The big question is whether the demand will stay if the subsidized pricing ends. That's what the bubble talk is about. Right now all the players compete for market share and don't care about the losses (hence the debt). But what happens if no one wants to lend them anymore?
There is no evidence they are losing money on inference, though?
Also if they are keeping the price low because they want to gain market share and reduce the competitiveness of Chinese models they won't be able to raise prices without providers serving open models (at cost + low margin) severely undercutting them.
There's no evidence they're making money, and we already know from the projected datacenter capacity in a few years that there will be for more supply than demand, so the major providers will have to repay that debt. Even if they are making money on inference, it's nowhere near enough to cover the bill. It's a losing proposition either way, especially with Chinese models now in play.
There is. Specifically the pricing for open models from third party providers on OpenRouter since inference is a "commodity" at this point. Unless we think that Opus/GPT-5.6 are many times less efficient than GLM 5.2 or Kimi Openai and Anthropic are making money from inference.
> it's nowhere near enough to cover the bill
Obviously it does not cover R&D, marketing and other spending but nobody has ever claimed that here.
I see your point, but Anthropic and OpenAI are not only less efficient, they have much higher operating expenses because of their massive AWS/GCP spending (due to not owning it) and have more capital expenditures than everybody else. It's not comparable to third-party providers making some profit on the margin.
They will be instantly bought out by companies, not individuals. The consumer bubble won’t pop for quite a while yet. Production also won’t ramp up while lack of real competition keeps the demand high.
Thing is, GPUs will always be on demand, look at their history, initially for gaming, then for hash cracking, then 3D rendering, then for crypto mining, and now AI training and fine tuning. When AI bubble bursts, there will be another bubble taking over.
The only solution is more companies making high end units, only competition will make it better for consumers.
Well, if no body can say when it will pop, then can we really say it's a bubble and it's overvalued?
I can tell you it will pop in 10 years and when it pops, it will still be 20x bigger than in 2026. Does that even make any sense?
People said AI bubble will pop soon in 2024 and that it was overvalued. Turns out, many AI stocks 10x, 20x since 2024. Actual usage has gone exponential as well. Anthropic revenue went from $100m ARR at start of 2024 to $80b ARR today.
> Well, if no body can say when it will pop, then can we really say it's a bubble and it's overvalued?
Well, given the literal trillions being spent, the only ways this pays off are:
1. AI replaces a non-trivial fraction of human employees.
2. Someone builds a Culture Mind, and humans become (hopefully) pampered pets of AIs we don't understand. Seems unlikely, but it would arguably count as a payoff even if it made money meaningless.
Or maybe the AIs don't want pets, and you get SkyNet. Which definitely doesn't care about paying off anyone's investments.
When you look at various news articles about investors, yeah, there are definitely a lot of rich people who think that they're going to automate all human labor or just bring about the Singularity. Possibly with them in charge of the rest of us. If you don't make these kinds of wild assumptions, then yeah, this is looking like one of the biggest bubbles ever.
Did you read your own article? It's well less than $3 trillion.
Now let's build the model out more. What is the projected revenue, backlog, improvements in existing big tech businesses such as AI helping Meta's ad business?
1. AI replaces a non-trivial fraction of human employees.
I mean, it's pretty clear that's going to happen. How could it not?
The only question is whether resources are optimally allocated at the moment to prepare for this. That seems unlikely at best. So yes, there is probably a bubble, and if so, then yes, it will pop, and then life will go on, with resources better allocated. Just like when the dot-com bubble popped.
no they won't , the bubble is a financial thing. the demand is real and not going away.
The big question is whether the demand will stay if the subsidized pricing ends. That's what the bubble talk is about. Right now all the players compete for market share and don't care about the losses (hence the debt). But what happens if no one wants to lend them anymore?
I don't think inference is subsidized, it's the training. So what happens is, there's no new models anymore or are released slower.
API inference is probably not subsidized. Coding plans absolutely are.
Good distinction. The demand is partially driven by the low costs, which are only low because the major providers are losing money.
There is no evidence they are losing money on inference, though?
Also if they are keeping the price low because they want to gain market share and reduce the competitiveness of Chinese models they won't be able to raise prices without providers serving open models (at cost + low margin) severely undercutting them.
There's no evidence they're making money, and we already know from the projected datacenter capacity in a few years that there will be for more supply than demand, so the major providers will have to repay that debt. Even if they are making money on inference, it's nowhere near enough to cover the bill. It's a losing proposition either way, especially with Chinese models now in play.
There is. Specifically the pricing for open models from third party providers on OpenRouter since inference is a "commodity" at this point. Unless we think that Opus/GPT-5.6 are many times less efficient than GLM 5.2 or Kimi Openai and Anthropic are making money from inference. > it's nowhere near enough to cover the bill
Obviously it does not cover R&D, marketing and other spending but nobody has ever claimed that here.
I see your point, but Anthropic and OpenAI are not only less efficient, they have much higher operating expenses because of their massive AWS/GCP spending (due to not owning it) and have more capital expenditures than everybody else. It's not comparable to third-party providers making some profit on the margin.
Demand is money.
No bubble, where money?
A financial bubble drives a significant amount of demand. Take away the financial incentive and the demand will cool. I'm not expecting a pop though.
They will be instantly bought out by companies, not individuals. The consumer bubble won’t pop for quite a while yet. Production also won’t ramp up while lack of real competition keeps the demand high.
Thing is, GPUs will always be on demand, look at their history, initially for gaming, then for hash cracking, then 3D rendering, then for crypto mining, and now AI training and fine tuning. When AI bubble bursts, there will be another bubble taking over.
The only solution is more companies making high end units, only competition will make it better for consumers.
When is it popping? Is the AI bubble in the room with us now?
Next month perpetually
Tomorrow? Next year? In 5 years? Nobody can say. But we do know that AI is overvalued, so it WILL pop.
Well, if no body can say when it will pop, then can we really say it's a bubble and it's overvalued?
I can tell you it will pop in 10 years and when it pops, it will still be 20x bigger than in 2026. Does that even make any sense?
People said AI bubble will pop soon in 2024 and that it was overvalued. Turns out, many AI stocks 10x, 20x since 2024. Actual usage has gone exponential as well. Anthropic revenue went from $100m ARR at start of 2024 to $80b ARR today.
Many are saying July 2027, as in the past these market corrections have correlated with Shrek movie releases.
Debt-backed investors have to pay up eventually. =3
> Well, if no body can say when it will pop, then can we really say it's a bubble and it's overvalued?
Well, given the literal trillions being spent, the only ways this pays off are:
1. AI replaces a non-trivial fraction of human employees.
2. Someone builds a Culture Mind, and humans become (hopefully) pampered pets of AIs we don't understand. Seems unlikely, but it would arguably count as a payoff even if it made money meaningless.
Or maybe the AIs don't want pets, and you get SkyNet. Which definitely doesn't care about paying off anyone's investments.
When you look at various news articles about investors, yeah, there are definitely a lot of rich people who think that they're going to automate all human labor or just bring about the Singularity. Possibly with them in charge of the rest of us. If you don't make these kinds of wild assumptions, then yeah, this is looking like one of the biggest bubbles ever.
Can we see some actual numbers, projections, models instead of vibes?
Debt is at $3 trillion right now: https://fortune.com/2026/07/31/ai-debt-hypescalers-capex-cap...
Interest alone, at assumed 5%, amounts to about $150 billions per year. That's probably higher than the combined AI revenue of the top 3 providers.
Did you read your own article? It's well less than $3 trillion.
Now let's build the model out more. What is the projected revenue, backlog, improvements in existing big tech businesses such as AI helping Meta's ad business?
Did you read beyond the headline? It's 1.65 trillion hidden and 1.35 trillion overt - which sums up to 3 trillion.
Ok, so they're using footnotes.
Can you now analyze backlog? For example, Microsoft and Amazon have backlogs of $1.45 trillion. Not including Google, Oracle, Meta.
That's what you should ask the companies spending massive amounts of money on AI though?
1. AI replaces a non-trivial fraction of human employees.
I mean, it's pretty clear that's going to happen. How could it not?
The only question is whether resources are optimally allocated at the moment to prepare for this. That seems unlikely at best. So yes, there is probably a bubble, and if so, then yes, it will pop, and then life will go on, with resources better allocated. Just like when the dot-com bubble popped.
The AI bubble will pop when China gets access to EUV, so the earliest it could happen is 2030
Nvidia has ever so slightly underperformed the SP500 YTD (at the exact time this comment is being typed), so its basically the apocalypse already.