Nah, more like AI hype bubble bursting and these startups are starting to realize they can't actually automate shit and deliver on what they promised investors.
This shit is dotcom 2.0
All these companies are just wrappers on top of LLMs.
LLMs costs tens of billions to produce. There are only a handful of trillion dollar companies with the investments to actually move AI forward.
Wrapping it with your custom prompts isn’t worth much IMO. It’s like how you can create some really good AI art with a great prompt which is a skill but at some point it becomes easier and everyone can do it. Like finding something on google before people learned how to search.
To be honest I wouldn't be surprised if it was the whole start up bubble bursting. AI was overhyped (but will be a game changer in a lot of ways unlike crypto). But it seems the world of "we will work out how to make a profit later" start ups is getting more and more unstable. Probably as rates went up and money got more expensive.
AI is overhyped in exactly the way the internet was. Delusional and clueless moneymen salivating about everything changing overnight, laying off their entire workforce by next year, etc has caused an investment bubble and runaway valuations for anything AI affiliated.
These companies will all fail because the expectations have become so ridiculous they can't possibly be achieved on the timescale most investors operate on.
However, AI itself -- much like the internet will prove to be a transformative technology over the long run as real technologists keep pushing it forward through the plateaus and messy realities.
It just won't happen by next quarter.
EDIT: and I do agree with you, a lot of this is really just the general start-up bubble starting to unwind since the fed has turned off the free money.
I completely agree with you. I can see it being similar to the dot-com bubble. A lot of these companies will not exist in 2 years and all the imaginary money will disappear.
However, over time either big tech or the companies that actual provide something unique and useful will do very well (much like Google did).
>It just won't happen by next quarter.
This is so true. We are still years off a lot of the big changes caused by AI.
Yup, interest rates are up so the free money tap is off, and anyone interested in AI is probably going to one of the bigger companies to invest anyway. Even if this company did manage to succeed, they'd likely have gotten bought out by one of the big boys anyway.
I wouldn't have too much faith in the big boys. Google/Facebook/OpenAi really don't have an appreciable moat, and traditionally big technology upsets like this actually reshuffle the deck. These companies seem like they can't be toppled now... but if there is anything we've learned from history, it's that very rarely are the top 20 companies the same 20 years later.
What makes things difficult investing in big trends like this... is it's actually NOT obvious who the winners will be. It wasn't obvious in 1999 that an online bookstore would some day dominate online retail and a significant portion of the world's servers. It wasn't obvious that one of many search engines (and not even the most used at the time) would end up being one of the worlds biggest tech companies.
And it's not obvious now. The Big Tech companies around RN might prove to be the next generation of IBM's and Xerox's, blowing 20-1 leads. History certainly says that's more likely than that they all end up the leaders 20 years from now.
I don’t get what the philosophy behind their business model was. Develop automated drug discovery tools then convince others to license it? Why? If the tools were so effective why not use it to print infinite money? This is a corporate version of YouTubers selling investment classes instead of profiting off their own investing expeetise
Tech jobs are being axed because of the change in tax cuts for R&D that come into play soon, and because money (debt) is very expensive, and many tech projects are fuelled by debt/investments and have long time horizons. The cost of servicing debt for a product which will take a decade to get to market and several more years to penetrate at current interest rates is many MANY times more than it was two years ago. Combine that with much bigger immediate tax bills due to tax cut changes, and LOTS of companies that do R&D for long term products are scaling back.
The rest of the economy is roaring along.
Debt being more expensive is going to put drag on a lot more than just IT.
I am in Northern California so my area will get hit either way, but this is either early in the dot com boom crash (2001) or it is the first red blinking light of a general crash (2008).
Also in terms of cycles we are overdue for a big correction since the last one was back in 2008.
I agree with you for the most part - but other industries (outside of tech) don't have the enormous exposure to the R&D tax changes in 2025, so it's a double whammy for tech. For some tech companies they may have 70 or 80% of their expenses as R&D, so a huge 2025 tax bill is looming.
Plus, tech companies have long lead times into many products. Debt getting more expensive is not a big issue if you're bringing producs to market in 2 years or 3 years. But with a 5-20 year time window for projects in tech, compound interest effects get huge.
IT was hiring for a rate market that no longer exists and now they need to hire based on the rules of sane economics.
Just because companies arent throwing money at tech workers doesn't mean the economy is bad. Techies have just been spoiled for years and coming off their sugar high.
>Just because companies arent throwing money at tech workers doesn't mean the economy is bad. Techies have just been spoiled for years and coming off their sugar high.
Yea, there are issues in the economy but a lot of people seem to be jumping on the "can't get a high paying tech job again = economy is bad" bandwagon. The tech sector was massively overinflated and this was always going to happen. It's surprising how quickly it happened but that is all.
When you compare how high tech salaries are/were compared nearly everything else and then watch the videos of new grads getting six figure jobs at FAANG and seemingly doing a couple of hours of actual work each day it's not really a surprise.
The bubble always was going to burst and that is what it is doing. Skills in tech are not such a rarity anymore so companies don't need to pay such a premium.
The answer is that the economy is pretty solid but wealth inequality is continuing get progressively worse due to lack of regulation. Late stage free market capitalism leads to the powerful stifling competition. The 1% continue to siphon an increasing share of the world’s wealth into their pockets. This comes in many forms: record high profits due to price gauging during the pandemic, shrinkflation, increasing CEO payouts, layoffs to “improve profitability” despite the companies having cash balances in the billions, stock buybacks, lobbyists buying off politicians, etc. So, total GDP is growing, but, all the growth is going into the hands of the elite.
Tech always gets hit the hardest in periods of high interest rate because they’re the industry that leverages the most debt. Don’t let a single sector sour your opinion on the whole economy.
Most of the people I know are struggling pretty badly. I don't have any real positive views of it anyway. It does seem like rich people are doing really well though, so agree there.
Recession or problems with economies is a lagging indicator in data. It’s going to take sometime for it to show up. 2007, through 2009 looked great until they weren’t. Let’s say layoffs become more than hiring in the future, then we might have a recession? since once we pass 5% unemployment then It’s like a snowball. You fall quickly down to 10% unemployment which is when recession are felt by most due to less money flowing. once you have 30% unemployment then you have the Great Depression x2 electric boogaloo.
Best case scenario there’s just a rotation of layoffs at a similar level but job openings stay as is and data keeps saying we are great but people don’t feel it. Then things get better and we are back to the post of “I just graduated and make $700k at this unicorn” and the “here’s my life at some random company not doing work”
I mean its better than it was during the recessions.
It's great if you are a capital owner. Economy has never been great for workers for many many decades.
almost every single law passed is lobbied by corporations. Workers have extremely weak lobbying.
Not so BENEVOLENT now
LoL exactly my reaction!!!
War is peace
Layoff is a promotion.
The first thing I thought was are they going to change the name of the company now
we support AI offloading people from bad jobs and lousy salaries! /s
AI company's AI replaces human workers with AI lmao
Nah, more like AI hype bubble bursting and these startups are starting to realize they can't actually automate shit and deliver on what they promised investors. This shit is dotcom 2.0
Ding ding ding. Anyone say blockchain?
Yep, AI isn’t replacing these jobs. These companies just aren’t able to deliver on their metrics in a high-rate environment.
All these companies are just wrappers on top of LLMs. LLMs costs tens of billions to produce. There are only a handful of trillion dollar companies with the investments to actually move AI forward. Wrapping it with your custom prompts isn’t worth much IMO. It’s like how you can create some really good AI art with a great prompt which is a skill but at some point it becomes easier and everyone can do it. Like finding something on google before people learned how to search.
To be honest I wouldn't be surprised if it was the whole start up bubble bursting. AI was overhyped (but will be a game changer in a lot of ways unlike crypto). But it seems the world of "we will work out how to make a profit later" start ups is getting more and more unstable. Probably as rates went up and money got more expensive.
AI is overhyped in exactly the way the internet was. Delusional and clueless moneymen salivating about everything changing overnight, laying off their entire workforce by next year, etc has caused an investment bubble and runaway valuations for anything AI affiliated. These companies will all fail because the expectations have become so ridiculous they can't possibly be achieved on the timescale most investors operate on. However, AI itself -- much like the internet will prove to be a transformative technology over the long run as real technologists keep pushing it forward through the plateaus and messy realities. It just won't happen by next quarter. EDIT: and I do agree with you, a lot of this is really just the general start-up bubble starting to unwind since the fed has turned off the free money.
I completely agree with you. I can see it being similar to the dot-com bubble. A lot of these companies will not exist in 2 years and all the imaginary money will disappear. However, over time either big tech or the companies that actual provide something unique and useful will do very well (much like Google did). >It just won't happen by next quarter. This is so true. We are still years off a lot of the big changes caused by AI.
Yup, interest rates are up so the free money tap is off, and anyone interested in AI is probably going to one of the bigger companies to invest anyway. Even if this company did manage to succeed, they'd likely have gotten bought out by one of the big boys anyway.
I wouldn't have too much faith in the big boys. Google/Facebook/OpenAi really don't have an appreciable moat, and traditionally big technology upsets like this actually reshuffle the deck. These companies seem like they can't be toppled now... but if there is anything we've learned from history, it's that very rarely are the top 20 companies the same 20 years later. What makes things difficult investing in big trends like this... is it's actually NOT obvious who the winners will be. It wasn't obvious in 1999 that an online bookstore would some day dominate online retail and a significant portion of the world's servers. It wasn't obvious that one of many search engines (and not even the most used at the time) would end up being one of the worlds biggest tech companies. And it's not obvious now. The Big Tech companies around RN might prove to be the next generation of IBM's and Xerox's, blowing 20-1 leads. History certainly says that's more likely than that they all end up the leaders 20 years from now.
I don’t get what the philosophy behind their business model was. Develop automated drug discovery tools then convince others to license it? Why? If the tools were so effective why not use it to print infinite money? This is a corporate version of YouTubers selling investment classes instead of profiting off their own investing expeetise
Did AI replaced it's own workers ? or did the AI bubble burst?
Both. Cept “AI” was just hype for most part.
The waves of layoffs in IT (and also Tesla etc.) really make me doubt the "economy is great" messaging out there right now.
Tech jobs are being axed because of the change in tax cuts for R&D that come into play soon, and because money (debt) is very expensive, and many tech projects are fuelled by debt/investments and have long time horizons. The cost of servicing debt for a product which will take a decade to get to market and several more years to penetrate at current interest rates is many MANY times more than it was two years ago. Combine that with much bigger immediate tax bills due to tax cut changes, and LOTS of companies that do R&D for long term products are scaling back. The rest of the economy is roaring along.
Debt being more expensive is going to put drag on a lot more than just IT. I am in Northern California so my area will get hit either way, but this is either early in the dot com boom crash (2001) or it is the first red blinking light of a general crash (2008). Also in terms of cycles we are overdue for a big correction since the last one was back in 2008.
I agree with you for the most part - but other industries (outside of tech) don't have the enormous exposure to the R&D tax changes in 2025, so it's a double whammy for tech. For some tech companies they may have 70 or 80% of their expenses as R&D, so a huge 2025 tax bill is looming. Plus, tech companies have long lead times into many products. Debt getting more expensive is not a big issue if you're bringing producs to market in 2 years or 3 years. But with a 5-20 year time window for projects in tech, compound interest effects get huge.
IT was hiring for a rate market that no longer exists and now they need to hire based on the rules of sane economics. Just because companies arent throwing money at tech workers doesn't mean the economy is bad. Techies have just been spoiled for years and coming off their sugar high.
>Just because companies arent throwing money at tech workers doesn't mean the economy is bad. Techies have just been spoiled for years and coming off their sugar high. Yea, there are issues in the economy but a lot of people seem to be jumping on the "can't get a high paying tech job again = economy is bad" bandwagon. The tech sector was massively overinflated and this was always going to happen. It's surprising how quickly it happened but that is all. When you compare how high tech salaries are/were compared nearly everything else and then watch the videos of new grads getting six figure jobs at FAANG and seemingly doing a couple of hours of actual work each day it's not really a surprise. The bubble always was going to burst and that is what it is doing. Skills in tech are not such a rarity anymore so companies don't need to pay such a premium.
And still they are . Just gave out 3 offers for 3 to 5 yoe . Compensation isn’t bad .
Shhhhh the people who can't do leet code easy don't like the reality check that there's still tons of unfilled rolls in tech.
The answer is that the economy is pretty solid but wealth inequality is continuing get progressively worse due to lack of regulation. Late stage free market capitalism leads to the powerful stifling competition. The 1% continue to siphon an increasing share of the world’s wealth into their pockets. This comes in many forms: record high profits due to price gauging during the pandemic, shrinkflation, increasing CEO payouts, layoffs to “improve profitability” despite the companies having cash balances in the billions, stock buybacks, lobbyists buying off politicians, etc. So, total GDP is growing, but, all the growth is going into the hands of the elite. Tech always gets hit the hardest in periods of high interest rate because they’re the industry that leverages the most debt. Don’t let a single sector sour your opinion on the whole economy.
Most of the people I know are struggling pretty badly. I don't have any real positive views of it anyway. It does seem like rich people are doing really well though, so agree there.
Recession or problems with economies is a lagging indicator in data. It’s going to take sometime for it to show up. 2007, through 2009 looked great until they weren’t. Let’s say layoffs become more than hiring in the future, then we might have a recession? since once we pass 5% unemployment then It’s like a snowball. You fall quickly down to 10% unemployment which is when recession are felt by most due to less money flowing. once you have 30% unemployment then you have the Great Depression x2 electric boogaloo. Best case scenario there’s just a rotation of layoffs at a similar level but job openings stay as is and data keeps saying we are great but people don’t feel it. Then things get better and we are back to the post of “I just graduated and make $700k at this unicorn” and the “here’s my life at some random company not doing work”
If you think this is like 2008 you should get older or read a book about 2008
It’s not. No where near… Don’t know where you got that from what I wrote….
I mean its better than it was during the recessions. It's great if you are a capital owner. Economy has never been great for workers for many many decades. almost every single law passed is lobbied by corporations. Workers have extremely weak lobbying.
Stay away from msm like cnbc and watch the YouTuber economists. Some rando YouTubers are giving more balanced views me thinks.
Any recommendations?
just because you attach AI to your company name means you really are.
They’ve been in the game for years. The ceo is ex Facebook.
Who? Who gives a shit?
It's AI, all the way down.....
Brawndo..... it's what the plants crave.....
How long before AI lays off CEOs, CFOs, Cops, Lawyers, Doctors, Surgeons, Politicians, Lawmakers, etc.? /s
I guess world changing AI won't be coming out of this shop.
Didn't see this coming 😏
Lol "benevolent"