[HN Gopher] AI's Dial-Up Era
___________________________________________________________________
AI's Dial-Up Era
Author : nowflux
Score : 57 points
Date : 2025-11-03 21:01 UTC (1 hours ago)
(HTM) web link (www.wreflection.com)
(TXT) w3m dump (www.wreflection.com)
| arcticbull wrote:
| People tend to equate this to the railroad boom when saying that
| infrastructure spending will yield durable returns into the
| future no matter what.
|
| When the railroad bubble popped we had railroads. Metal and
| sticks, and probably more importantly, rights-of-way.
|
| If this is a bubble, and it pops, basically all the money will
| have been spent on Nvidia GPUs that depreciate to 0 over 4 years.
| All this GPU spending will need to be done again, every 4 years.
|
| Hopefully we at least get some nuclear power plants out of this.
| ares623 wrote:
| The recycling industry will boom. From what demand you ask?
| We'll find out soon enough.
| troupo wrote:
| The boom might not last long enough for western countries to
| pull heads out of their collective asses and ramp up production
| of nuclear plants.
|
| It takes China 5 years now, but they've been ramping up for
| more than 20 years.
| simonw wrote:
| Yeah, the short-lived GPU deprecation cycle does feel _very_
| relevant here.
|
| I'm still a fan of the railroad comparisons though for a few
| additional reasons:
|
| 1. The environmental impact of the railroad buildout was almost
| incomprehensibly large (though back in the 1800s people weren't
| really thinking about that at all.)
|
| 2. A lot of people lost their shirts investing in railroads!
| There were several bubbly crashes. A huge amount of money was
| thrown away.
|
| 3. There was plenty of wasted effort too. It was common for
| competing railroads to build out rails that served the same
| route within miles of each other. One of them might go bust and
| that infrastructure would be wasted.
| robinhoode wrote:
| Railroads need repair too? Not sure if it's every 4 years.
| Also, the trains I take to/from work are super slow because
| there is no money to upgrade.
|
| I think we may not upgrade every 4 years, but instead upgrade
| when the AI models are not meeting our needs AND we have the
| funding & political will to do the upgrade.
|
| Perhaps the singularity is just a sigmoid with the top of the
| curve being the level of capex the economy can withstand.
| rhubarbtree wrote:
| What percentage of data centre build costs are the GPUs vs
| power stations, water cooling plants, buildings, roads,
| network, racks, batteries, power systems, etc
| schwarzrules wrote:
| >> basically all the money will have been spent on Nvidia GPUs
| that depreciate to 0 over 4 years
|
| I agree the depreciation schedule always seems like a real risk
| to the whole financial assumptions these companies/investors
| make, but a question I've wondered: - Will there be an
| unexpected opportunity when all these "useless" GPUs are put
| out to pasture? It just seems like saying a factory will be
| useless because nobody wants to buy an IBM mainframe, but an
| innovative company can repurpose a non-zero part of that
| infrastructure for another use case.
| paxys wrote:
| There's a lot more to infrastructure spending than GPUs.
| Companies are building data centers, cooling systems, power
| plants (including nuclear), laying cables under oceans,
| launching satellites. Bubble or not, all of this will continue
| to be useful for decades in the future.
|
| Heck if nothing else all the new capacity being created today
| translating to ~zero cost storage, CPU/GPU compute and
| networking available to startups in the future after the bubble
| burses may itself lead to a new software revolution. Just think
| of how many good ideas are held back today because deploying
| them at scale is too expensive.
| amluto wrote:
| A bunch of the money is being spent on data centers and their
| associated cooling and power systems and on the power plants
| and infrastructure. Those should have much longer depreciation
| schedules.
| FridgeSeal wrote:
| Imagine the progress we could have made on climate change if
| this money had been funneled into that, instead of making some
| GPU manufacturers obscenely wealthy.
| runarberg wrote:
| The vast majority of the dot-com comparison that I personally see
| are economic, not technological. People (or at least the ones I
| see) are claiming that the bubble mechanics of e.g. circular
| trading and over-investments are similar to the dot-com bubble,
| not that the AI technology is somehow similar the internet (it
| obviously isn't). And to that extent we are in the year 1999 not
| 1995.
|
| When this article are claiming both sides of the debate, I
| believe only one of them are real (the ones hyping up the
| technology). While there are people like me who are pessimistic
| about the technology, we are not in any position of power, and
| our opinion on the matter is basically a side noise. I think a
| much more common (among people with any say in the future of this
| technology) is the believe that this technology is not yet at a
| point which warrants all this investment. There were people who
| said that about the internet in 1999, and they were proven 100%
| correct in the months that followed.
| mjr00 wrote:
| While I mostly agree with the article's premise (that AI will
| cause more software development to happen, not less) I disagree
| with two parts:
|
| 1. the opening premise comparing AI to dial-up internet;
| basically everyone knew the internet would be revolutionary long
| before 1995. Being able to talk to people halfway across the
| world on a BBS? Sending a message to your family on the other
| side of the country and them receiving it instantly? Yeah, it was
| pretty obvious this was transformative. The Krugman quote is an
| extreme, notable outlier, and it gets thrown out around literally
| _every_ new technology, from blockchain to VR headsets to 3DTVs,
| so just like, don 't use it please.
|
| 2. the closing thesis of
|
| > Consider the restaurant owner from earlier who uses AI to
| create custom inventory software that is useful only for them.
| They won't call themselves a software engineer.
|
| The idea that restaurant owners will be writing inventory
| software might make sense if the only challenge of creating
| custom inventory software, or any custom software, was writing
| the code... but it isn't. Software projects don't fail because
| people didn't write enough code.
| solomonb wrote:
| Before I got my first full time software engineering gig (I had
| worked part time briefly years prior) I was working full time
| as a carpenter. We were paying for an expensive online work
| order system. Having some previous experience writing software
| for music in college and a couple /brief/ LAMP stack freelance
| jobs after college I decided to try to write my own work order
| system. It took me like a month and it would never have never
| scaled, was really ugly, and had the absolute minimum number of
| features. I could never had accepted money from someone to use
| it but it did what we needed and we ran with it for several
| years after that.
|
| I was only able to do this because I had some prior programming
| experience but I would imagine that if AI coding tools get a
| bit better they would enable a larger cohort of people to build
| a personal tool like I did.
| Kiro wrote:
| I don't think his quote is that extreme and it was definitely
| not obvious to most people. A common thing you heard even
| around 95 was "I've tried internet but it was nothing special".
| bena wrote:
| "But the fact that some geniuses were laughed at does not imply
| that all who are laughed at are geniuses. They laughed at
| Columbus, they laughed at Fulton, they laughed at the Wright
| brothers. But they also laughed at Bozo the Clown."
|
| Because some notable people dismissed things that wound up having
| profound effect on the world, it does not mean that everything
| dismissed will have a profound effect.
|
| We could just as easily be "peak Laserdisc" as "dial-up
| internet".
| bigwheels wrote:
| _> Benchmark today's AI boom using five gauges:
|
| > 1. Economic strain (investment as a share of GDP)
|
| > 2. Industry strain (capex to revenue ratios)
|
| > 3. Revenue growth trajectories (doubling time)
|
| > 4. Valuation heat (price-to-earnings multiples)
|
| > 5. Funding quality (the resilience of capital sources)
|
| > His analysis shows that AI remains in a demand-led boom rather
| than a bubble, but if two of the five gauges head into red, we
| will be in bubble territory._
|
| This seems like a more quantitative approach than most of "the
| sky is falling", "bubble time!", "circular money!" etc analyses
| commonly found on HN and in the news. Are there other worthwhile
| macro-economic indicators to look at?
|
| It's fascinating how challenging it is meaningfully compare
| current recent events to prior economic cycles such as the y2k
| tech bubble. It seems like it should be easy but AFAICT it barely
| even rhymes.
| rhubarbtree wrote:
| Yep.
|
| Stockmarket capitalisation as a percentage of GDP AKA the
| Buffett indicator.
|
| https://www.longtermtrends.net/market-cap-to-gdp-the-buffett...
|
| Good luck, folks.
| cb321 wrote:
| Besides your chart, another point along these lines is that
| the article cites Azhar claiming multiples are not in bubble
| territory while also mentioning Murati getting essentially
| infinite price multiple. Hmmmm...
| rybosworld wrote:
| How valuable is this metric considering that the biggest
| companies now draw a significant % of revenue from outside
| the U.S.?
|
| I'm sure there are other factors that make this metric not
| great for comparisons with other time periods, e.g.:
|
| - rates
|
| - accounting differences
| dude250711 wrote:
| _> Consider the restaurant owner from earlier who uses AI to
| create custom inventory software that is useful only for them._
|
| That is the real dial-up thinking.
|
| Couldn't AI like _be_ their custom inventory software?
|
| Codex and Claud Code should not even exist.
| morkalork wrote:
| "That side of prime rib is totally in the walk-in, just keep
| looking. Trust me, bro"
| ToucanLoucan wrote:
| > Couldn't AI like be their custom inventory software?
|
| Absolutely not. It's inherently a software with a non-zero
| amount of probability in every operation. You'd have a similar
| experience asking an intern to remember your inventory.
|
| Like I enjoy Copilot as a research tool right but at the same
| time, ANYTHING that involves delving into our chat history is
| often wrong. I own three vehicles, for example, and it cannot
| for it's very life remember the year, make and model of them.
| Like they're there, but they're constantly getting switched
| around in the buffer. And once I started positing questions
| about friend's vehicles that only got worse.
| dude250711 wrote:
| But you should be able to say "remember this well" and AI
| would know it needs a reliable database instead of relying on
| its LLM cache or whatever. Could it not just spin up Postgres
| in some Codex Cloud like a human developer would? Not today
| but in a few years?
| saltysalt wrote:
| Not sure the dial-up analogy fits, instead I tend to think we are
| in the mainframe period of AI, with large centralised computing
| models that are so big and expensive to host, only a few
| corporations can afford to do so. We rent a computing timeshare
| from them (tokens = punch cards).
|
| I look forward to the "personal computing" period, with small
| models distributed everywhere...
| runarberg wrote:
| I actually think we are much closer to the sneaker era of
| shoes, or the monorail era of public transit.
| onlyrealcuzzo wrote:
| Don't we already have small models highly distributed?
| saltysalt wrote:
| We do, but the vast majority of users interact with
| centralised models from Open AI, Google Gemini, Grok...
| onlyrealcuzzo wrote:
| I'm not sure we can look forward to self-hosted models ever
| being mainstream.
|
| Like 50% of internet users are already interacting with one
| of these daily.
|
| You usually only change your habit when something is
| substantially better.
|
| I don't know how free versions are going to be smaller, run
| on commodity hardware, take up trivial space and ram etc,
| AND be substantially better
| saltysalt wrote:
| You make a fair point, I'm just hoping this will happen,
| but not confident either to be frank.
| paxys wrote:
| Why would companies sell you the golden goose when they can
| instead sell you an egg every day?
| saltysalt wrote:
| Exactly! It's a rent-seeking model.
| echelon wrote:
| > I look forward to the "personal computing" period, with
| small models distributed everywhere...
|
| Like the web, which worked out great?
|
| Our Internet is largely centralized platforms. Built on
| technology controlled by trillion dollar titans.
|
| Google somehow got the lion share of browser usage and is
| now dictating the direction of web tech, including the
| removal of adblock. The URL bar defaults to Google search,
| where the top results are paid ads.
|
| Your typical everyday person uses their default, locked
| down iPhone or Android to consume Google or Apple platform
| products. They then communicate with their friends over
| Meta platforms, Reddit, or Discord.
|
| The decentralized web could never outrun money. It's
| difficult to out-engineer hundreds of thousands of the most
| talented, most highly paid engineers that are working to
| create these silos.
| saltysalt wrote:
| I agree man, it's depressing.
| cyanydeez wrote:
| I think we are in the dotcom boom era where investment is
| circular and the cash investments all depend on the idea that
| growth is infinite.
|
| Just a bunch of billionaires jockeying for not being poor.
| gowld wrote:
| We are also in the mainframe period of computing, with large
| centralised cloud services.
| wewewedxfgdf wrote:
| Most of the big services seem to waste so much time clunking
| through updating and editing files.
|
| I'm no expert but I can't help feeling there's lots of things
| they could be doing vastly better in this regard - presumably
| there is lots to do and they will get around to it.
| righthand wrote:
| More like AI's Diaper-Up Era aka AI's Analogy Era to Mask It's
| Shortcomings
| indigodaddy wrote:
| Funny how this guy thinks he knows exactly what's up with AI, and
| how "others" are "partly right and wrong." Takes a bit of hubris
| to be so confident. I certainly don't have the hubris to think I
| know exactly how it's all going to go down.
| fragmede wrote:
| But do you have the audacity to be wrong?
___________________________________________________________________
(page generated 2025-11-03 23:00 UTC)