2:33 HOOOOLY, THAT'S A MASSIVE LOSS OF MONEY RIGHT THERE!!! 0:52 That's uuuuuh... That's around 4% of the US' entire GDP. Not a good sign for the country's whole national economy. Also, amazing coverage. Simple to understand, yet informative. Subscribed!
Because you are probably invested up to your eye balls and denial is hard to swallow but I work in economics and can 100% promise you that it will pop like a balloon and you will kiss your retirement money good bye 👋
That's a conclusion, but you haven't given any real arguments for why it's not a bubble. And respectfully, I'm going with Goldman Sachs and ignoring Bill Gates on this one. Of course Bill Gates is going to claim it's not a bubble. He owns billions of dollars in Microsoft which is investing heavily in AI and one of the biggest beneficiaries of the AI stock market hype. Bill Gates is "talking his book" because he financially benefits massively from the hype. Keep in mind that Bill Gates also wasn't going around warning anyone about the dot-com bubble when it happened and look how that turned out for investors. Like I said in the video, AI is here to stay, but that doesn't mean that these company valuations are reasonable or that we aren't in a bubble right now. If investors buy now, they could easily get burned. If you want to conclude that AI is not a bubble, you have to account for a lot of things like: 1. All of the current money is being made by hardware companies who are selling the components to build AI infrastructure. This is unsustainable though because the companies buying the infrastructure and building the AI software aren't making money. They have huge losses because their product costs are massive and their sales are very low. They can't afford to keep buying AI hardware forever when they aren't making the money to support that kind of investment. The business models don't seem to work. 2. How are AI software companies going to generate decent profit margins when LLMs are virtually indistinguishable from one another? When multiple companies are selling an extremely similar product, they have to compete on price which lowers profits for everyone. Not to mention there's a ton of free and open source AI models out there that you don't even have to pay for. This means AI is at risk of lacking any real pricing power or being able to command decent profits. 3. Even the hardware providers like Nvidia won't be able to sustain this current growth. 100% year over year growth can't last forever and their 75% gross margins certainly can't either. As more competition enters the AI focused hardware market from companies like AMD and supply starts to catch up to the demand, the amount of profit margin Nvidia gets from each chip they sell will decrease due to more competition. Nvidia as a company is also valued at around $3 trillion despite the fact that they only have around $96 billion in sales and $53 billion in net income the past twelve months. Those are phenomenal margins, but what do you think is going to happen to the stock if their margins decrease to even 50% (which would still be massive)? Apple and Microsoft are both also valued in the $3 trillion neighborhood and they have much higher sales and net income than Nvidia. Microsoft has $245 billion in sales and $88 billion in net income during that same time period and Apple has $385 billion in sales and $101 billion in net income. Nvidia's valuation compared to those two companies is extremely high and isn't factoring in the risk that their margins (and quite possibly their sales) will eventually decline.
Shocks me the level of denial people are in. I've been programming since I was 7, ai is a obvious bubble. Actual thinking machines like us are so far beyond us that a single human would have a better chance at moving mount Everest with a shovel across the globe. The real scale of this problem is beyond language. Our bodies don't need math or spoken language or our logic to function.
2:33 HOOOOLY, THAT'S A MASSIVE LOSS OF MONEY RIGHT THERE!!!
0:52 That's uuuuuh... That's around 4% of the US' entire GDP. Not a good sign for the country's whole national economy.
Also, amazing coverage. Simple to understand, yet informative. Subscribed!
Great video, though I admit I‘m biased. Can‘t stand the hype anymore
7:28 Too bad a bubble burst on this AI hype wouldn't be quite as damaging if the text below is to be believed. Big Tech deserves worse.
Totally disagree with your premise.
Because you are probably invested up to your eye balls and denial is hard to swallow but I work in economics and can 100% promise you that it will pop like a balloon and you will kiss your retirement money good bye 👋
@@rethinkyourself1 Wow, 1 day old comment! How did you get here?
AI is not in a bubble lol. I would rather believe Bill Gates's statement that it is not like Dot com bubble
That's a conclusion, but you haven't given any real arguments for why it's not a bubble.
And respectfully, I'm going with Goldman Sachs and ignoring Bill Gates on this one. Of course Bill Gates is going to claim it's not a bubble. He owns billions of dollars in Microsoft which is investing heavily in AI and one of the biggest beneficiaries of the AI stock market hype. Bill Gates is "talking his book" because he financially benefits massively from the hype. Keep in mind that Bill Gates also wasn't going around warning anyone about the dot-com bubble when it happened and look how that turned out for investors.
Like I said in the video, AI is here to stay, but that doesn't mean that these company valuations are reasonable or that we aren't in a bubble right now. If investors buy now, they could easily get burned.
If you want to conclude that AI is not a bubble, you have to account for a lot of things like:
1. All of the current money is being made by hardware companies who are selling the components to build AI infrastructure. This is unsustainable though because the companies buying the infrastructure and building the AI software aren't making money. They have huge losses because their product costs are massive and their sales are very low. They can't afford to keep buying AI hardware forever when they aren't making the money to support that kind of investment. The business models don't seem to work.
2. How are AI software companies going to generate decent profit margins when LLMs are virtually indistinguishable from one another? When multiple companies are selling an extremely similar product, they have to compete on price which lowers profits for everyone. Not to mention there's a ton of free and open source AI models out there that you don't even have to pay for. This means AI is at risk of lacking any real pricing power or being able to command decent profits.
3. Even the hardware providers like Nvidia won't be able to sustain this current growth. 100% year over year growth can't last forever and their 75% gross margins certainly can't either. As more competition enters the AI focused hardware market from companies like AMD and supply starts to catch up to the demand, the amount of profit margin Nvidia gets from each chip they sell will decrease due to more competition. Nvidia as a company is also valued at around $3 trillion despite the fact that they only have around $96 billion in sales and $53 billion in net income the past twelve months. Those are phenomenal margins, but what do you think is going to happen to the stock if their margins decrease to even 50% (which would still be massive)? Apple and Microsoft are both also valued in the $3 trillion neighborhood and they have much higher sales and net income than Nvidia. Microsoft has $245 billion in sales and $88 billion in net income during that same time period and Apple has $385 billion in sales and $101 billion in net income. Nvidia's valuation compared to those two companies is extremely high and isn't factoring in the risk that their margins (and quite possibly their sales) will eventually decline.
Shocks me the level of denial people are in. I've been programming since I was 7, ai is a obvious bubble. Actual thinking machines like us are so far beyond us that a single human would have a better chance at moving mount Everest with a shovel across the globe. The real scale of this problem is beyond language. Our bodies don't need math or spoken language or our logic to function.