AI Hype is now Turning to a Bubble
AI hype is now turning to a bubble.$NVIDIA(NVDA)$ $Advanced Micro Devices(AMD)$ $S&P 500(.SPX)$
There is a fundamental issue in the business model.
AI labs spent $100 million to train a model in 2023 and they sold premium access for $20/month.
Now they are spending $1 billion to train because of scaling laws and still charging $20/month.
There is no way out.
They can’t scale down as they would lose in competition, they can’t charge $50 because it’ll be inaccessible to most people.
The only way out is that technology should rapidly develop and cost of training should decline drastically.
In that case, they won’t have any advantage and models will be commoditized.
The model is bound to collapse.
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- Rainy777·2025-08-28I think you are 100% right that AI will be commoditized with very little profitability.LikeReport