"We've realized for some time that not only are language model technologies going to dominate our future"
Close, but not quite. What we realize right now is that AI has pumped, pumped, pumped a whole lot of stock valuations sky high, and the first faint glimmers of the market asking that some actual money be delivered in proportion to the sky high valuations are starting to appear. (Note carefully the "in proportion to"; it is not enough to make a bit of cash. These valuations are enormous.) The stocks so pumped need results more-or-less right now, since propagating anything they have right now out into the market to actually gather revenue is going to take some time.
I expect a couple of other Hail Mary plays like this to show up too.
And again, let me underline, emphasize, and highlight, this isn't about whether AI can make "any" money. It's about whether it can justify those staggeringly high stock valuations in, say, the next year or so. This is a fairly uphill battle. Even if you are a True Believer than AI will be an economic revolution in literally the next 12 months or so, it's hard not to look at the market and come to the conclusion that right now every AI player is being valuated as the inevitable victor and the inevitable beneficiary of 100% (or more) of the AI gain, e.g., nVidia is being valuated as if there will never, ever be any competition for AI hardware despite all the incentives, each AI user valuated as if they are the inevitable winner in their respective domains, etc. They can't all win simultaneously like that, it's just impossible.
(On the plus side, it's really just stock valuations. I don't expect an AI winter this time, the tools are much more valuable than they were last time. I mean, I would still very firmly say that what we have right now is grotesquely over hyped, but there's still quite a bit of "there" there. The previous AI hype cycles didn't have anywhere near as much "there" there.)
NVIDIA has fundamental hardware and software advantages that will take years and years to catch up on. The general purpose part of GPGPU is no joke, just ask the people trying to build competing hardware and an alternative to the CUDA stack. But...
NVIDIA is massively investing in AI companies with the expectation (explicit or otherwise) that they use the money on NVIDIA hardware. And they are pouring in ridiculous amounts of money. I think this is severely impacting the ecosystem, creating overvalued and overfunded AI startups that lack viable businesses and driving essentially fake revenue to NVIDIA that is unsustainable. The money is basically free for NVIDIA to spend, maybe even net positive between revenue numbers and progress towards monopolizing the AI stack. Time will tell if the bubble will pop or if one of the plays will hit and turn a fake flywheel into a real one, but I definitely agree that the stock valuations are too high.
It's not that clear Apple/local-AI is necessarily going to directly compete that much with large models running in datacentres (outside of some relatively limited use cases) and there don't seem to be many signs that Nvidia has any serious plans about entering the consumer market and compromise their insane margins.
Spot on. The current wave of GenAI has created a bunch of new markets, but those markets are, at least currently, the unsavory types: LLM-based virtual girlfriends, AI hentai games running off stable diffusion, SEO and social media spam with ChatGPT, etc.
The best we've got in the "regular" enterprise world is excellent parsing of unstructured documents. Which is, to be sure, hugely valuable and will make a big difference in a lot of industries. But isn't nearly enough to justify the insane evaluations and investment companies are making into AI right now.
Two years into the AI boom, and it's starting to look closer to blockchain and the metaverse than the iPhone.
The costs are also largely being ignored at the moment. Both the obvious marginal costs (electricity, hardware for compute, dev time) and the hidden costs (flood of spam and misinformation).
I was really surprised to read the other day that Dell isn't making money on AI servers. I played around with the server build tool on their website and was surprised to see that a H100 adds ~$50K to a server! How the heck are these companies spending $100K per server going to get back their ROI? Are all these costs going to get written off as R&D? This really seems like the dot-com days but worse somehow.
Close, but not quite. What we realize right now is that AI has pumped, pumped, pumped a whole lot of stock valuations sky high, and the first faint glimmers of the market asking that some actual money be delivered in proportion to the sky high valuations are starting to appear. (Note carefully the "in proportion to"; it is not enough to make a bit of cash. These valuations are enormous.) The stocks so pumped need results more-or-less right now, since propagating anything they have right now out into the market to actually gather revenue is going to take some time.
I expect a couple of other Hail Mary plays like this to show up too.
And again, let me underline, emphasize, and highlight, this isn't about whether AI can make "any" money. It's about whether it can justify those staggeringly high stock valuations in, say, the next year or so. This is a fairly uphill battle. Even if you are a True Believer than AI will be an economic revolution in literally the next 12 months or so, it's hard not to look at the market and come to the conclusion that right now every AI player is being valuated as the inevitable victor and the inevitable beneficiary of 100% (or more) of the AI gain, e.g., nVidia is being valuated as if there will never, ever be any competition for AI hardware despite all the incentives, each AI user valuated as if they are the inevitable winner in their respective domains, etc. They can't all win simultaneously like that, it's just impossible.
(On the plus side, it's really just stock valuations. I don't expect an AI winter this time, the tools are much more valuable than they were last time. I mean, I would still very firmly say that what we have right now is grotesquely over hyped, but there's still quite a bit of "there" there. The previous AI hype cycles didn't have anywhere near as much "there" there.)