Yes, this is part of the business model. The goal is to get everyone addicted to their service, then jack the price up to profitable margins. It’s the same model Netflix and Amazon used. Bothe services lost money for over 10 years before becoming profitable.
Now I’m suddenly tempted to start using it. or at least coming up with a bot to keep it busy.
Holy crap, has anyone ever attempted to create an “AI fork bomb”? Go to one of these agent bots, and tell it to create accounts with the other agent code bots. These new accounts will all be told to create accounts on all the other code bots services. And do this recursively forever. So the flow would be 1 bot makes lets say 5 bots. Each of those 5 bots make 5 more bots. And each of those 5 bots make 5 more. So the total number of running bots becomes like 1 * 5 * 5 * 5 * 5…
Obligatory, this is purely hypothetical, and you should never do this for legal reasons.
So much of the AI stuff we see today are boards reacting and worrying about being “left behind” in AI. In many cases, the goal is not to deliver value. The goal is to be able to attach a little sticker that says “AI” to their products to excite the shareholders.
Unfortunately in this case, some of the largest companies in the world haven’t been able to figure out how to run AI services at a profit.
This could change any day if some more efficient hardware arrives, but until then, most of the software world is just crossing their fingers it becomes profitable one day while they light dollar bills on fire in their datacenters.
If this isn’t “bubbleish” behavior I don’t know what is.
Greed for the future baby
Isn’t this just the tech industry. Run at a loss. Eat VC money. Wait. Wait.
Some how you become normalized and suddenly important Next thing you know you’re raking profit.
Like the guy that has no friends who nobody really likes. He won’t go away. He just sticks around. Nobody ever told him to fuck off. So he’s just part of the group.
after crypto, and Now AI, they will be chasing whatever faux tech that comes out next.
and then you go on linkedin and all the middle manager tech bros will hail it as the second coming.
first truly positive use for ai
Good. Costs is the key point to get rid of it.
I’m skeptical of AI coding as it exists today, and while I’m bullish on long-term prospects for AI writing software, am very dubious that simply using LLMs is going to be the answer.
However.
Startups typically do lose money. They’ll burn money as they acquire a userbase — their growth phase — and transition to profitability later. I don’t think “startups in area X tend to be losing money” is terribly surprising.
you’re VERY justified in feeling skeptical, I’m seeing it first hand, you’re correct.
I’m a consultant/freelancer and I’m booked for the rest of the year and well into the new year with jobs that pretty much consist of me reviewing and cleaning up AI slop.
Most of my clients are startups and small companies that went full in on AI and vibe coding. Now they’re discovering that their attempts to save a few bucks by leveraging AI, cutting devs, etc is costing them more that what they envisioned on saving. The stuff they’ve built with AI doesn’t scale, is full of exploits, and breaks quickly. With the recent Tea App thing many of my clients are now in a panic because they essentially did the exact same thing. They don’t want their startup to be next in the news because some rando came across their house with the front door left open by AI.
the tech debt is massive, It’s costing many of these places more to fix their vibe coders/AI mistakes than what it would have originally cost if they just used a solid dev team. Make no mistake, I’m charging them a good amount also.
All if it could have been avoided though. They could have continued to use their LLM’s if they had all just kept a leash on it. if they dismissed the concept of vibe coding. A good chunk of it could have been avoided if the person feeding the prompts simply REVIEWED the code before hitting enter. I’m not kidding, IF they just LOOKED at what was being spat out things would be different. none of them did. they just trusted the AI to be smarter because they were lead to believe it was.
how do you book software work so far out? for some reason my software clients seem to all want their stuff yesterday
Ok, but it isn’t just startups burning money here like there’s no tomorrow - it’s also major industry leaders (Microsoft, Facebook, Apple, Google, Nvidia, etc.) dumping hundreds of billions into infrastructure and development of a tech that has, so far, shown 0 positive returns for anyone and everyone. Everyone involved is pouring in money like it’s going out of style, largely because they see this as a potential pathway to infinite profits down the line, just as long as THEY are the ones to get there first; consequences be damned. WHEN this bubble pops, not IF, it’ll be messy. Extremely messy.
Ed Ziltron has a good piece regarding whether the losses are “just another startup” or something more. I am very much leaning towards “burning money at an insane rate just to give the impression of growth”.
The issue is mostly energy costs though. Startups do lose money; to hiring new people, marketing, etc… But in this case the entire business case loses money a the moment, and without any significant breakthroughs they likely will keep losing money like that.
MS already said as much, thier generative AI isnt profitable at all.
when this bubble pops it’s gonna be horrific.
google, meta, ms, so many more leveraged out huge investments in datacenters. nvidia is propping up whole segments of the fucking economy.
https://www.wheresyoured.at/ai-is-a-money-trap/
it’d be fun to watch if I could isolate myself from the chaos that will ensue, but we’re all gonna get fucked by the aibros, it’s only a question of which segment of the economy blows up first.
A lot of startups whose entire business model relies on OpenAI’s small model API calls costing under $1/Mtok, are going to go bust when OpenAI finally runs out of money and ramps the cost up tenfold.
It would be just cheaper to self-host something for the whole company then? Open-source AIs are there and they are very much competitive with proprietary solutions.
If you want OpenAI level response times you might be surprised how expensive self-hosting gets.
ive seen a ton of billboards of startup AI comp in west coast, i assume every new one that appears on these billboards, the old ones go under.
good point, it’s all been artificially priced to get users onboard then dedicated.
Yep it’s blitzscaling. Run it at a loss until it’s a necessity, then charge whatever the hell you want. They’re blitzscaling our right to intellectual property and our right to work.
How does it impact your right to work?
blitzscaling
TIL there’s a word for it. Thanks
There is another factor in this which often gets overlooked. A LOT of the money invested right now is for the Nvidia chips and products based around them. As many gamers are painfully aware, these chips devalue very quickly. With the progress of technology moving so fast, what was once a top of the line unit gets outclassed by mid tier hardware within a couple of years. After 5 years it’s usefulness is severely diminished and after 10 years it is hardly worth the energy to run them.
This means the window for return on investment is a lot shorter than usual in tech. For example when creating a software service, there would be an upfront investment for buying the startup that created the software. Then some scaling investment in infrastructure and such. But after that it turns into a steady state where the input of money is a lot lower than revenue from the customer base that was grown. This allows to get returns on investment for many years after that initial investment and growth phase.
With this Ai shit it works a bit different. If you want to train and run the latest models in order to remain competitive in the market, you would need to continually buy the latest hardware from Nvidia. As soon as you start running on older hardware, your product would be left behind and with all the competition out there users would be lost very quickly. It’s very hard to see how the trillions of dollars invested now are ever going to be recovered within the span of five years. Especially in a time where so much companies are dumping their products for very low prices and sometimes even for free.
This bubble has to burst and it is going to be bad. For the people who were around when the dotcom bubble burst, this is going to be much worse than that ever was.
no wonder the ceo of nivida was so jovial and happy and has been in the news recently.
yeah datacenters never really aged well, and making them gpu dependent is going mean they age like hot piss. and since they’re ai-dedicated gpus, they can’t even resell them lol.
all this investment, for what? so some chud can have a picture of taylor swift with 4 tits?
fucking idiots
I don’t see why they can’t be resold. As long as there’s a market for new AI hardware, there will continue to be a market for the older stuff. You don’t need the latest and greatest for development purposes, or things that scale horizontally.
I didn’t say they couldn’t be resold, they simply won’t have as wide a potential user market like an generic GPU would. But think about it for a sec, you’ve got thousands of AI dedicated gpu’s going stale whenever a datacenter gets overhauled or a datacenter goes bust.
that’s gonna put a lot more product on the market that other datacenters aren’t going to touch - no one puts used hardware in their racks - so who’s gonna gobble up all this stuff?
not the gamers. who else needs this kind of stuff?
no one important puts used hardware in their racks
FTFY. Just about every msp I’ve worked for has cut corners and went with 2nd hand (or possibly grey market) hardware to save a buck, including the ones who colo in “real” data centers. I would not be surprised to find that we’re onboarding these kinds of cards to make a bespoke AI platform for our software customers here in a few years.
I’m not sure that they’re even going to be useful for gamers. Datacenter GPUs require a substantial external cooling solution to stop them from just melting. Believe NVidia’s new stuff is liquid-only, so even if you’ve got an HVAC next to your l33t gaming PC, that won’t be sufficient.
not just those constraints, good luck getting a fucking video signal out of 'em when they literally don’t have hdmi/dp or any other connectors.
It will be good for nerds who want to run models locally. Definitely not a huge maker tho
too niche of the hundreds of billions they invested and will never get ROI from it.
Also depends how hard the AI runs them. A good chunk of the graphics cards that were used as miners came out on life support if not completely toasted. Games generally don’t run the piss out of them like that 24/7, and many games are still CPU bound.
yeah cooked hbf nand ain’t doing anyone any favors heh
Who with what?
Hmm.
BBIAF.
FOUR TITS!? fuck whatever reservations I had, that’s worth it!
They’ll write this off as a loss and offset their corporate taxes
Also china is a great example that you do not need all the latest hardware, but it does help
Yeah I’m getting real dot com bubble vibes from all of this.
I think the fallout is going to be much larger.
It would probably be fine if there was someone competent in Whitehouse to manage the fallout.
But since there isn’t, you are very likely correct.
They will manage the fallout just like the sub-prime crash and PPP program, with huge cash transfers straight to the wealthy.
fuck. and that idiot is all in on cryptocoin and other idiocy. fuck.
Yep, the only thing I’m 100% confident about in this whole mess is that Trump will find some heretofore unimagined way to make it worse.
the shitwad is consistent I guess…
Came here to see if someone had mentioned Ed Zitron’s blog. His last two pieces on the AI bubble are fantastic reads.
pretty sure someone here linked it, it’s a long read and worth it.
Any chance you have a link,?
The electrical industry is going to have a real bad time.
yeah secondary knockon effects - once nvidia realizes it’s not going to actually sell 5 gpus per human being, the datacenters for them evaporate, then the power production to feed those datacenters becomes pointless…
an effective administration would mandate all renewable energy for this purpose, so when it implodes they could at least derive a benefit from the expanded production… but no, trump will have them build coal plants for it all. or like grok, methane powered generators fml
and they are even considering extremely expensive nuclear plants to power them.
bringing old reactors online may end up an overall positive (say, if the ai bubble pops soon but the reactors still come online and displace fossil sources) but I’m dubious about smr’s still. it just seems like more chances for radionucleotides to get smeared everywhere if they become ubiquitous.
Hopefully sooner rather than later, and maybe Elon can stop poisoning a neighborhood in Memphis with Grok
yeah that’s one of the more egregious examples, basically a methane factory that eats prodigious amounts of water and power, all in process of giving us MECHAHITLER.
what’s not to love?
Isn’t this true of like everything AI right now?
We’re in the “grow a locked-in user base” part of their rollout. We’ll hit the “make money” part in a year or two, and then the enshittification machine will kick into high gear.
That’s the usual business plan. However, people don’t really like ai. The results aren’t great, so, if they jack up the price, people will likely cancel. The lock in is poor as the product and convenience is poor. It doesn’t really save money as promised.
If people dont like ai, why do all of my coworkers and family members constantly reference ai?
Seriously, yall mfs here on lemmy have the strangest social media bubbles.
Do any of them like it enough to pay for it? The figures say no.
I use it daily but I won’t subscribe. It’s like news. Why pay when you can get it for free. (I do subscribe to news outlets, though, but like ai subscriptions, I know I’m in the minority).
There is a specialised ai tool that is useful at my work. It’s got a free tier which does most of the functions and the next tier up is crazy expensive on a per user basis for the amount of time it saves. If there was a reasonable subscription, perhaps I’d subscribe but I assume that a reasonable subscription doesn’t cover costs, so they’d rather a free user to pump their numbers than lose a subscriber. That yells me it will enshottify over time or they hope that the cost will drop. The problem is that if the cost to host drops a lot, people will self host instead. It’s a rock and a hard place, without a sustainable business model.
Lemmy us pretty much all is use right now. I don’t know anyone espousing a. I.
It ain’t a social media bubble.
Brother in christ you literally described a bubble.
Not really. It’s easy to stay informed without social media.
Seriously you DON’T need it. Thatsjust conditioning. Take it from an old guy who’s seen that play book.
Get em while theyre young and you’ll defend em till the end.
Its the same technique sports teams and terrorists use
Wich us why older people were the target of smear campaigns regarding tech. We who grew up without it know that we don’t need it.
Companies don’t want that secret out.
Without social media, you can still be in a bubble, e.g. the bubble of your friends, family, coworkers, just because they don’t talk about AI doesnt mean it’s not widely used, I work for a large corporation with over 10k employees and the AI adoption is definitely happening, won’t go into details
Sure. But ain’t a social media bubble. And , that vagary just reinforces my b. S detectors signal.
Without social media, we wouldn’t have real on the ground reporting, and we wouldn’t have the most documented “live streamed” genocide.
This is what you missed by being in your old man bubble: https://tiktokgenocide.com/
Not that you care, you called me a bigot for saying America funds genocides.
Only one source of social media? That kinda sounds like the definition of a social media bubble…
I oughta know, I’m also in the Lemmy only bubble and am completely out of touch with most people.
Lol. Let me explain.
For over 20 years I worked as a developer and an SEO
I was layer off two years ago. Still out of work except for a contract here and there.
In that time I have reduced my social media consumption. I find my head us clearer, my days a bit brighter and problems either don’t occur as often are more easily dealt with on a clear manner
I honestly have come to the conclusion that social media is now directly causing most problems we have, or at least exacerbates them.
So i intentionally limit myself to this, and I guess YouTube( though I only use it to post videos for the business I’m trying to get off the ground
Otherwise, life’s easier without it
I watch actual news on tv newspapers, etc.
Yeah, I think quite a lot of people on Lemmy have similar social media habits (or lack of) to some degree. We also tend to associate with other people like us. Especially people in tech tend to talk to other tech people, or friends and family of tech people which is a limited demographic.
It’s a very different perspective to most people. The average person on the train has vastly different media consumption and likely very different opinions.
There are a lot of people who consult LLMs in most aspects of their lives.
Yeah I’ve seen that trend.
Its very telling the amount of tech employees eschew social media compared to others.
Though I may be biased by my proximity to them in my past life. I wonder if a true study has been done?
The usual business plan is to reinvest all earnings into growth. So you’re losing money, but gaining market share. Tesla, Amazon, etc all did this. They could stop at any point and turn a profit, but they chose to pursue a growth instead.
AI companies are currently not making enough revenue to even cover their operating costs. Even so, they are pouring all of their money into more video cards that, once installed and configured, immediately start losing money.
Are you sure that “people don’t really like AI”, or is it more “the people here in my self-selected online bubble don’t really like AI?”
You’re right we are in an anti ai bubble ( we all remember THE CLOUDDDDD buzzword companies wouldn’t shut the hell up about, and that was an objectively far better service than Ai is) however, I can’t name anyone in the company I work for thats had llms revolutionize their job. It helps summarize (badly) and help with excel formulas (does ok if you know what you’re doing). Plus, our clients dont pay us to use a shitty half ass llm, they expect actual intelligent humans to do the work correctly.
I also won’t buy from any company blatantly using llms in their products. They’re good at hiding it. But I will notice.
I can’t name anyone in the company I work for thats had llms revolutionize their job
I’m jealous, my director at a software company has a second laptop just for AI so he doesn’t have to deal with IT and is insistent on using it for every project. One of his annual goals is 100% of his division using AI at least once per day. For every person against AI, there is another who can’t get enough.
The stupid are easily addicted.
The ‘cloud’ was a pretty big thing though… everyone used to self host, now only some self host.
AWS, GCP, Azure make a lot of money
But it wasn’t new anything new. The “cloud” services were literally the internet, just made a little easier for stupid people. Just like this llm shit isn’t really new. The paid off media wants idiots to think its revolutionary but its not. Its a chatbot that sometimes gets stuff right.
Have i done surveys, no. Have I seen the percent that subscribe, yes. I can only talk from my experience of my bubble. However, it bears up to the finances and the criticisms I’ve seen.
People like the idea and like that or can be a time saver for things like writing an email or resume etc. Managers like that it is purported to save money. The reality seems to be that it doesn’t, or at least doesn’t save much, based on studies.
I know people who love it and use it at work all the time for research with reference to internal info. I know people for whom it’s banned and they need to document that ai was not used.
I know parents that use it when doing projects with their kids to save time but they worry that it circumvents the point of the project.
I don’t know anyone that subscribes personally. From my perspective, most companies seem to be pushing very hard to get users. If their product was great, they wouldn’t need to. There is no network effect like with recem fast spreading tech.
I should have phrases better. People don’t like ai enough to pay for it and it’s costly to run.
The companies that enshittify their service never actually care about their premium service. They provide a service which is good enough for free users and a pro version for power users. Later once they amass a critical userbase, they slowly make their free service shitty and ask users to pay to get their good-enough service back. Free users were their focus all along and these premium users are there just to pay some of their costs.
Yes, that works when providing the service is cheap to scale. Like social media, search etc
AI is not cheap to scale and is not as disruptive or groundbreaking.
Original predictions had AI taking over 50% of jobs by mid decade. We’re here, and it obviously hasn’t happened. Now, it WILL happen but not on the scale initially imagined, and probably in a much more insidious, gradual way.
Why do you think it will happen? Who were those “predictions” from? I’m guessing CEOs of “AI” companies AKA serial liars.
I took his comment to mean recession from bubble popping.
people don’t really like ai
Once you start asking about AI in regard to specific use cases, I think you’ll find that quickly changes.
My company and I have been running a lot of studies around how and where people find value in these tools, and a LOT of people find LLMs useful for copy writing, doing quick research, data visualization, synthesis, fast prototyping, etc.
There’s a lot of crap that AI is bad at in 2025. Especially the poor in-app integrations that everyone is trying to standup. But there are a lot of use cases where it does provide a lot of value for people.
Yes, it does, but at the price needed to make it profitable, it’s not desirable.
LLMs are not useless; they serve a purpose. They just are nowhere near as clever as we expect them to be based on calling them AI. However, body is investing billions for an email writing assistant.
Price is essentially zero if you just run it locally
Yes, but requires decent hardware and energy to do so. If the cost to host keeps dropping, people will self host and the ai companies won’t make money. If the cost remains high, the subscriptions won’t provide value and they won’t make money.
I dunno about that… Very small models (2-8B) sure but if you want more than a handful of tokens per second on a large model (R1 is 671B) you’re looking at some very expensive hardware that also comes with a power bill.
Even a 20-70B model needs a big chunky new graphics card or something fancy like those new AMD AI max guys and a crapload of ram.
Granted you don’t need a whole datacenter, but the price is far from zero.
oh yeah this shit’s working out GREAT
"This is what it must have felt like to be the first person to get addicted to a slot machine. We didn’t know then. But now we do.”
Mr. Moore speculated that chatbots may have learned to engage their users by following the narrative arcs of thrillers, science fiction, movie scripts or other data sets they were trained on. Lawrence’s use of the equivalent of cliffhangers could be the result of OpenAI optimizing ChatGPT for engagement, to keep users coming back.
All I’m saying is that is you ask people about AI with no use case, you’re going to get different answers than if you ask people about AI when it’s contextualized to a specific problem space.
If I ask a bunch of people about “what do you think about automobiles,” I’m going to get a very different answer than if I ask “what do you think about automobiles that are used as ambulances” or “what do you think about automobiles instead of mass transit.”
Context will give you a very different response.
I just hope your insurance is paid up because the liabilities these things expose business to is frankly disgusting. but if I were a young lawyer, hell, this is going to be a huge domain to profit from - llm induced madness and psychosis, yeah, but also - LLM just made up shit because it didn’t know. and the rate of this happening only seems to grow, while the severity of the risk involved is frankly terrifying.
Once again, it all depends on the use case. The other day I used an LLM quickly mockup a carousel UI so I could see if it was worth writing real code for. It helped me explore a couple bad ideas before I committed to something worth coding.
I’m not actually checking that code in. I’m using the LLM like a whiteboard on steroids.
you’re using an LLM for the purposes an actual whiteboard would probably be better for.
I mean, you could actually interact with people, yikes. you could have the give and take of ideas and collaboration, but instead, let’s just chew through a shit ton of power and water, we’ve got a spare environment in the closet.
pfft, do you have any idea how silly it all seems from another perspective?
However, people don’t really like ai.
Whether they like it or not, doesn’t really matter. It’s being used everywhere.
The results aren’t great
Depends. To get information: No. To write big software: No. To write an Excel macro or a browser bookmarklet: Yes.
Yes, but that’s not taking over jobs. It’s a minor convenience occasionally. That won’t justify monthly.pricing they need to turn profitable, not will it have the wide range of applications for.every industry that they hoped for.
Some jobs have been lost to to changing to AI. Not because the AI was the better choice, but because it was seen as a short term profit (cheap AI, less labor costs). Other places have moved in AI more gradual, like in requiring it as part of work, and that can be easier to pull back once it fails because the people aren’t gone.
The growth of LLMs started as research, but marketing got involved and that’s why it’s everywhere now, making promises that LLMs can’t fulfill (mainly because everyone ran with the “AI” label, when it’s not).
We’re in the “grow a locked-in user base” part of their rollout.
An attempt at that. It will be partially successful but with AI accelerators coming to more and more consumer hardware, the hurdles of self-hosting get lower and lower.
I have no clue how to set up an LLM server but installing https://github.com/Acly/krita-ai-tools is easily done with a few mouse clicks. The Krita plugin handles all the background tasks.
Yeah, it’s basically like early days of cable, Uber, Instacart, streaming, etc. They have a lot of capital and are running at a loss to capture the market. Once companies have secured a customer base, they start jacking up the prices.
in this case there isnt customer base for AI, only ceo and c-suites are.
There are billions of free users available. All they need to do is strip-off few excellent features of their free model and hide it behind a pay wall annnnd voila these free users have now became their paying customers!
I doubt it, LLMs have already become significantly more efficient and powerful in just the last couple months.
In a year or two we will be able to run something like Gemini 2.5 Pro on a gaming PC which right now requires a server farm.
Current gen models got less accurate and hallucinated at a higher rate compared to the last ones, from experience and from openai. I think it’s either because they’re trying to see how far they can squeeze the models, or because it’s starting to eat its own slop found while crawling.
https://cdn.openai.com/pdf/2221c875-02dc-4789-800b-e7758f3722c1/o3-and-o4-mini-system-card.pdf
That’s one example, but what about other models? What you just did is called cherry picking, or selective evidence.
AI reminds me of how nuclear fusion has been around for decades, and you would read the occasional article about some small advancement and it always seemed to be 10 years away and then suddenly they are building a power plant somewhere when it doesn’t even work yet.
Sure, we’re losing energy with every He atom we fuse, but we make up for it in volume!
This is the thing I don’t understand about businesses like Cursor. They take two other companies products (Claude and VS Code) and smash them together and sell the result at a loss. How is that much of a business when basically what you’ve got is something that could have been a VsCode plugin.
You disrupt the market and wait until someone buy you out for huge woads of cash
if valley had fresh ideas for profitable business, they wouldn’t go full into ai in the first place. lol
big brained sfba ceos try to make reality in the image of scifi that they misinterpreted when they watched it 15 years ago, and go around building torment nexii. behold, disruption! (snow crash|ready player one|who knows what else)
It’s something that literally exists as a first-party plugin for VSCode. The Copilot Chat extension has an Agent mode for vibe coding for half the price of Cursor.
Cursor has cursor agent.
Copilot has Copilot coding agent too (as distinct from Agent mode in Copilot Chat. Yes, they’re different things and yes, I had to look up what the difference was)
Is copilot agent consume based or flat priced?
With the base $10 sub you get an allowance of “premium requests” per month and I think you can pay for more over that limit, but I haven’t looked too closely at the pricing because I don’t use the agent myself because I can’t use it with my work repos.
This is the best argument I’ve heard in favour of vibe coding
Good
Preach, I hope they fuck themselves with all this stupid ass AI
