never got this level of adoption. For the most part, only people who opted in (even if they were aggressively sold to) got completely fucked. This one is hitting most everyone.
Once the bubble pops the whole tech scene will be fucked sideways.
Thousands of people will lose their jobs as hundreds of AI firms close and big companies rip off their AI units to minimize losses.
God knows how bad the collateral damage to other industries will be, but it’s pretty much certain we’re in for another big economic crisis, likely bigger than the pandemic’s.
This situation bears almost 0 resemblance to the subprime bubble.
They are not even the same stratosphere, the banks were leveraged like 30:1
Let's take Google, in order for Google to hit a 30:1 ratio against their current on the books assets they'd have to borrow somewhere in the range of 20 TRILLION
08 was legendarily bad, just a magnificent amount of risk.
Personally for me it's all built on a great fallacy: that an LLM can become an AGI.
This seems to be a falacy in of itself. People researching and developing AI don't expect LLMs to become AGI, just a foundational compounent that interfaces with the user. Anyone serious about this field beyond trying to sell AI hype fully expects other models and paradigms to be needed, some of which we may not have even discovered or been discussed beyond theory, and that's IF AGI is even possible or compatible with modern computer hardware.
Unfortunately, the people that are chest deep in AI research only share their findings in papers and conferences while the marketing teams promise the world and then some to anyone that'll listen
Unfortunately, the people that are chest deep in AI research only share their findings in papers and conferences while the marketing teams promise the world and then some
But that's the point. The marketing is what the markets are going off of.
I think the point he's trting to make is that the only way that the insane amount of debt these tech companies are harnessing thenselves with make sense, is if LLMs lead into AGI. (And soon, I would add. Like in less than 12 to 16 months... else its a 'pop'.
They are not so useful that they are worth their true cost, which is not $20 a month. It's much higher than that, more like $200 a month for what that 20 gets you now.
And that is not worth it for most people for most use cases. Which means there is a product there, but it's a fraction of the market size they think, which means there's zero chance of returning on that 2 trillion capex so far.
So yeah, this is all bubbles. It crashes and there are tears and on the other side of that a few businesses remain selling a solid product at a price that makes sense long term, and we all move on.
Kimi K3 appears to be regarded as the most impressive open source model and is designed to run on something around the size of a GB200 NVL72 rack. It's been reported to be an about 2 million dollar piece of hardware so lets double that to 4 million to account for other supportive hardware and space and being conservative.
Kimi K3 is priced at $15 per million tokens on provider markets. I've seen somewhere above 2000 tokens per second on a NVL72 which is >$108 per hour. It pulls about 132 kW at full draw. Commercial power is usually about 14 cents per kWh. So that's about $18 per hour. So overall it's >$90/hr after power costs or >$788000 per year. That's somewhere around or maybe above a 20% return.
all the frontier labs make a decent margin on inference. it's training new models where they're losing money. unless they're Anthropic, because they got a sweetheart deal on compute from SpaceX, so they're (allegedly) net profitable including inference and training (currently)
Only the shovel sellers are making money, and eventually that will catch up to them. The bubble pops when they can no longer sustain the hype in the face of reality.
I watched company execs lie to their employee's faces saying "eventually it will effectively be free" like the cost is going down (spoiler: it isn't). It's snake oil all the way down in its current state.
This is a really stupid way of looking at it. Most of the hyperscalers are not chasing profitability. It would not be hard for them or the frontier model labs to make a profit, they’d just have to slow capex. Anthropic posted an operating profit in Q2 of this year, on a non-GAAP basis, of half a billion on eleven billion in revenue. Because of a discounted compute deal. The frontier labs all are chasing to be the first to have a model advanced and efficient enough. There is real growth of revenues.
It’s a question of whether the capex will ever pay off at the level we’re seeing, like Amazon dumping money into infrastructure and logistics for years being unprofitable.
We are seeing the cracks. OpenAI overestimated their revenue by 90%. lol...
Once these companies start seeing that they aren't making money on their investment, that's the end. It's not going to be a pop but a slow release of air. AI isn't going away just like the internet didn't go away with the dot com bubble. You just aren't going to have 100s if not 1000s of companies hoarding gear like they are now.
I feel like its gonna be like the Simpsons episode where Bart waits patiently for Homer to open his April Fools beer, and then Bart finally gets the chance to tell Homer off, its too late as the fallout is massive
LLMs arent profitable, and to make them profitable theyre too expensive for the consumers. The bubble will pop once they run out of money to keep it propped up.
There is so much money invested in AI that billions of people would need to pay for tokens daily to become profitable... It is now 17 times larger than dot-com and that left behind the fibre optics that we use for the internet now. What is a server built for AI compute going to do other than be a server for compute.
An FYI as well is these hyperscalers aren't using their own money to do this Goldman Sachs estimates that hyperscalers borrowed half a trillion in 2026 alone for AI. That is how this will become global. Five hyperscalers now have a listed debt of 1.65 trillion dollars. These debts are also being hidden through long term contracts with data center operators and aren't being shown on balance sheets because of that.
I feel like people are expecting one of these days to wake up and all of a sudden every ai company is just completely obliterated and the whole thing just goes the way of nfts, we never use ai again for some reason. What's more likely is the big players in the business have been playing a game of chicken with who can last through more unprofitability to try and outlast the others, when a major enough one of them gives it up they'll lose any chance of really competing for the eventual top spots, the markets will lose confidence and dip, the smaller companies who can't take the market conditions will all basically get eaten up by a remaining handful of the biggest, and then once it's all consolidated and the markets settle at a lower (but still probably quite high) level, the free models get swapped out for an ads/subscription model to make the business actually viable. Or maybe if they still have some money left to throw around they might do it again on a smaller scale first. So basically ai isn't going to die off as much as its having a big fight with itself to decide who gets to be the big market leading company. At the end of it you'll still see a lot of ai in the world, less of it, and it'll be used less frivolously because it'll be more expensive, but still quite a lot.
It will be a long wait but it only takes one AI company to pop and the whole thing will collapse like a house of cards. Right now OpenAI is the most likely to fall as they're hemorrhaging money every month and only kept afloat by investments and right now they're begging to be bailed out, so I hope someone in the US will try to block the US government plan to buy 5% stake of OpenAI....
It's a circle jerk of infinite fake money and zero profits. Already reached the enshittification phase of constant price hikes. American companies can't compete with dirt cheap open-weight models from China.
I cannot stress enough how much I owe ID studios for making DOOM The dark ages so heavy to run, so I had to upgrade last summer. Just before these genuine losers decided to ruin everything for everyone.
Sk Hynix has lost more than half of it's value in less than 2 months. Micron has lost a third in the same. Many tech companies are feeling that same pain. And it's all centered at openai and all the other ai companies. They are all not making any clear profit and they are consuming more than they are producing. Practically most of these companies are sitting on volatile equity due to the fact that they are all waiting for AI to make a profit. And it's gonna be a sudden burst to the point where many of them will restructure or die rapidly.
It already did. One thing you have to know about a crash is that things will become worse before they get better, and we’re still waiting for the effects.
From what I can tell it's not going away. It's just not going to be the huge game changer people think it will be. Fight the data centers though. Bad for communities and environment.
It’s not going to burst. Big tech has deep pockets. They will absorb any major losses. There will be winners and losers, many small AI start ups will die but tech start ups dying is “Tuesday” in the US economy. Some sectors are profitable, especially in the coding deals with big businesses. There is money to be made there. They won’t be making AGI, what profits are made will be fine and a lot of crap efforts will fail. Some big data centers will get made, most never will. RAM prices will stay high for a long ass time and maybe forever. Big over hyped tech trends are super common, and come and go without a lot of gain or loss in the end. This is more of that. I think the biggest tank will be Open ai which just seems to be running off a cliff.
It will happen. that is the lesson I took away from the .com bubble and the housing bubble. All bubbles eventually pop and the buffet index being over 250% says we are due.
its already burst! IBM down 20%, STX down 40% ATH, MU down 40% ATH, CRWV 20%, GOOGLE and META down 20% since start of the year. Its currently a slow roll down until everything comes crashing down soon.
Q3 to Q4 of this year every major company will need to fund their forecasted CapEx using debt, and around the same time the fed is expected to raise their interest rates to combat trumpflation. The Fed deciding to keep rates unchanged is their way of saving the markets from disaster for now, but major AI companies like Antrhopic and OpenAI are already trying to get a government bailout worked out so that they have a back up plan for once everything inevitably fails.
The slow burn is already in affect its just a matter of time before the panic selling hits.
The dot com bubble took 5 years to burst, with two years of highest intensity. Nowadays AI companies are fully aware what is going on so they go long way to stabilize situation. It will go to hell eventually tho.
I think the game's industry has been crashing for about 2 decades now. Xbox has been dead for a year or two.
AI is seen as the new Manhattan Project for politicians, and analysts so it is not going to crash. The commercial side of it only exists for companies to get more and more data.
Every time a people generates an image or asks a dumb question or talks to LLM they think they are getting a service but they are actually providing a service.
Well, how can it happen if institutions pour more money into the trillion dollar loss sector? The deciding factor will be whether ai is capable of efficiently replacing human labour in f500 companies before they run out of funds. AI wasn't about you making silly cat videos in your phone for free. It always wanted to take your job away.
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u/gg06civicsi Ryzen 5 7600X3D | RTX 4070 Ti Super | 32GB DDR5 Jul 30 '26
It will happen right after you finally say screw it and pay top dollar for your next PC