How long can new fads -ie AI everywhere – not be profitable?

Question

I'm referring to the fact that we're seeing an explosion of startups revolving around the concept of putting Ai into our lives, sometimes being perceived not as useful or straight up dishonest (see PearAi). How long do these "money to everyone and their mothers who put Ai into something" lasted in the past? I'm not referring to Ai, which is just the latest trend, I'm asking for examples of past fads that had a boom akin to this one. I'm asking how long the period of startups blooming like flowers in spring lasts usually before these startups are actually required to turn a profit or die

null_investor · Accepted Answer

It might go longer than expected, but always those bubbles tend to pop in 3-5 years, I'd say we're still in the middle of the cycle. Read Sequoia's "AI's $600B Question" post for more information about the money being pumped into AI.
I doubt we'll have a big bubble pop though, big tech will continue to invest in AI at similar values or increase the rate, what may change might be the hardware sales (bear on NVidia), but the run after AI talent will continue to happen for many years and possibly increase. Also, with more specialized hardware people might run away from expensive h100s towards cheaper alternatives or ASIC solutions.
Many small startups without a PMF will all fall apart, though, with OpenAI and other more established players surviving and potentially focusing on more profitable products (like ChatGPT) than newer initiatives or "AGI" research.

kingkongjaffa · Answer

For as long as VC can&rsquo;t tell that LLM&rsquo;s won&rsquo;t ever cause emegent AGI / as long as the market will bear product with hallucination and content written in &ldquo;that AI style&rdquo;.I suspect the true market size is not close to the lofty hundreds of billions all things considered.

kristjank · Answer

If you take a look at how long it took for the market to realize the Covid-era tech bubble and mass hirings were, well, a scam, I would say that 3-4 years are about the right time period for fad-driven economies like the US.

onemoresoop · Answer

It's the same throw it at the wall and and hope something sticks attitude. As long as there a will and money to invested this type of thing will continue.

austin-cheney · Answer

They will continue to be unprofitable as long as the investment funding allows.