“If there is a deflation of the AI bubble, the optimists say that the new infrastructure will remain even if the companies do not — just as railways survived the 19th-century railway bust. However, this fails to reckon with the reality of depreciation (few pieces of silicon hold their value for very long because better chips inevitably come along) and the possibility that LLMs could be displaced by more efficient models less dependent on massive numbers of expensive AI chips.
In placing massive hyperscaling bets, investors are setting lavish expectations about future earnings. But LLMs are not likely to replicate the near monopolies that have made the market power of current tech giants hard to assail. A better analogy for them might be airlines, which are hobbled by small margins, intense competition, high expenses and dependence on hardware created by outside vendors.”
– @garymarcus in @FinancialTimes
