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this post was submitted on 21 Jul 2025
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Bigger players will obviously survive, and that was the case during dotCom bubble as well. However, there are tons of small startups funded by VC money that are grifting all kinds of AI based solutions right now. That's where the actual bubble is. Also, it's not at all clear that the business model the large players have is going to make sense long term. Google, OpenAI, and Anthropic are all banking on AI as a service business model. However, open source players are rapidly catching up and are now even outperforming them as seen with recent Kimi 2 release https://venturebeat.com/ai/moonshot-ais-kimi-k2-outperforms-gpt-4-in-key-benchmarks-and-its-free/
Chinese companies took a completely different approach to AI, where models are released as open source and treated as a common foundation for building things on top of. I expect that Chinese approach will win in the end because it invites collaboration while amortizing research and development costs. Open models will inevitably be setting the standards globally, making it increasingly harder for closed models to compete.
Ah I see what you mean, yeah basically every AI company that is not developing an actual model is 100% fucked in the long wrong, because their entire business model is essentially "we make a prompt around ChatGPT API calls" which is not sustainable as soon as pricing for APIs starts going way up. I also think that the larger players banking on AI as a service business model is not going to work out for the reasons you mentioned (Deepseek R1 alone, which I can run on like a normal laptop, is already fantastic) BUT even if none of that doesn't work out Google/Facebook/Microsoft/Apple et al. are going to be fine, because their revenue is not actually from AI at all. There's no bubble to pop there.
I agree, the big corps are gonna be fine in the end. They'll probably also gobble up any startups that end up producing genuinely useful stuff.