Comparing generative AI to other tech booms feels natural. Every tech company is investing billions and cramming it into every corner of every product. Massive data centers are being planned, and more than a third of the US stock market is made up of the 7 largest tech companies. But the enduring product of this era will not be the models.
The enduring product of this era will be financial collapse.
The AI bubble is going to pop. And when it does it will take a significant portion of the economy with it. Tech giants could go out of business. Life savings lost. And the longer the bubble grows, the more damage it will do.
Generative AI is bad business. The major tech companies have invested more than $560 billion over the last 2 years. And they’ve made $35 billion in revenue. There’s also the carousel of contracts where the same 4 companies pass billions of dollars around in a circle. Another example is the Oracle data center contract that promises more GW of compute than can feasibly be built, all while using chips that aren’t yet shipping, and is being paid for by a company making on a fraction of what they’ve agreed to pay. Finally there’s the fact that Nvidia, which makes up 8% of the US stock market, is only valued that high because people keep buying their chips. Chips that Nvidia pays other companies to buy.
This bubble is going to pop. Investors will stop setting their money on fire once they realize these models can’t replace our labor in the ways they have promised. Once the bubble pops, the vast amount of resources needed to keep the foundation models online will disappear. More simply: I expect most, if not all, foundation models to disappear.
I think it would be a grave error to plan for a future where we expect LLMs to exist. (Sure, the open-source models won’t be going anywhere, and I believe the future of this tech to be local SLM inferencing. But that’s another topic.) Building infrastructure to exist alongside ChatGPT is a mistake when ChatGPT won’t exist in the future. We don’t have to learn/use/accept these tools when they don’t serve us and likely won’t even be around.
The future is…
Unions.
We need to grow unions. Organized labor can help protect us from and limit use of AI like SAG-AFTRA did for its members. These same unions can help workers negotiate better severance packages when laid off after the bubble pops. But workplaces need to organize, if they haven’t already. Tech workers, for example, are already starting to learn that they aren’t in as high demand as we watch tens of thousands get laid off in service of “AI productivity gains.”
I have a lot more to say and research on this topic, but I’ll end it here for now: We have to invest in people. Our art, our thoughts, our labor is the future. We must protect that future.