this post was submitted on 20 May 2026
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It can't not hallucinate. It's just predicting (not even selecting) next tokens. It doesn't know what it knows and what it doesn't know. It can't introspect. It just gives probabilities for all possible tokens in it's vocabulary based on the context window and the inference engine selects the next one (based on it's settings). Without having the correct answer in the context window it can just make a prediction based on it's (fixed) neutral net parameters and these are severely limited, even for big models. What I mean is, they basically "learned" the whole Internet and compressed the whole thing into some hundred billion or a few trillion parameters. That's an insane compression ratio. This compression is lossy. For niece information and the results are similar to the "unimportant" details in highly compressed JPGs, you can make out the general image but fine details are just a mush. The LLM itself doesn't know this, it just gives wrong predictions.
For what it does I think the result is extremely impressive but the way it works is severely limited.
From what I understand from what it told me about itself, it can be wrangled further. That is what the paid for versions are. The info can be sandboxed and then other agents verify the correctness of the info from very specific, known to be solid, sources. This is very expensive and still not fool proof. Am I wrong in thinking this bubble is going to pop hard?
The models and methods are improving. Especially through tool use (Internet search, MCP, using programming languages) the model output improves a lot. Reasoning models are allowed to admit mistakes (during thinking) "wait, that's wrong" (in normal conversation they will never say that if you don't point it at the mistake). Otherwise they basically predict tokens, the inference engine selects one and they go with what was selected.
It's a bit like you remember some wrong information (Mandela effect), you're confident it's correct so you don't double check and go with it. They usually don't even know how confident they are, they have no introspection.
In software development scenarios LLMs, due to their high "compression", often hallucinate (misremember) methods and parameters that don't exist in APIs or in different APIs or they don't know about new versions of the API. Many of those errors are catched when the code doesn't compile or unit tests fail but some of them stay (e.g. if the model created the unit tests and they don't test what they're supposed to test).
Also a bit like humans the models often don't have the whole codebase in the context so they make assumptions about the rest they. Since they have no introspection they often don't double check if those assumptions are correct.
In case of frontend design they often can't "see" the output or at least not in the way way we do. They don't really know if something looks "good" or not (depending on their training).
Verification with other agents can help but fundamentally these agents have the same issues. It's a workaround.
I'm actually not sure if the bubble will pop. I believe LLMs can be useful in some fields but they're but the path to AGI. They're also way too resource intensive and used in a lot of situations where it's dangerous or doesn't make sense.
However, it's not that the AI researchers don't know about the limitations. They trying to work around the issues of the LLMs with some success for years now and they kind of have to because they kind of work and bring publicity. Behind the scenes the AI craze also brought money for research into different directions with other fundamentals. E.g. JEPA, world models, diffusion models, logic based models, energy based models, small recursive models and a lot of optimizations to make things faster and cheaper to compute.
The bubble could pop if one of the major companies does something stupid and their stock tanks but as long money is pumped in there, there is also actually progress in new fundamentals and if they are developed before the bubble popped we might get "real" AI or AGI.
I was trying to see what AI says this time about the bubble and it was kind of interesting. This is from Gemini btw:
Understanding questions and summarizing information is a field where LLMs are quite good at. If they actually look up the sources and "read" the websites they are often able to give good answers. If they don't use tools and just answer from what they "remember", the information often contains hallucinations.
So from a user perspective I think search will get better for specific questions.
However, traffic to websites and all the things the LLMs omits are lost. If the LLMs gives you the answer you don't learn about the author of the information, the design of the website, the nuanced and maybe thoughtful story the author built around the information and all the other stuff the author put there.
If you wan to know if a bubble pop just look at the fundamentals. Yes, I know, especially during bubbles people tell you that fundamentals don't matter but they always win in the end. The thing is that you cannot bet on them because the market can always stay longer irrational than you can stay liquid. Eventually however it always corrects on the fundamentals again. Those can change of course over time but looking at the insane amounts of money flowing into data centers with no possible way of recovering that cost, I think the picture is clear. We also have wonderful highly circular money flows that to a large extend do not even exist but are all taken for full.
The only question is when it implodes. Within a year, within three? Who knows.
It's definitely going to pop hard, because those "verifying agents" are just more models computing correlation with sources, not actually verifying anything.