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AI Is Starting to Look Like the Dot Com Bubble
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this post was submitted on 13 Aug 2023
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The Internet also brought us a shit ton of functional things too. The dot com bubble didn't happen because the Internet wasn't transformative or incredibly valuable, it happened because for every company that knew what they were doing there were a dozen companies trying something new that may or may not work, and for every one of those companies there were a dozen companies that were trying but had no idea what they were doing. The same thing is absolutely happening with AI. There's a lot of speculation about what will and won't work and make companies will bet on the wrong approach and fail, and there are also a lot of companies vastly underestimating how much technical knowledge is required to make ai reliable for production and are going to fail because they don't have the right skills.
The only way it won't happen is if the VCs are smarter than last time and make fewer bad bets. And that's a big fucking if.
Also, a lot of the ideas that failed in the dot com bubble weren't actually bad ideas, they were just too early and the tech wasn't there to support them. There were delivery apps for example in the early internet days, but the distribution tech didn't exist yet. It took smart phones to make it viable. The same mistakes are ripe to happen with ai too.
Then there's the companies that have good ideas and just under estimate the work needed to make it work. That's going to happen a bunch with ai because prompts make it very easy to come up with a prototype, but making it reliable takes seriously good engineering chops to deal with all the times ai acts unpredictably.
I'd like some samples of that. A company attempting something transformative back then that may or may not work that didn't work. I was working for a company that hooked 'promising' companies up with investors, no shit, that was our whole business plan, we redress your site in flash, put some video/sound effects in, and help sell you to someone with money looking to buy into the next google . Everything that was 'throwing things at the wall to see what sticks' was a thinly veiled grift for VC. Almost no one was doing anything transformative. The few things that made it (ebay, google, amazon) were using engineers to solve actual problems. Online shopping, Online Auction, Natural language search. These are the same kinds of companies that continue to spring into existence after the crash.
It's the whole point of the bubble. It was a bubble because most of the money was going into pockets not making anything. People were investing in companies that didn't have a viable product and had no intention south of getting bought by a big dog and making a quick buck. There weren't all of a sudden this flood of inventors making new and wonderful things unless you count new and amazing marketing cons.