The AI hype has been non-stop for the last 2 years ever since ChatGPT came out with its 3.0 chat. Since then, there's been an insane amount of investment into AI tech from every direction. There are hundreds of startups, every tech giant has been making investments and companies in between have been putting a lot of money toward it as well. It's not a small amount, either, as the AI hardware costs make Bitcoin mining look like discount bargains.
Yet after two years, what have we to show for it? Maybe some faster image editing on newer phones? Slightly faster answers to questions you would normally ask Google? Some productivity increase among junior programmers? The investment was enormous, as can clearly be seen in NVIDIA's growth, but the results are pretty underwhelming. As with any hyped technology, the possibilities have run past the actual use.
One of the supposed benefits of fiat money is that capital accumulation is unnecessary to create real value. You can build roads, for example, without having to save up for it. What this misses are many obvious drawbacks, but one of them is that there has to be someone that evaluates whether something will create value and create the money out of thin air to fund the project. This is not just inherently centralizing, but also deeply political.
For whatever reason, AI passed this political test and got the blessing of the money printers, which, to a company that sells, shovels like NVIDIA has been great news. But the drawback is that there's bound to be at least some that don't pan out. Maybe some segment of the economy can't use AI profitably, for example. Yet the powers that be, mostly Cantillionaires, have decided that this is worthwhile and have poured insane amounts of money into this bet.
But much like hyped tech of the past, it's looking more and more likely that there's little profit to be made here. Yes, there's some useful things that can be made, but the costs are simply too high right now to justify spending that much. It's a luxury item that mostp people simply don't need, and hence don't want to pay for. AI has become an expensive solution looking for costly problems to solve.
This was always my analysis with another hyped tech: blockchain. It never really made any sense as the cost was too high for what was really just a distributed, very redundant but hard to upgrade database. It, too, couldn't find costly problems to solve, with the exception of one. That, of course being Bitcoin.
What differentiates Bitcoin from AI is that people need Bitcoin. It's its own killer app. AI is not so popular that people will pay for what it costs right now. And that means that most of the investment will be wasted. Like most hyped things in a fiat economy, it's doomed to have significant malinvestment.
A lot of people complain about Bitcoin businesses and how hard it is to make them profitable. In a sense, I get it. You want more people to have steady jobs and so on. But in another sense, I think this is the market speaking. You're not going to get paid from Bitcoiners easily and there's no flood of printed money looking for a place to go. At least there won't be once fiat money has run its course. Building a profitable company is hard and so few meet that mark, especially in a new segment as AI has shown.
So in that way, I'm encouraged, because the companies that survive in Bitcoin will have something truly worthwhile. By contrast, the companies that survive in AI will probably be the ones that get subsidized the longest.