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AI is funded solely by sunk cost fallacy at this point. I wonder how long it will be before investments start getting pulled back because of a lack of ROI. I can already feel the sentiment towards AI and it getting pushed in everything turning negative amongst consumers recently.
AI is funded solely by sunk cost fallacy at this point.
and the us economy an gdp relies solely on ai make of that what you will.
Investment is done really to train models for ever more miniscule gains. I feel like the current choices are enough to satisfy who is interested in such services, and what really is lacking is now more hardware dedicated to single user sessions to improve quality of output with the current models.
But I really want to see more development on offline services, as right now it is really done only by hobbyists and only occasionally large companies with a little dripfeed (Facebook Llama, original Deepseek model [latter being pretty much useless as no one has the hardware to run it]).
I remember seeing the Samsung Galaxy Fold 7 ("the first AI phone", unironic cit.) presentation and listening to them talking about all the AI features instead of the real phone capabilities. "All of this is offline, right? A powerful smartphone... makes sense to have local models for tasks." but it later became abundantly clear it was just repackaged always-online Gemini for the entire presentation on $2000 of hardware.
They're investing this much because they honestly seem to think they're on the cusp of super intelligent AGI. They're not, but they really seem to think they are, and that seems to justify these insane investments.
But all they're really doing is the same thing as before but even bigger. It's not going to work. It's only going to make things even more expensive.
I use Copilot and Claude at work, and while it's really impressive at what it can do, it's also really stupid and requires a lot of hand holding. It's not on the brink of AGI super intelligence. Not even close. Maybe we'll get there some day, but not before all these companies are bankrupt.
I knew it was a bubble since Computex January 2024 when Derb8uer showed an "AI PC case". He asked "What's AI about this PC case?" and they replied that you could put an AI PC inside it.
This reminds me of something that came up recently. Copilot started hallicinating quite a bit more than usual in Copilot reviews. That made me think about the cost of operarion. As they burn money like this, I won't be surprised if they start decreasing inference quality to decrease cost per user. Which also means people relying on certain model behaviour for tasks could get nasty surprises. Especially within automation workflows where model outputs aren't being reviewed.
What's the deal with the "HPE" in some Register articles? It's apparently the Hewlett-Packard Enterprise logo, but articles about HPE don't appear to have that logo.
Is The Register affiliated with HPE now?
When I lose $11 Billion dollars, I have to go to bed without supper.
If you owe the bank $100, that’s your problem; if you owe the bank $100 million, that’s the bank’s problem.
The difference between 100 million and 11.5 billion is about 11 billion. If you own a bank 11 billion that's not only that bank's problem, it's the economy's problem.
is this $11,500,000,000 in real money or speculative money?
So they "lost" $11.5B? Cool, I lost 20 bucks last week and still had to explain it to my accountant 🤭 Feels like the entire AI industry is built on "don't worry, growth will save us", but at some point someone has to pay the electricity bill...
I look forward to the AI bubble bursting, and billionaires looking shocked, 'because there were no signs'
They won't lose any money...
In contrast to the housing bubble, where a lot of the value was in overpriced houses sold to individuals, this overpricing is almost entirely in tech stocks, and tech stocks are almost entirely owned by by the wealthiest 10%, even 1%. The tech billionaires have limited ability to divest themselves of their own overpriced companies and absolutely will lose money.
None of them are going bankrupt, they'll all be just fine when the market recovers in a few years, because that's the nature of capitalism. A bunch of peons, who convinced themselves that the bubble-value of their 401k meant it was safe to retire, will suffer, will have to go back to work - if you're not an oligarch, losing money is painful.
Microsoft also lowered stake in OpenAI from 32.5% to 27%
https://blogs.microsoft.com/blog/2025/10/28/the-next-chapter-of-the-microsoft-openai-partnership/
apparently the bubble might not be as extreme as some people think because the major AI players are all being propped up by companies that actually produce revenues and profits
You know if you invest all your winnings into all the companies that buy your stuff so that they can buy more of your stuff, you are actually not generating any winnings.
Oh no!
Anyway...