#ai bubble
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ecrivainsolitaire · 20 days ago
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A summary of the Chinese AI situation, for the uninitiated.
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These are scores on different tests that are designed to see how accurate a Large Language Model is in different areas of knowledge. As you know, OpenAI is partners with Microsoft, so these are the scores for ChatGPT and Copilot. DeepSeek is the Chinese model that got released a week ago. The rest are open source models, which means everyone is free to use them as they please, including the average Tumblr user. You can run them from the servers of the companies that made them for a subscription, or you can download them to install locally on your own computer. However, the computer requirements so far are so high that only a few people currently have the machines at home required to run it.
Yes, this is why AI uses so much electricity. As with any technology, the early models are highly inefficient. Think how a Ford T needed a long chimney to get rid of a ton of black smoke, which was unused petrol. Over the next hundred years combustion engines have become much more efficient, but they still waste a lot of energy, which is why we need to move towards renewable electricity and sustainable battery technology. But that's a topic for another day.
As you can see from the scores, are around the same accuracy. These tests are in constant evolution as well: as soon as they start becoming obsolete, new ones are released to adjust for a more complicated benchmark. The new models are trained using different machine learning techniques, and in theory, the goal is to make them faster and more efficient so they can operate with less power, much like modern cars use way less energy and produce far less pollution than the Ford T.
However, computing power requirements kept scaling up, so you're either tied to the subscription or forced to pay for a latest gen PC, which is why NVIDIA, AMD, Intel and all the other chip companies were investing hard on much more powerful GPUs and NPUs. For now all we need to know about those is that they're expensive, use a lot of electricity, and are required to operate the bots at superhuman speed (literally, all those clickbait posts about how AI was secretly 150 Indian men in a trenchcoat were nonsense).
Because the chip companies have been working hard on making big, bulky, powerful chips with massive fans that are up to the task, their stock value was skyrocketing, and because of that, everyone started to use AI as a marketing trend. See, marketing people are not smart, and they don't understand computers. Furthermore, marketing people think you're stupid, and because of their biased frame of reference, they think you're two snores short of brain-dead. The entire point of their existence is to turn tall tales into capital. So they don't know or care about what AI is or what it's useful for. They just saw Number Go Up for the AI companies and decided "AI is a magic cow we can milk forever". Sometimes it's not even AI, they just use old software and rebrand it, much like convection ovens became air fryers.
Well, now we're up to date. So what did DepSeek release that did a 9/11 on NVIDIA stock prices and popped the AI bubble?
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Oh, I would not want to be an OpenAI investor right now either. A token is basically one Unicode character (it's more complicated than that but you can google that on your own time). That cost means you could input the entire works of Stephen King for under a dollar. Yes, including electricity costs. DeepSeek has jumped from a Ford T to a Subaru in terms of pollution and water use.
The issue here is not only input cost, though; all that data needs to be available live, in the RAM; this is why you need powerful, expensive chips in order to-
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Holy shit.
I'm not going to detail all the numbers but I'm going to focus on the chip required: an RTX 3090. This is a gaming GPU that came out as the top of the line, the stuff South Korean LoL players buy…
Or they did, in September 2020. We're currently two generations ahead, on the RTX 5090.
What this is telling all those people who just sold their high-end gaming rig to be able to afford a machine that can run the latest ChatGPT locally, is that the person who bought it from them can run something basically just as powerful on their old one.
Which means that all those GPUs and NPUs that are being made, and all those deals Microsoft signed to have control of the AI market, have just lost a lot of their pulling power.
Well, I mean, the ChatGPT subscription is 20 bucks a month, surely the Chinese are charging a fortune for-
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Oh. So it's free for everyone and you can use it or modify it however you want, no subscription, no unpayable electric bill, no handing Microsoft all of your private data, you can just run it on a relatively inexpensive PC. You could probably even run it on a phone in a couple years.
Oh, if only China had massive phone manufacturers that have a foot in the market everywhere except the US because the president had a tantrum eight years ago.
So… yeah, China just destabilised the global economy with a torrent file.
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dispatchesfromtheclasswar · 6 months ago
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Womp womp.
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ayeforscotland · 6 months ago
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Quite a long article but worth reading for anyone interested in the AI Tech Bubble showing signs of slowing down.
Generative AI hasn't proved to investors that it can actually deliver any of the productivity gains it promised.
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agapi-kalyptei · 9 months ago
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I said it 10 years ago, I'll say it again: IT people are the priest class of our era. Faith in gods is receding, money and power and fame is the main religion, people don't believe in greater purpose or hard work, and so from the ashes of a structured society rises the idiot child dressed as phoenix, glorified markov chains called "AI". People with no belief system of their own turn to AI to bring about the golden age, and the billionaires paying for it are laughing. Drink, drink, drink our kool-aid, we added something sweet to it. Don't send it to the lab for analysis, who has time to stop and think anymore. Just follow the trend. Live on Mars. Buy a nuclear shelter. Buy crypto. We will save you. We will save you. We will save you. Put your faith in us. We understand computers, don't ask how NFT works buddy. We will save you.
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airandangels · 7 months ago
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A week and a half ago, Goldman Sachs put out a 31-page-report (titled "Gen AI: Too Much Spend, Too Little Benefit?”) that includes some of the most damning literature on generative AI I've ever seen. And yes, that sound you hear is the slow deflation of the bubble I've been warning you about since March.  The report covers AI's productivity benefits (which Goldman remarks are likely limited), AI's returns (which are likely to be significantly more limited than anticipated), and AI's power demands (which are likely so significant that utility companies will have to spend nearly 40% more in the next three years to keep up with the demand from hyperscalers like Google and Microsoft). ... I feel a little crazy every time I write one of these pieces, because it's patently ridiculous. Generative AI is unprofitable, unsustainable, and fundamentally limited in what it can do thanks to the fact that it's probabilistically generating an answer. It's been eighteen months since this bubble inflated, and since then very little has actually happened involving technology doing new stuff, just an iterative exploration of the very clear limits of what an AI model that generates answers can produce, with the answer being "something that is, at times, sort of good." It's obvious. It's well-documented. Generative AI costs far too much, isn't getting cheaper, uses too much power, and doesn't do enough to justify its existence. There are no killer apps, and no killer apps on the horizon. And there are no answers. 
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alpaca-clouds · 12 days ago
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How we ended in the darkest timeline
I actually wanted to talk a bit more about the French Revolution, but given recent events, I fear like I need to talk about this for now. Mainly because over the weekend I had so many talks about this, and have reached the point where I just need this blog to link back to.
You know how people keep joking about how we ended up in the darkest timeline, right? Well, what can I say? It is probably right. And by now I can tell you pretty definitely why.
Now mind you, like with everything there is a multitude of reasons for this. Technically we can go and say: Yes, we are here because colonialization happened - and it would not be wrong. We can also say that it is because of Napoleon, and because the failure of the French Revolution - and that would not be entirely wrong either. And we absolutely have to also say, that a bit reason is that instead of fighting fascism everyone decided after WWII, that fighting communism would be so much more important.
But I think a lot of the stuff we deal with right now is very much linked to one specific thing: The 2008 financial crisis - and the lack of regulation that lead up to it.
This is the moment where I am gonna tell you to watch The Big Short. I know most of you have probably not done that before. Because the movie feels like Oscar bait and also, who wants to watch a 2 hour movie about the financial market, but trust me on this: The movie is actually made really well and explains what happened back then very, very well and in a way that at least hits my autistic humor very well.
But basically, you need to understand two things: For the longest time the financial market really only traded companies and investments into them. But at some point during the late 70s and early 80s someone realized that there is something they were not trading on: depts. Because obviously most credits are given out by the banks and the financial industry. Not really investments, because there is a promise this stuff gets paid back eventually. And so they started trading depts with each other.
If you do not see the problem with this, let me explain: If you buy the dept someone has with another company, you basically are just making a bet with them the long way around. If you buy a dept, you bet that the person will pay the debt back - if you sell it, you kinda are betting against it.
There is a lot of weird financial tooks for this kinda stuff, but this is what it comes down to. The financial market became more and more a big ass casino, only that other than any other gambling it was not treated as this - and the money they were using on gambling was actually money that did not belong to them.
Because here is the thing: The main players in the financial market are either banks or groups that invest for their customers. While in the second case the people at least are fully aware of the fact that the financial institution will trade with their money, a lot of bank customers are not really aware of this. Sure, they kinda know that when they keep their money at the bank they might get interest, but most of them do not understand why. Because really, it does never get fully explained to them, that the bank will use that money to trade and invest with it.
And this is kinda part of the issue.
See, what happened in 2008 was, that the banks traded with indexes (so basically bundles) of thousands and thousands of house mortgages. And in those bundles were so called sublime mortgages, which is financial speak for "dog shit mortgages we knew the people taking them out would be unable to pay, but we didn't give a fuck". And a lot of those mortgages were due in 2008, which is why those indexes failed in 2008, resetting their value to close to 0. But the banks had spend money on those indexes as if they had an actual value. Especially because it was always the common wisdom, that mortgages were one of the most secure financial tools.
So. Now, what happens when you spend money on something that you think is an investment, but turns out to be completely worthless? Eh?
Yeah, exactly, you just threw a lot of money into the wind. And that money now was GONE. The big financial companies were just out of money. The money had simply disappeared, which is always what happens when a financial bubble burst.
See, financial bubbles happen when people overestimate how much something is going to be worth. They expect something to raise in value, so that when it ultimately fails a lot of people have put money into it which will just be GONE.
Gone, baby, gone.
But again: The money the banks had been using was mostly not their money. It was the money of their customers. Some of whom understood that risk. Many of them did not. So basically, if you had any of your money on the bank, this money technically still belonged to you - but it was not there. And of course there were also literally hundred-thousands of people working for those companies, who were now out of money.
And this is where we come to the reason why we are living in the darkest timeline.
I know it sounds cynical coming from a lefty like me, but sadly... Yeah, Obama was a big, big reason of why it came to this. While this happened towards the end of the Bush administration, for the most part it was Obama dealing with the fall-out.
See, the government at the time had three options:
Do nothing. Accept that the money is gone and deal with the consequences. Build something new from the ashes.
Give out some securities for the private people who lost their money. Basically some form of check to get back up to amount X of money that you lost becuase of the banks, but prosecute the people in finance, who had messed it up. Also create laws to control the financial market and trade volume, as well as the size of banks.
Save the banks by basically paying their depts for them.
The administration decided to choose Option 3. They saved the banks to save the people's finances and all those jobs bound to the banking industry.
There were no laws. No controls. No checks and balances. And there was basically no prosecution of the people who had let this happen - partly because they did not care, and partly because they were dumb fuckers.
And pretty much everything that has happened since is in some way connected to that. Literally everything!
I mean, if you want to know what I mean with that? The MCU exists because of the 2008 banking crisis! Yeah, the fucking Marvel Cinematic Universe. The reason that streaming is fucked and your favorite shows get cancelled after one or two seasons is heavily connected to the 2008 financial crisis.
The 2008 financial crisis is also connected to the surge in right wing politics all around the world. Because the financial crisis did not only hit the USA, but the rest of the world as well. A lot of people lost their jobs because of it, and because the financial industry did not get controlled and from this learned that they could fuck up however much they liked ("too big to fail") the gap between the rich and poor got worse. Which then the right wingers used to make people angry against minorities.
And of course because all of this started with unrealistic sets for mortages, mortages were suddenly much harder to get and it ended up pretty much impossible to afford a home - just as most of millenials were leaving school.
After all: Nobody really understood, what happened during the financial crisis. Because most people stop following any explanation as soon as they hear stuff like "shorts" and "sublime mortages". So it was much easier to think that the reason that you lost your job and could no longer afford a home was because some immigrant took it, rather than that some white collar idiots at wallstreet made some trades that you could not even begin to understand.
But yeah, tl;dr: Obama decided to save the banks, put in no controls, and with this fucked pretty much both Millennials and everyone who came after us over. And everyone else - every other world leader - pretty much just went with it and did the same in their own country. Danke, Merkel, as we Germans would say.
This is also what started the Occupy Wallstreet Movement, which was trying to get SOME accountability, but in the end pretty much failed.
If I asked you to guess how many people got prosecuted because of the shit back then, I can guarantee you, that you would not guess right. Because literally everyone I have asked, said some number between 20 and 100, realizing very well that it was probably not the thousands actually at fault, but not being able to grasp the reality. One. There was one person actually prosecuted because of it.
These people destroyed our futures, they fucked us over, and they got away with it.
And you and I, we deserve to be angry about it.
Especially because it is happening again right now. There is not just one other bubble, but a couple of bubbles right now. And chances are that they will pop very soon. Fuck, I am writing this on Monday early afternoon German time. Chances are that by the time this goes online some might have started popping, because of the Trump administration's inability to deal with shit. And let's face it, the Trump administration is not gonna be capable of dealing with this, when it goes into freefall.
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bryanharryrombough · 7 months ago
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That kind of growing mistrust is symptomatic of a much larger trend. Earlier this year, technology research and consulting firm Gartner found that the hype surrounding generative AI had passed the "peak of inflated expectations," which is marked by "overenthusiasm and unrealistic projections." Companies are feverishly trying to stuff what they claim to be AI into every product, from dating apps to automated car salesmen — despite glaring shortcomings that have yet to be solved and mounting, astronomical costs. And consumers are getting tired of their desperate attempts to capitalize on all the hype.
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By palettequeen_ai
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vilevexedvixen · 6 months ago
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Economics is a social science.
The worst social science.
Mathmatically justified palm reading.
"I see wealth and prosperity in your future" - an economist
*Economy crashes*
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el-ffej · 19 days ago
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Regarding the DeepSeek AI Hysteria:
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To people who see the performance of DeepSeek and think: "'China is surpassing the US in AI." You are reading this wrong. The correct reading is: "Open source models are surpassing proprietary ones." DeepSeek has profited from open research and open source (e.g. PyTorch and Llama from Meta). They came up with new ideas and built them on top of other people's work. Because their work is published and open source, everyone can profit from it. That is the power of open research and open source.
Also recommended reading:
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screampotato · 9 months ago
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Google is making a massive and complete hairy-cheeked arse of itself right now, and I'm savagely enjoying it.
You thought your reputation was unsinkable? Well here comes the internet iceberg to puncture your hubris. I hear you're so embarrassed by the completely foreseeable hallucinations of your half-baked LLM search assistant that you're trying to manually remove ridiculous results? That would be a Sisyphean task even if those silly results remained the same small proportion of the whole. But they won't.
Because now people are motivated to go out and mine for more nonsense results and share them, and your failbot will gladly oblige, generating endless fountains of garbage for the lolz. It's turned into a game, like Googlewhacking, but unlike Googlewhacking, this meme-mining is going to undermine your whole operation and sink your good name. You already look like fools, but it's going to get a whole lot worse. Your statements are inadequate, your contingencies are laughably insufficient. You're rearranging deckchairs.
The best case is that you realise your mistake, like Meta did with Galactica, and get in the lifeboats. Let your AI failbot sink before it does any more damage. But you must have been so deep into corporate groupthink to ever do this in the first place, to fail to learn from Meta's mistake, that you may just stay aboard and keep moving those deckchairs, in a hopelessly miscalculated attempt to save face.
If that's what you do, hell mend you, and by hell, I mean the unmerciful icy depths of the internet.
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because--palestine · 18 days ago
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Chinese AI company DeepSeek shocked the West with a groundbreaking open-source artificial intelligence model that beats huge Silicon Valley Big Tech monopolies. The US government is already trying to ban it, like TikTok, using "national security" as an excuse.
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thecuriousbrain · 20 days ago
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Big Tech in panic mode… Did DeepSeek R1 just pop the AI bubble?
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alanshemper · 10 months ago
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19 April 2024
AI chipmaker Nvidia (NVDA) saw its shares dive on Friday after key hardware partner Super Micro Computer (SMCI) announced its next earnings date without giving preliminary results. Nvidia stock fell in tandem along with other highflying AI stocks.
On the stock market today, Nvidia stock sank 10% to close at 762.
The drop came after data-center hardware specialist Super Micro revealed that it will release its fiscal third-quarter results on April 30. But unlike recent quarters, it didn't update its sales and earnings guidance.
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agapi-kalyptei · 7 months ago
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like to charge, reblog to cast
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willcodehtmlforfood · 2 years ago
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Cervest: AI firm hailed by Government collapses weeks later with staff unpaid | Evening Standard
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