AI Bubble burst coming sooner?
this post was submitted on 07 Jun 2026
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Nice try, I ain't gonna pay anyway
Exactly, I just keep using the free plan and when I finish the amount for the day I just switch to another service
This is why IMO blitz scaling is dumb when your service is a commodity. I'm not any more loyal to Uber than Skip. If more investor money goes into making a cheaper meal or ride on Skip I use that. Consumers are mercenaries about that stuff.
The "blitz" part of blitz scaling assumes your customers can't move.
Exactly. And LLMs don't have a way to keep you inside of their walled garden; if any, I prefer starting from a blank slate every time I ask something.
I can't imagine paying for AI when the open source tools have made it so easy to set up a model locally.
Don't be daft. The vast majority of people don't have the knowledge or resources to set that up locally.
You're right if we're talking about the entire population of Earth. With these local models though, other people have already done all the hard stuff. Anyone with an RTX card and just a minimum level of patience can get going.
Minimum for local models is 12gb imo. There are several "rtx" cards that have 8gb. Also, why nvidia? AMD works well too. My previous point stands, still. If you don't already have the hw, buying a pc today is very expensive. I don't know if you go out much but it ain't pretty out there. People arrn't precisely swimming in cash.
Also, patience isn't the only requirement. Keep in mind that some people struggle to even install a program.
Easy to set up, but still needs a 15k $ graphics card and electricity bill. The price you pay openai/anthropic is much cheaper than that for that quality of model.
Sure, you can setup a small model on a consumer graphics card, but the output will be considerably worse and the processing speed considerably lower.
For 240€/year you got a subscription to anthropic which will happily ingest a whole repository and process it in about one minute. No matter what latest model GPU you installed on your computer, you won't be able to do that.
Sure, this guy was able to run a 26B model on an old CPU: https://point.free/blog/gemma-4-on-a-2016-xeon/
But that was not easy at all and the speed you get is definitely not the same as the one provided for a very cheap price.
There is a middle ground. Crypto farmers have transitioned into running AI workloads for money. There are things sort of like folding@home but you can let people use your GPU and you earn tokens which are used to buy compute or sold to people who want to buy compute on the network. So you can setup a bigass open source model for private on demand use it's still not cheap but a lot closer to reality for a lot of people than a 15k initial purchase.
If you were paying the real price it would be 2 grand a year though. And in 5 years that 15k graphics card will be $200 and sip on electricity by comparison.
A100 is 6 years old and is now sold at over 10k $. If you were paying a higher price it could be cheaper to buy the card, since the prices are low that is not the case.
I wonder how much they spend for every $0 I pay them.
$1000 I would guess. They are just burning money at this point.
I mean, this is no different than Walmart making prices low until other businesses die out and then raising them.
It is no different than police shoving all the homeless people and drug addicts into one area of town to crash the property prices, and then evicting them once developers buy everything for cheap.
They're purposely operating at a loss in the expectation that they can get ingrained into a ton of workflows, and then gouge everyone absolutely to death while also worsening the quality of the service to make it cheaper for them to run.
If it weren't so horrible for the environment, I'd kind of like it, because all the dumbass executives that are signing up for this are going to get exactly what they deserve. You'd think they'd recognize a scheme when they see one.
My CEO (whom I don't consider a particularly good or bad CEO) spent a day playing with AI then when asked if he'd sign the company up with the service he literally laughed in their faces and said it's useless. I was honestly shocked because he's totally into buzzword and popular crap. Gained a lot of respect for him that day.
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Trust me bro we're so close to profitability bro, just need this IPO to secure funding one last time bro then we'll be profitable bro I swear.
I wish that was inversely proportional. The less I pay, somehow it costs them more money.
Yes, that's called a "marketing budget"
Oh come on bubble, why won't you crash already?
Now, I'm no MBA, but that seems like a bad business plan...
What is the actual “cost” after they buy the hardware, is that $1000 really pure power usage cost?
The problem is that the hardware has a 5 or 6 year depreciation schedule on paper, but NVIDIA keeps saying that their next generation chip will be twice as good as their last chip so there is a FOMO schedule of like every two years.
Would be nice to see that used hardware for sale rather than it being junked as a writeoff.
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Honestly Google is likely to beat openAI and Anthropic as things are.
OpenAI and Anthropic have to buy/rent their hardware from Nvidia, while Google is making their own TPU hardware. Google's hardware costs on AI is way lower, every dollar they spend on it goes a lot farther.
And unlike the other two, they're already a profitable company. They're making record profits right now. They don't have a desperate need to figure out how to make back billions on their AI models, they can just keep offering Gemini at a comparatively cheap price and wait for anthropic and open AI to bankrupt themselves.
I guess you missed this story from last week: Google To Pay SpaceX $920 Million Per Month For Massive AI Compute Power
That's definitely costing them more than running it on their own hardware, but it doesn't mean AI is costing them more than the AI startups. Anthropic for example is already paying SpaceX 1.25 Billion a month for compute, and has agreed to pay Google 200Billion oflcer the next 5 years for access to Google's compute and TPU chips.
Google's deal with xAI specifically lets them terminate the deal with 90 days notice after the end of the year. Google is also investing heavily in building new data centers with their hardware. I'm assuming this deal means they've eclipsed their current TPU capacity, and are just looking for a short term bandaid until they can catch up with their new constructions.
Anthropic is doing the same too. SpaceX over here providing the shovels and pans for the modern day gold rush, sheesh.
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Good thing I don't personally pay them anything
Oh, you are going to pay. The bubble is going to fuck us all quite thoroughly.
Exactly, these companies will keep leveraging more and more because they know the govt will step in and print whatever number of trillions of dollars needed to fix the accounting.
Of course it is, it’s essentially a scam. They just need enough humans to keep investing until they check out and run with a bailout.
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It's gonna come crashing down pretty soon. It's gonna hurt all of us. It won't hurt the people responsible nearly enough.
reminder than during 2019 there were streaming services popping left and right, all showing tremendous growth because they started from zero, and articles were about how bad Netflix was doing due to having practically no growth compared with the competition (they already had a massive subscriber base). Twist? Netflix was the only streaming service that was actually making a profit, the rest were a massive loss but big growth.
Needless to say most of those streaming services died; who remembers DC streaming service, or Yahoo's? While Netflix is basically as stong as ever, despite the prevalent enshitification happening through the whole industry.
Point of the story? shareholders don't care about stable profitable business, only cancerous growth. AI is like that, zero profits, ton of cost, but as long as they show growth the shareholders are happy, regardless of how cooked the books are.
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no wonder why OpenAI is losing alot of money.
They'll never earn
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