What we're talking about when we talk about the AI bubble

One. The AI stock bubble. Analogous to, but far larger than, the dot-com bubble. The main thesis here is that, regardless of the future economic impact of AI in general or large language models in particular, the current state of affairs around companies like Anthropic, OpenAI, xAI, and Meta is unsustainable, that there is virtually no chance of the industry becoming profitable enough quickly enough to justify the level of spending, especially associated with data centers, before bills come due and the current generation of chips becomes obsolete. The essential follow for this story has long been Ed Zitron. Two. The AI hype bubble. Closely related to the AI stock bubble, with a strong symbiotic relationship. You could argue that one cannot exist without the other, but they are still very much distinct. Though it is sometimes couched in pseudo-technical terms, the hype bubble is largely magical, with claims ranging from the silly to the literally apocalyptic. Three. Benefits and costs.…