That's a nice story but without any advancements proper leverage of currently existing AI models can indeed remove many, many jobs from the labor pool, probably double digit percentage-wise.
The idea that these tools won't at all improve from where they are now isn't a widely held position.
Pareto principal. We've seen the 80% but that last 20% is going to be really tough (and expensive). GPT5 illustrates this - it wasn't really better than GPT4o and in some ways worse.
All technologies go through the hype cycle, but the magnitude of the cycle and its effects on the economy are very different.
Neither VR, mobile video calls or 3D printing were expected to radically change the entire work economy, if not bring about actual human-like intelligence. None of those three technologies were in the hands of a handful of ultra-valuable companies, that in turn pretty much all depend on a single American manufacturer of hardware. None were threatening to destroy the Internet as we know it, or the concept of truth and credibility our modern world rely upon.
VR going nowhere was a wet fart, AI going nowhere is gonna, in my opinion and hope, crash the entire tech economy that's been injecting high doses of the hopium in the long period of post-COVID stagnation and inflation.
> Looking back at 2025 we'll be saying "Remember when they said everyone would lose their jobs to AI..."
Even if... one would think that a capitalist economy would do great with more and capable workers. One would think that more stuff would get done. Right?
I think there is a good chance that it will, in fact, shift millions towards unemployment. I am pro technology, yet technology in the hands of profit seekers will only be used to seek profits.
It happened during the agricultural revolution and during the industrial revolution. Millions of people were made unemployed by more efficient technology. Millions had to flee the country sides to then be thrown out of factories a few decades later, leading to slums and mass poverty. So many that the government had to enact more and more welfare programs like public schools, and food programs.
Capitalism is the only economic system that cannot handle more workers. For-profit production is not compatible with mass employment.
Almost like capitalism shoots itself in the foot and then forgets about it.
I dont know if we can draw parallels to something that happened hundred years ago. Since then there has been increases automation yet the unemployment rate esp in the US hasnt budged beyond 4% barring the depression years. I think access to education and opportunities to upskill are crucial for maintaining a sustainable economy. Its helps people just move on esp if they are of working age. With the industrial revolution, technology was hard to get your hands on. You couldnt just buy a cotton mill and start your own business. Not so with AI, for 20 dollars a month you can get access to an employee that mever gets tired. I think if anything, AI might lead to increased competition among businesses and force monopolies to wake from their slumber.
>For-profit production is not compatible with mass employment.
I think reality differs. Most countries have for profit production and most have mass employment. Maybe 95% employed and 5% unemployed but it generally muddles along. The masses always seem to vote for it unless they have communism imposed at gunpoint with walls to prevent them escaping.
I appreciate the author trying to address this. The only issue is the author didn't define what 'pops' in the bubble.
The 'what' that pops, probably, IMHO, is the investment and resources ecosystem dumped, poured, thrown, redirected, etc. to AI.
Just like the .com boom, the costs and money thrown at AI are outsized and will 'pop" as it matures. A 'pop" and leveling down to something perhaps not so outrageous is coming.
As the author states, .com popped but left the Internet still around and expanding. AI is exactly that kind of bubble.
Im not convinced at the comparison to the .com boom of the internet, its intellectually lazy.
The internet was always going to disrupt the way we think about the discovery and purchase of goods and services at the bare minimum. Some saw that the role of the personal computer was evolving from just computation to communication and so on.. this stuff was obvious early on. Irrespective of the equity bubble at that time, the potential was real. It was just too early.
There is nothing of this sort happening with LLMs. Where do they fit? Nobody has a clear answer and I don't see a clear one emerging any time soon. If someone has a very clear and direct answer, please feel free to reply :=)
I think what pops is the Ponzi-like financial structure underlying the huge investments. The projected profits simply don't come fast enough to justify incremental investment, and the pyramid runs out of incoming money. Yes, AI is huge. But the Internet was also huge. And it still couldn't sustain the levels of investment that were being made in 1999 and 2000, even in the big players.
Then you're inventing your own term. Bubble is shorthand for the Economics term "speculative bubble" or "economic bubble" and has described the behavior of many markets over the centuries. What collapses is asset prices, not ideas. It's definitional...just ask your friendly neighborhood economist.
Edit: Here, I went and found the origin for you (via wikipedia). The South Seas bubble spawned the term:
"The metaphor indicated that the prices of the stock were inflated and fragile – expanded based on nothing but air, and vulnerable to a sudden burst, as in fact occurred."
A financial bubble has a clear definition. You're just changing the meaning to be a different strawman so you can refute that. Are there lots of companies that are overvalued because of their AI offerings, and will those companies fail when they don't provide acceptable returns? If yes, bubble.
Okay - that is too extreme of a "bubble" definition for me. False dilemma.
So, then, I guess, nothing is a bubble for you. For me, a more reasonable definition is a large build-up of capital that, at some point, snaps or pops, then sits at a level much lower than the original.
If you take something like that approach of the "bubble" then you can have a more charitable discussion. The AI bubble discussion then is about if the current levels of investment and capital being dumped into AI will stay at the same levels or have a more dramatic dip to be more of the future run-rate, then you can see how people see the parallels of other "bubbles" and actually have more of a discussion I think.
My sense is most view this concept of the "bubble" as the assumption.
That's great that you have your own definitions of a bubble. However, we are generally talking of a financial/economic bubble, which is pretty clearly defined: https://en.wikipedia.org/wiki/Economic_bubble for quite some time.
One just need to ask one question: "is there a big amount of companies in a specific sector that are valued far above their returns". If that answer is yes, that means we are in a speculative bubble. The current insane valuations of unprofitable companies point to the largest speculative bubble ever to exist. I can't wait for it to pop faster already so there are less articles like this.
The bubble is AGI, which was pitched as imminent (it’s even part of the OpenAI-Microsoft agreement language). It will pop when people realize it’s not remotely near.
“AI will change how business is done” is not a bubble because every innovation changes how business is done, it’s just a matter of degree. Various forms of AI have been changing businesses for a decade at least.
I really dislike the title and the article. You are basically stating that AI is not a bubble, but everything around AI is a bubble, which people obviously mean when they say AI is a bubble. Same was the case with dot com crash, where people didn't LITERALLY mean .com domains would crash, but everything around the domains (& Internet) would crash.
Does not help that the author is overinvested into the AI space.
Because something could very easily pop soon, but this article is just laying the groundwork for an argument that "it wasn't AI popping, that was the belief you could run a AI adoption program and fire half your staff popping."
At some point, what's the difference? Obviously LLMs are here to stay in some form or another.
What the stock market does with that is an entirely different animal and honestly I'm not optimistic.
Part of why AI is concerning is that literally nobody can actually predict what the outcome of these models is going to be even a couple of years out, the decision tree just instantly blows out and becomes impossible to track.
Readit News
- Virtual Reality: big hype in the early 90s (arcades, movies like Lawnmower Man) through to use cases today like surgical training, aviation training
- Mobile video calls: hyped in early 2000's with 3G and pre-iPhone devices. Actually took off with 4G and 5G plus iOS and Android phones
- 3D printing: back in 2013 we were expecting "a 3D printer in every home" ... today valuable in industrial prototyping
Looking back at 2025 we'll be saying "Remember when they said everyone would lose their jobs to AI..."
The idea that these tools won't at all improve from where they are now isn't a widely held position.
Neither VR, mobile video calls or 3D printing were expected to radically change the entire work economy, if not bring about actual human-like intelligence. None of those three technologies were in the hands of a handful of ultra-valuable companies, that in turn pretty much all depend on a single American manufacturer of hardware. None were threatening to destroy the Internet as we know it, or the concept of truth and credibility our modern world rely upon.
VR going nowhere was a wet fart, AI going nowhere is gonna, in my opinion and hope, crash the entire tech economy that's been injecting high doses of the hopium in the long period of post-COVID stagnation and inflation.
Even if... one would think that a capitalist economy would do great with more and capable workers. One would think that more stuff would get done. Right?
I think there is a good chance that it will, in fact, shift millions towards unemployment. I am pro technology, yet technology in the hands of profit seekers will only be used to seek profits.
It happened during the agricultural revolution and during the industrial revolution. Millions of people were made unemployed by more efficient technology. Millions had to flee the country sides to then be thrown out of factories a few decades later, leading to slums and mass poverty. So many that the government had to enact more and more welfare programs like public schools, and food programs.
Capitalism is the only economic system that cannot handle more workers. For-profit production is not compatible with mass employment.
Almost like capitalism shoots itself in the foot and then forgets about it.
I think reality differs. Most countries have for profit production and most have mass employment. Maybe 95% employed and 5% unemployed but it generally muddles along. The masses always seem to vote for it unless they have communism imposed at gunpoint with walls to prevent them escaping.
Oh yes, this must be why chatbot companies announced $25 billion of new funding last week.
https://companiesmarketcap.com/juniper-networks/stock-price-...
The 'what' that pops, probably, IMHO, is the investment and resources ecosystem dumped, poured, thrown, redirected, etc. to AI.
Just like the .com boom, the costs and money thrown at AI are outsized and will 'pop" as it matures. A 'pop" and leveling down to something perhaps not so outrageous is coming.
As the author states, .com popped but left the Internet still around and expanding. AI is exactly that kind of bubble.
The internet was always going to disrupt the way we think about the discovery and purchase of goods and services at the bare minimum. Some saw that the role of the personal computer was evolving from just computation to communication and so on.. this stuff was obvious early on. Irrespective of the equity bubble at that time, the potential was real. It was just too early.
There is nothing of this sort happening with LLMs. Where do they fit? Nobody has a clear answer and I don't see a clear one emerging any time soon. If someone has a very clear and direct answer, please feel free to reply :=)
I think what pops is the false belief.
.com -> going online will save you AI -> adding a chatbot will save you
To me, those are what qualify as bubbles. And the other stuff is just overheating, disruption, and other effects.
Then you're inventing your own term. Bubble is shorthand for the Economics term "speculative bubble" or "economic bubble" and has described the behavior of many markets over the centuries. What collapses is asset prices, not ideas. It's definitional...just ask your friendly neighborhood economist.
Edit: Here, I went and found the origin for you (via wikipedia). The South Seas bubble spawned the term:
"The metaphor indicated that the prices of the stock were inflated and fragile – expanded based on nothing but air, and vulnerable to a sudden burst, as in fact occurred."
So, then, I guess, nothing is a bubble for you. For me, a more reasonable definition is a large build-up of capital that, at some point, snaps or pops, then sits at a level much lower than the original.
If you take something like that approach of the "bubble" then you can have a more charitable discussion. The AI bubble discussion then is about if the current levels of investment and capital being dumped into AI will stay at the same levels or have a more dramatic dip to be more of the future run-rate, then you can see how people see the parallels of other "bubbles" and actually have more of a discussion I think.
My sense is most view this concept of the "bubble" as the assumption.
One just need to ask one question: "is there a big amount of companies in a specific sector that are valued far above their returns". If that answer is yes, that means we are in a speculative bubble. The current insane valuations of unprofitable companies point to the largest speculative bubble ever to exist. I can't wait for it to pop faster already so there are less articles like this.
“AI will change how business is done” is not a bubble because every innovation changes how business is done, it’s just a matter of degree. Various forms of AI have been changing businesses for a decade at least.
Because something could very easily pop soon, but this article is just laying the groundwork for an argument that "it wasn't AI popping, that was the belief you could run a AI adoption program and fire half your staff popping."
At some point, what's the difference? Obviously LLMs are here to stay in some form or another.
What the stock market does with that is an entirely different animal and honestly I'm not optimistic.
Anybody telling you otherwise is lying to you.