I’m going to record this prediction now so that it can warm me in the winter months: The AI bubble will burst and the AI bubble will not burst.

The AI bubble will burst. I predict that because I’ve seen it in hype cycles ever since the dot-com era. Astonishing sums of money get spent building infrastructure for massively overvalued companies, and the profits just aren’t there to support it. Later, when the fickle winds of the markets change, the companies that paid for all that infrastructure collapse. But the infrastructure remains. The GPU farms exist now and they’ll still exist when the bubble bursts; they’ll just move to a clean-slate balance sheet. The financial circle of life continues. As long as you weren’t invested in those companies, it’s probably a good thing - you get to benefit from the roads someone else built and paid for.

Meanwhile, the AI bubble will not burst. Financial shenanigans aside, AI is here to stay. Who owns the models, who trained the models, which computers they run on — that’s a shell game that’s going to be played for a few years yet. But the technology itself? That’s here to stay. It’s changed things in a way that’s not going to be undone. Shut down Claude and half the people I know will just write spec files until it’s back up. Pandora’s box is open.

In short, I predict AI will sink and swim. Since the combustion engine rocked the world, the car makers changed, fortunes rose and fell, but none of it sent us back to riding horses.