Cue the collective 'DUH' from Slashdotters in 5, 4, 3, 2, 1...

"The Tech Bubble"? Does he mean the Dot-Com Boom?

These will be the first to go.

Of course "go" in this case is get the money and run the hell away to Brazil or something.

"Someone's gonna get burned there, I think. Someone is going to lose a phenomenal amount of money."

Yep. Most of the AI companies will crash and burn; it's inevitable. A small percentage will go on to billions and billions of dollars, and ten years from now everybody will be saying "we shoulda invested in that AI firm when it was still affordable, we woulda been rich!"

The maverick CEO promises an entire Silicon Valley techbro cult's worth of people trying to find the guy who did this by FY2026.

"When bubbles happen, smart people get overexcited about a kernel of truth"

That's a funny way to spell "stupid and ignorant people" but it makes sense he'd spin it that way to avoid saying that his investors are idiots.

There aren't well defined limitations that are apparent yet (to everyone). Investors are assuming a linear growth of tech, LLMs->Reasoning models->Human AI-> Superhuman AI and all this will happen in just a few years with no roadblocks. Industries in growth/investment mode don't have to answer for R&D especially now, everyone is so worried about missing out on this investment they are going all in on ANYTHING AI related. But once the limitations set in there will be a pulling back. AI also only approximates human thinking and the training is done at a human level. Another problem is the smallest transistors use more energy than neurons on the order of roughly six orders of magnitude of energy to switch. At some point it's going to be cheaper to use a human than a super computer. Energy costs haven't set in.

Once realities set in there will be a bubble pop, it will be huge. There will be winners and losers. I think a lot of these investments will be scaled back. The real disruption is going to be AI 2.0 when people figure out ways to apply AI everywhere.

If I was an investor, I'd be mad at the guy I gave money to for admitting I invested my money in a whole lot of hot air.

Then again, if I was investing in this idiocy, I'd deserve everything I'd get...

"He added that he thinks it's "insane" that some AI startups with "three people and an idea" are receiving funding at such high valuations."

Because the insane thing is definitely the valuation of the random little guys with costs barely distinguishable from zero; rather than serious professionals who need to set some billions of dollars a year on fire just to keep the lights on.

I'm sure that this view of who is and who isn't bubble is entirely unrelated to which kind of AI startup Mr. Altman is running.

Bubbles for Startups happen for one very important reason - Tax avoidance by the rich.

Say you have enough money to live your life totally safe. 13 million dollars is a good number (based on what American estate get no taxes). Then say you have 10 million more dollars and you want to invest it. But you hate the idea of paying taxes, particularly over small gains that may vanish 5 years later.

So you do what I call the lottery. You take your 10 million dollars and invest in 10 different long shot investments. If you have a good investment advisor, three years later you get:

3 investments that go broke.

3 investments that are flat.

3 investments that did well, up about 30% on average (about 10% per year).

1 block buster that is now worth 10 million.

Your total value is worth about 17 million (not including the 13 million you live on), a nice return for 3 years.

Now you sell everything except your blockbuster, you get 7 million back, with a cost basis of 9 million dollars. Go ahead and sell 20% of your block buster, you owe NO taxes, even though you have turned 10 million into 9 million in cash, plus 8 million of equity in a blockbuster.

What it comes down to is this - the US tax system rewards people that get both large gains and large losses, rather than moderate gains. Bubbles are LOVED by the wealthy - it gives them both things they want.

The obvious question here is, how are so many people with so much money so easily filled? Imagine if everyone with money and everyone who ran large companies was resistant to empty hype. The world would be so much better then.

So when you say AI you mean machine learning and llms. Specifically large language models is the big one.

You need training data to make llms work. And the bulk of the training data has been coming from publicly available sources like web forums crawled by bots.

Those forms are either starting to shut down the bots access or they are so full of AI slop they are useless for training.

That means in the near future the only people with access to training data are going to be major platform holders. Google, microsoft, Apple etc.

That means AI is a one-time Gold Rush that will quickly pick winners and losers and create a consolidated market with between two to three players.

As soon as the consolidation is done then yeah the bubble is going to burst. I'm not entirely sure how long but I would think within two or three years tops with how fast things go now. I wouldn't expect more than five but I really am just guessing.

We'll be witnessing a recurring surge of "AI" just like it happens with 3D TVs.

Sure, tech improves each time but the real deal is still on the horizon.

Or to put it in a car analogy, flying cars.

The idea that a bunch of investment money rushes into a bunch of companies in a new promising field and that many/most of those companies will eventually falter is the normal evolution of every single big and most small things that have happened in tech over the last hundred years. This is normal and good and to be expected. Of course, a lot of investors will lose a lot of money, a few will gain a fortune, but at least from the perspective of society, a big win results.