You’re getting downvoted because you touched on a sensitive spot with some folks, but you’re right.
If other countries want to stop their reliance on US tech then they need to build better tech. Your BlackBerry quote shows that playing out in reverse. A non-US company dominated the market, a US company built something better (the iPhone) and the non-US company imploded.
Amusing that the bits the “manufacturer asked to be redacted” in the images appear to be the identifiers for common off-the-shelf electronic components, including a standard memory card. Is that really super secret IP?
Perplexity is one small iteration away from just a classic AI wrapper.
It was amazing early on in demonstrating what search could be, but frankly there’s not much reason for it to exist much longer.
The big players can, and are, just replicating its core functionality. The moat is gone.
I’d have to agree that they’re probably near the top of the list of companies about to get wiped out by a bubble deflation. Possible they get acquired by some sucker looking to establish AI creds but the market for that has probably passed as Wall Street is becoming super skeptical of all things AI at the moment.
With the Wall Street wagons circling on the AI bubble expect more and more puff PR attempts to portray “no guys really, I know it looks like we have no business model but this stuff really is valuable! We just need a bit more time and money!”
It’s not good, and is a sign the market is getting increasingly bearish on the future of AI from a business standpoint. That doesn’t mean the tech is bad, but these are signs Wall Street is saying the math doesn’t add up here and thus there’s storms building on the horizon.
Coreweave has taken on a ton of debt to pay for everything they’re building. Investors can make money by lending Coreweave money and charging interest (aka a bond).
Separately, investors can buy a derivative product that is a bet that Coreweave won’t be able to pay this money back. This is a called a “credit default swap.” If Coreweave starts missing payments or can’t pay back the loan this instrument pays out.
The price of the instrument is linked to the likelihood that Coreweave won’t be able to repay the money. Given growing questions around their financial business model the price of these derivatives has been rocketing up over the last few months. In plain speak this means the market increasingly thinks Coreweave won’t be able to repay these loans.
Thats mirroring broader Wall Street sentiment these last few months that the math isn’t adding up on AI and all the spend committed isn’t mapping out against money likely to be available to pay for all that. Investors are increasingly making plays for the AI bubble popping and the price of these credit default swaps shooting up is one metric indicative of that downturn positioning.
The data on this is available in various financial data platforms and has been written about by financial news outlets.
Yes, the price of Coreweave default swaps has jumped 53% since October. In the eyes of the bond markets they’re basically toast… a ticking debt bomb waiting to implode.
I’m bullish on AI as tech but folks are starting to sniff out that the financials of everything going on at the moment aren’t sustainable for much longer.
I hope we have more of a “reality correction” than full blown bubble bursting, but the data is increasingly looking like we’re about to have a massive implosion that wipes out a generation of startups and sets the VC ecosystem back a decade.
Good article although especially in tech it’s not so simple. Thanks to games with depreciation and other financial engineering a company may look “profitable” but still be quite unhealthy or at risk. One generally needs to look at “profit” in the context of cash flow.
I.e. a company could be “profitable” but also basically broke at the same time with no cash to pay people or suppliers.
The issue is, in part, a concern that ChatGPT responses are often just simple derivations of the original content in ways that wouldn’t be considered fair use.
Get the popcorn ready for when that all implodes. Most of these folks getting funding don’t have the slightest clue on how to build a sustainable business.
When the bubble pops, and it’s very close to popping, there’s going to be a lot of burning piles of cash with no viable path to reviver that money.
This is BS. It’s like saying “We robbed a jewelry store and sold the jewelry. Now the police are poking around to see if anyone is wearing the jewelry we stole. Blasphemy! But don’t worry we will protect your privacy!”
Of course the Times wants more evidence that the content OpenAI allegedly stole is ending in things OpenAI is selling.
For all the AI slop and studies saying AI is more hype than substance I will say that this use case is one that seems very legit.
The stock photo industry was always pretty bad and silly expensive. Being able to custom generate visuals and photos to replace that is a good use case of AI IMHO. Yes sometimes it does goofy things, but it’s getting quite good. If AI blows up the stock photo industry few will shed a tear.
By low, sell high. Any Nvidia shareholders would be foolish not to sell at least part of their holdings right now. Don’t ride the bubble to the bottom.
If other countries want to stop their reliance on US tech then they need to build better tech. Your BlackBerry quote shows that playing out in reverse. A non-US company dominated the market, a US company built something better (the iPhone) and the non-US company imploded.