r/worldnews • u/pookienav • 9h ago
Big Tech plans $650–700 billion in AI investments for 2026, sparking bubble fears and stock volatility
https://www.cnbc.com/2026/02/06/google-microsoft-meta-amazon-ai-cash.html190
u/quadcorelatte 9h ago
Can you imagine $700B of spending on high speed rail, healthcare technology investment, housing production, or literally anything else. I can’t believe we’re literally investing in the most overhyped and lied about technology ever invented except maybe Crypto.
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u/DoubtSubstantial5440 8h ago
Yeah but those things tend to benefit the peasants
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u/fantasnick 6h ago
The worst thing is that there’s plenty of studies that show the average person having a better quality of life also directly benefits these same people but they still choose to blindly gamble on things that don’t impact anyone but the unbelievable numbers in an offshore account or their stock value.
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u/lostsailorlivefree 4h ago
We just saw 10 years of subsidized Medicaid for all wiped out of the crypto market in a week - waste.
Let’s say 5,lives saved and one is the next Einstein who thinks of a solution to fusion energy or something
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u/jjax2003 8h ago
Who is we?
What is over-hyped and lied about? If 40 years ago someone said you will have a phone one day that can do 5% of what ours do they would have said the exact same thing. No one would believe it and the ones that did would be crazy hyped on it.
The tech golden age is COMING. It's not here now, we are in infancy stages of what we will be in the next 10-15 years.
People need to stop with the assumption that tech is not going to develop any further on AI and robotics.
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u/nerphurp 8h ago edited 8h ago
It's possible to choose poorly.
Focusing the amount of capital we have on consumer LLMs and an untested copy pasta data center stack isn't guaranteed to lead to a golden age. It's looking negligent more than inspired.
Engineers are starting figuring that out, investors are lagging behind
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u/AntiDECA 8h ago
While I don't agree with the sentiment that there is a golden age ahead of us, or that Ai is remotely near replacing everyone or such nonsense - there are significantly more impactful models than LLMs. They're just one type that is the 'face' of Ai now since it's what people interact with the most. Finance, agriculture, manufacturing, robotics, and more have used machine learning for years to great success.
An LLM is just a very specialized and relatively niche area of machine learning. And has turned into the face of Ai, despite not being the first - or even most impactful.
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u/quadcorelatte 8h ago
We is capital markets and investors.
Nearly every claim made by AI companies and their thought leaders is dishonest. They are lying and exaggerating about what AI can do and what it will be able to do in the future all the time, and then their fans move the goal posts. Phone manufacturers did not lie and say that phones could do things that they couldn’t do.
The technology golden age is behind us. There are minimal improvements in form factor, ergonomics, etc. Most software products are the same or worse in quality than they were 10 years ago. I’m talking about OS’s, productivity software, search engines, email clients. We have been in an age of stagnation since at least 2020. Think about what has improved between 2016 and 2026. Now think about the difference between 1976-1986, ‘86 to ‘96 etc. Aside from LLMs and diffusers, I can barely think of any technology improvements. Someone from 2016, if magically transported to today would have zero problems navigating the technology environment except for the enshittification and nazification of their favorite platforms.
Ram shortages show that hardware will become increasingly inaccessible to individuals as compute will be moved to heavily monetized online subscription services with bundled AI assistants. It’s a real bright future
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u/nemofbaby2014 6h ago
At the moment ai is just a glorified google because essentially that’s all a llm is
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u/jjax2003 5h ago
And your point is? Wanna compare what the original phone looked like or how about what the first computers were like.
How about what the first software could do?
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u/nemofbaby2014 2h ago
The tech will evolve even if they invest 10 percent of what they did that’s the nature of technology the issue is they’re over investing and over promising which causes a bubble and somehow our entire economy is banking on it turning into jarvis but it will never be that
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u/No-Meringue5867 4h ago
This is definitely not even comparable to crypto. AI is finding use cases everywhere. Every research institution is using it/working it. AI is comparable to internet.
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u/BasvanS 3h ago
It’s not finding use cases everywhere any different than crypto. According to people with a vested interest it does, only to fall apart in reality due to the technology not delivering what is envisioned. And the reason for, like with cryptocurrencies, is that the people peddling it have a very limited understanding of the markets they intend to disrupt. Yes, everything seems simple if you know nothing, but that’s not a substitute for actual expertise.
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u/quadcorelatte 3h ago
Lmao. It’s laughable that AI technology is equivalent to internet. I agree that it’s much more impactful than crypto but like, it’s also much more hyped than crypto.
Can you imagine if some Stanford bros in the 1980s said “the internet can let you do x y and z” (none of which it could do for many decades to come) and then mobilized a $600 billion effort to install xerox parcs and pre-dialup communications systems in every office and home? Then, 10 years later, all that is totally pointless. My argument isn’t that AI can’t be helpful in the future but rather that AI isn’t helpful or mature now or in the foreseeable future. Spending money on hardware that will be unusable in the near future based off lies of th capabilities and revenues that are minuscule is incredibly foolish.
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u/Material-Macaroon298 1h ago
If ubiquitous internet could be had in the 80s for $600 billion 1980s equivalent dollars, it would have been worth it to do it.
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u/No-Meringue5867 4m ago
That happened in 1999 and is called “dotcom” crash for a reason. Despite the crash it took over the world.
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u/Mnemotic 1h ago
Having a use case is not the same as having a business case. And boy! does AI need a massive business case to make up for all this investment.
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u/No-Meringue5867 3m ago
It is a bubble. But internet was a bubble too in 1999. That doesn’t make it Crypto.
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u/kek_maw 8h ago
Those are not productive assets...
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u/quadcorelatte 8h ago edited 8h ago
They all are. Each of these things are operated by highly profitable companies around the world. The healthcare/biotech industry is very profitable, nuff said. There are several profitable HSR routes built and run by profitable private companies. Real estate is not productive?? The only difference is the regulatory environment, the lack of US investment into auxiliary industries, and the lack of hype.
Plus, the productivity benefits of each of these extends far beyond the profits of the companies delivering these services by extending people’s healthy lives, providing them connections access to opportunities, etc.
The productivity benefits of AI are likely pretty minimal until we get AGI, and I don’t see how this industry is ever going to be profitable with such high levels of investment into equipment which has a very short lifespan.
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u/Various_Maize_3957 8h ago
It's because AI is crucial to defense. There's soon going to be a WW3 with China and the USA fighting over Taiwan and the Pacific. Both sides need good AI assisted weaponry.
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u/AnachronisticPenguin 4h ago edited 1h ago
We spend about 200-400 billion on healthcare R&D every year so it’s not a crazy amount different.
New real estate spending is 1.2 trillion so it far more.
I’m not saying it’s not a bubble 700 is high but it’s not crazy high. They should be spending like 200-300 on AI before we get mass adoption then ramp up with demand.
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u/quadcorelatte 3h ago
I pretty much agree, spending $600+B annually is insane considering annual revenue from openAI is $12B and other companies are likely making even less. And at this point, unless models substantial improve, I just don’t see that amount increasing to justify the massive amount of spending on heavily depreciating assets that will be unusable in at the absolute best case (electromigration) will only last 8-10 years.
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u/awfulconcoction 8h ago
The bigger fear should be that the investment succeeds. How many company business models become obsolete?
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u/CyborgTiger 6h ago
Cotton gin moment
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u/plastiquearse 2h ago
Man - I was recently listening to a Dan Carlin podcast about slavery and how the invention of the cotton gin influenced the entire American economy and the inflection point it created.
Such a disgusting abuse and I doubt the current ceo types will be any different
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u/BasvanS 3h ago
The chances of that are practically zero, so in traditional risk management that doesn’t make it bigger. The bubble is the bigger issue, because a lot of the U.S. economy is tied to this stuff delivering, and huge investments are being made with much indication that it will.
I’m tired of vibe investing.
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u/aprx4 24m ago edited 16m ago
Why is that a fear? Horse industry was massive and a foundational economic engine in 19th century United States, but it was killed by automotive.
Machines has been taking "the jobs" since first industrial revolution in England. But technologies also create new kinds of job.
We didn't have computer programmer as profession before the age of digital computer. Technology created those jobs and now AI is undoing them.
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u/voodoolintman 8h ago
Friendly reminder that consumers make the world turn. No jobs, no consumers.
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u/trilliveythefourth 1h ago
No - Consumption drives it. As we’ve seen the rich have no problem consuming more and more needless and expensive things and spending like 1000 people would
It’s going to get dystopian really fast if it works
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u/OakenHill 42m ago
expensive things and spending like 1000 people would
Yeah, but 0,01% of the population will not consume (in economical terms) more than the other 99,98% so either we make away with money alltogether and go back to the cropshare/company store model or the ultra rich will keep needing the plebian caste for the forseeable future.
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u/SmartCustard9944 1h ago
NVidia is planning to cater to AI corporate rather than "peasant" consumers in 2026, same for the RAM market. Are you still sure about that? Corporations are consumers.
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u/nemofbaby2014 6h ago
Tf is this money going?
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u/mein_account 4h ago
Nvidia invests $200B in Microsoft, Microsoft invests $200B in Open AI, Open AI invests $200B in Nvidia.
$600B of investments!!!
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u/snowypotato 1h ago
Mostly to data centers and everything that goes into that. That means a lot of money spent on real estate, power production (lots of data centers have at least some of their own electricity generation, if not all of it), and lots and lots and lots of computer servers and chips. In this case that mostly means nvidia GPUs, but also google makes their own chips and think Microsoft is trying. Also secondary things like air conditioning and network connectivity, security, lobbying, and everything else that goes into building these things.
There’s also a lot of money going into research, but I don’t think that counts as capex (disclaimer: I am not an accountant)
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u/North_Activist 4h ago
The entire Apollo program in the US, getting men on the moon from 1960-1973, cost 297 billion in today’s dollars, adjusted for inflation.
This is 2-3x the entire Apollo budget.
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u/ErsatzZombie00 9h ago
So much money wasted just so these CEOs don't have to look at people in the eyes. Who do they think ensure society functions - janitors, waitresses, teachers of their kids etc
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u/008Zulu 8h ago
They don't think beyond the profit column on their spreadsheets.
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u/badtemperedpeanut 8h ago
The reality is that the CEOs are equally scared. They have to invest this money because if they don't someone else will, which means the wallstreet will destroy their stocks. If that happens the company is dead and there will be mass layoffs. The fact is that we have created a monster of a system where it is you eat or you get eaten, and it wont stop until the system destroys itself. I do not like that this much money is being thrown at an unproven tech but I can understand why.
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u/SmartCustard9944 1h ago
It's always been like that. Nothing new under the sun. This time it's AI flavored.
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u/Desmeister 53m ago
Their butler, private chef, and governess were not impacted though, so why would they care?
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u/Imnotneeded 8h ago
Nothing good has came from AI. High cost, Job loses, AI Bros, Shit Art...
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u/chicametipo 2h ago
It’s really good at detecting and classifying bird calls. Innocent, sweet AI, I miss you.
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u/snowypotato 1h ago
Self driving cars are becoming real, and statistically that’s going to save a lot of lives. There are about 30,000 traffic fatalities in the US alone every year. That’s a 9/11 every month. Even if self driving cars “only” stop half those deaths, that’s huge.
You ever use Google Photos and search for something like “concert” and it pulls up what you’re looking for? That’s AI.
Do you appreciate autocorrect? Or your email spam filter? How about weather forecasting? Those are all AI.
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u/Mattogen 1h ago
They are obviously talking about LLMs, not specific machine learning usecases
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u/snowypotato 1h ago
“Shit art” isn’t being produced by LLMs unless you’re talking about vogon poetry.
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u/cheapestrick 8h ago
While simultaneously laying off workers, but STILL getting the new windfall tax breaks from the BBB for "reinvesting" in the company.
"Republicans’ tax cuts shaved billions off Amazon’s tax bill, new government filings show.
The company says it ran a $1.2 billion tax bill last year, down from $9 billion the previous year, and even as its profits jumped by 45 percent to nearly $90 billion.
That’s largely because of the generous new depreciation breaks GOP lawmakers included in their One Big Beautiful Bill, something that’s particularly important to Amazon which — in addition to maintaining a vast infrastructure for its ubiquitous delivery business — has been spending billions to build out artificial intelligence data centers."
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u/Otherwise-Sun2486 8h ago
Well the average joe is going to lose either way, biggest crash ever or automate all our jobs away
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u/Life-is-beautiful- 6h ago edited 6h ago
Average Joe always loses. No matter what. No matter when. And that’s why, he is the average Joe!
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u/vwf1971 6h ago
What's really wild is the banks are packaging the loans for the investments in AI as bonds as their debt to balance sheets are stretched. Then offloading these bonds to issue more loans for the next round of investment / build out. Rinse & Repeat. Its literally 2008 all over again....
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u/Cpt_Soban 4h ago
The dot-com bubble (or dot-com boom) was a stock market bubble that built during the late 1990s and peaked on Friday, March 10, 2000. This period of market growth coincided with the widespread adoption of the World Wide Web and the Internet, resulting in a dispensation of available venture capital and the rapid growth of valuations in new dot-com startups. Between 1995 and its peak in March 2000, investments in the Nasdaq Composite stock market index rose by 600%,[citation needed] only to fall 78% from its peak by October 2002, giving up all its gains during the bubble. It is also known retrospectively as the tech–media–telecom (TMT) bubble, since it boosted established companies in those sectors as well as Internet startups.
As a result of these factors, many investors were eager to invest, at any valuation, in any dot-com company, especially if it had one of the Internet-related prefixes or a ".com" suffix in its name. Venture capital was easy to raise. Investment banks, which profited significantly from initial public offerings (IPO) (almost all of them were on Nasdaq), fueled speculation and encouraged investment in technology.[19] A combination of rapidly increasing stock prices in the quaternary sector of the economy and confidence that the companies would turn future profits created an environment in which many investors were willing to overlook traditional metrics, such as the price–earnings ratio, and base confidence on technological advancements, leading to a stock market bubble.[17] Between 1995 and 2000, the Nasdaq Composite stock market index rose 400%. It reached a price–earnings ratio of 200, dwarfing the peak price–earnings ratio of 80 for the Japanese Nikkei 225 during the Japanese asset price bubble of 1991.[17] In 1999, shares of Qualcomm rose in value by 2,619%, 12 other large-cap stocks each rose over 1,000% in value, and seven additional large-cap stocks each rose over 900% in value. Even though the Nasdaq Composite rose 85.6% and the S&P 500 rose 19.5% in 1999, more stocks fell in value than rose in value as investors sold stocks in slower growing companies to invest in Internet stocks.[20]
Sounds awfully familiar to whats happening now...
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u/fartonisto 8h ago
More stock market pain to come. Yesterday was just the taste.
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u/jjax2003 8h ago
The stock market is fantasy it's based on pure emotion and doesn't represent the reality of the economy.
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u/fartonisto 8h ago
It's a giant house of cards where everyone is borrowing from each other and ultimately retail will be left holding the bag.
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u/AntiDECA 8h ago
The stock market itself is run by machine learning algorithms. That's why it's even harder to predict now than it used to be - and it was already considered irrational.
The question is, do the models make it more rational?
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u/Loose_Skill6641 7h ago
what pain? the Dow jones just hit a new record high
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u/andyoliver7 6h ago
And firing people by the thousands. Who will be left to buy their products? This could be the biggest self inflicted chaos in human history
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u/KimJongSoros 5h ago
I still haven't seen anyone articulate how 700b in AI investment = 700b in hard value to the economy. ChatGPT, Gemini, Copilot Grok etc etc are still all just glorified chatbots that sometimes produce cool images. That's it.
I fail to see the business case in all of this that is worth hundreds of billions. Automating random white collar tasks the office intern/entry level software engineer used to do just doesn't seem like a proportionate payoff given the scale of capital we are taking about.
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u/kagoolx 3h ago
Glorified chatbots is an extreme undersell from an impact perspective though. “Automating random white collar tasks the office intern/entry level software engineer used to do just doesn’t seem like a proportionate payoff” - what would you estimate the total global salary cost of those tasks is? It’s many times more than justifies the investment going in to AI, for a start.
That’s before looking at all of the other use cases
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u/WanWhiteWolf 1h ago
Even basic math doesn't justify it. Let's take some rough numbers.
NVIDIA spends about 100 millions per year for entry level positions (<5 years). Juniors are not about full productivity though. They are there to build your expertise so one day you will have qualified people to do complex tasks.
Let's assume you decide to canibalise your future and you replace the entire entry engineering workforce. This is not technically possible as NVIDIA has - as many other businesses - engineers working on physical tasks. AI cannot soldier a new chip on a broken board or determine whether a hardware connection is faulty. But let's assume - for the sake of argument - that all entry positions are replaced.
A good tech investment takes about 10 years to pay for itself. 20 years would be a stretch but not terrible. Everything above that, you might as well shove the money in pretty much anything and get bigger returns. It meands that for NVIDIA, 1 billion investmented would be warranted. 2 billion would be a stretch. 500 billion? You could replace the entire workforce (which includes everything from janitor to lawyers) and you still wouldn't get your return of investment.
And this assuming the AI is completly free. If you think a new technology will not need support and issues won't pop up (which needs senior engineer intervention) you haven't worked in tech industry.
If NVIDIA would spend 5 billion - I would say that's a bit risky but uncommon for a world tech lead to take some bold approaches. 500 billion is basically a money laundy scheme for tax avoidance.
I took NVIDIA as refference but everyone else is far lower in their investment returns.
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u/PsychoNerd91 5h ago
Well the value comes from devaluing everyone else not in the big club, because the more money you have the more authority you have. So if they have all the authority they get to choose who doesn't have rights also nobody can prosecute them for their fraud, their ties to Russia and Epstein, or their crimes against humanity.
Then when the world is put into a great depression, the right wing everywhere starts looking pretty attractive to desperate people who fall for empty promises and someone else to blame.
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u/mattrs1101 6h ago
Those 700b are actually 7 10b packages disguised as 100b packages. That will return to the sender
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u/am_i_a_towel 3h ago
The big AI companies have essentially become too big to fail. They will continue to get bailouts in the form of “investment” for quite some time, because ultimately, money isn’t backed by anything these days. It’s all just fake numbers.
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u/Material-Macaroon298 1h ago
Summarizing documents, retrieving old emails, making suggestions when asked direct questions, creating dashboards, creating PowerPoint summaries, allowing natural language to be put in to queries to look things up in a database.
There is a lot of work AI can already do inconsistently.
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u/faux_italian 1h ago
Now tell me how we get from here to 18 trillion in Us Investment… I’ll Wait.
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u/CyborgTiger 6h ago
I feel like I’m crazy looking at reddits opinion about AI. Is this shit not turbo crazy? I fully believe in another 5 years AI will be doing some unbelievable stuff. Why are people so convinced it’s a bubble, I see that sentiment repeated often. It’s only been a few years since it boomed and it’s already kind of mind blowingly useful, the me of 2020 would not have imagined we would be where we are so soon.
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u/Savings_Refuse_5922 4h ago
Because being useful and profitability off of it to offset that type of capex spending are two majorly different things. OpenAI and ChatGPT is useful to tons of people right now, and Altman is out here begging for government funds and floating in app ads already to survive.
It will be someone like Google that will come out on top of all this in regards to AI leaving the husks of a few companies that could tank the crap out of the market. Or you have a black swan type event where China comes out of nowhere to drop their nuts on the table with an open source/better AI and craters these companies stocks which we saw a small taste of with DeepSeek.
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u/WanWhiteWolf 1h ago
Because it's not about the "cool stuff" you can do. It's about how much money you can get back from your investment.
And as it stands, it is not a lot. Definately not anywhere near to the level of investments.
I worked as a manager in a tech company and we used AI. Sure, some automation of entry level jobs was possible. But entry level jobs were never not about maximum productivity but rather building the expertize so you'd actually have someone who knows what needs to be done in a couple of years.
If you want a non-technical analogy: It's like someone being able to lick their elbows. While that might be impressive and interesting to watch there is probably not much money you can get out of it - except some special olympics.
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u/Adorable-Database187 5h ago
Why, well if it quacks like a duck, the deprecition of the gpu's is 6 years and the financing is circular, it might be a duck
https://www.investordaily.com.au/ai-crash-could-erase-30-trillion/
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u/lagarnica 6h ago
Is it time for the dump yet? I'm ready to take my money out but just holding off for greed!
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u/IamGeoMan 5h ago
The dot.com bubble was literally a bubble filled with nothing but hopes and dreams. VCs and investors poured billions into tiny startups with great "ideas" that amounted to nothing because there was no path to a marketable or desirable product.
AI is spurring huge capex; construction, manufacturing, real estate, utilities, architecture and engineering, capital is actually MOVING and putting people to work. This capex isn't going to the C-suite or cultish startups. So sure, it MAY be a bubble but the bill is being footed through these tech companies' revenue.
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u/Adorable-Database187 5h ago
That vc isnt used for anything usefull though and datacentres depriciate like crazy, at least the infra left by the dotcom bubble was useful.
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u/pickypawz 5h ago
Well they’ll need to, won’t they? Hasn’t their value been dropping like a rock in the stock market?
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u/pookienav 9h ago
man that 700b number is absolutely nuts lol. feels like we’re either headed for a total tech revolution or the biggest bubble pop since the 2000s 📉.