What Remains After an AI Collapse?
Last week, Ed Zitron wrote a long piece arguing generative AI is unsustainable and due for a collapse. Many sections resonated with me while others that had me cringing. I do believe the field is over-invested in at the moment and the largest players will have a very difficult time sticking the landing. I also believe many AI critics are over-fitting metaverse, crypto, Web3, and NFT narratives to AI.
Ed argues an AI capitulation will lead to a stock price collapse, vast layoffs, and the shuttering of countless firms which bet too big on AI or serving those that did. Large AI companies will raise prices to try to extend their runway, impacting many start-ups that modeled their businesses on ever-falling prices.
Low interest rates in 1998–99 facilitated an increase in start-up companies. In 2000, the dot-com bubble burst, and many dot-com start-ups went out of business after burning through their venture capital and failing to become profitable.
Mountains of cash were invested into internet start-ups, both directly and indirectly. Hardware was purchased, infrastructure was stood up, and software frameworks emerged and found traction.
