If the bubble really pops how can that affect local AI models?

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ByronScottJones@reddit

I've yet to see evidence that there's truly an AI "bubble". If there is one, it's likely to come about because they develop a much more efficient way to do the initial training. That would hit Nvidia and other companies doing high end processors, but would be a net positive for the AI companies and users.

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Icy-Pay7479@reddit

This is what I see. A lot of that 4+ trillion floods into one or more competitors, hardware costs balance, the market cap for hardware deflates a bit due to price competition.

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Rare-Site@reddit

There is absolutely no bubble here. The development of neural networks isn’t a hype cycle, it’s a paradigm shift that’s never going to stop. The human brain is still, from our current perspective, the best computational system in the known universe. But for the first time, we’ve built chips capable of running artificial networks that somewhat mirror its structure. They’re smaller, slower, and far less efficient, yet already unbelievably useful. So why would anyone think this progress is about to plateau or reverse? It won’t. It will never stop. Never. We’ve crossed the point of no return, the incentives, the compute, the curiosity…

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ellenhp@reddit

You are aware that neural networks are not new, right? The bubble has already popped once.

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TipIcy4319@reddit

Most of these companies are still dumping money into this thing and they don't know if they will ever see a return. That's why OpenAI is desperate. They are even bowing to gooners after years of kicking them out.

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journalofassociation@reddit

It's possible to have a bubble around a paradigm shift. When the dot com bubble burst, we didn't just stop using the Internet. It just culled the herd of all the moronic businesses that were ill-conceived or simply not economically viable.

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Rare-Site@reddit

Totally fair point, but the key difference is what’s actually compounding. Most bubbles ride on speculation about external value, land, stocks, commodities, etc. AI’s “asset” is the tech itself, and that tech self-reinforces. Every improvement in models, hardware, data efficiency, or tooling instantly boosts the next generation. So yeah, maybe the valuations are overheated. That’ll correct, like always. But the underlying curve doesn’t flatten afterward, it steepens. We’ve never had a feedback loop this tight between discovery, open-source, and deployment. That’s why this isn’t a classic bubble, it’s a new kind of acceleration.

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MaybeTheDoctor@reddit

None of the base models are locally trained, so local LLM will eventually have stale models, like taking to a person with dementia who only remember things from 50 years ago.

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WEREWOLF_BX13@reddit (OP)

That sounds like c.ai and gpt 1/2 lol. But that was when they didn't even knew what they were doing, now there's 4B models that don't suck as bad as these big ones were back in time

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MaybeTheDoctor@reddit

I’m not sure that is accurate - our knowledge evolves all the time, and there are subjects we know very little about today, nano technology and the like. Models are trained on data like Wikipedia but if the article on the subject is not available today the ai can’t be trained. 50 years down the road and AIs stuck in 2025 are going look very outdated when it cannot answer with knowledge available in year 2075

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Aromatic-Low-4578@reddit

Hopefully compute and GPUs get cheaper once everyone realizes they aren't money printers.

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SlowFail2433@reddit

The bubble popping will produce a truly enormous surplus of A100s and H100s, meanwhile power costs will likely remain similar to now or lower (as more power comes online.) This surplus of compute while demand is blunted will result in… …?… …something

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bitfed@reddit

Why wont most of these types just switch to mining crypto to cut their losses rather than flooding the market at affordable prices? HDD prices however, it would be nice to see those stop inflating.

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SlowFail2433@reddit

They will AI bubble popping will cause a temporary crypto bubble on the way down (because of switching GPU resources)

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No_Afternoon_4260@reddit

Shouldn't this just lower the fees for the miners really? And any ways crypto are mined by asics not gpu..

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SlowFail2433@reddit

Not necessarily because both demand and supply will shift. Regarding ASICs, new coins are minted all the time with different mechanisms that utilise different hardware

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Mediocre-Waltz6792@reddit

which are the high paying one? After Eth the profits have been pretty bad for GPUs.

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SlowFail2433@reddit

Not sure sorry I only follow crypto from afar these days as it feels like AI is a better use of time

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Mediocre-Waltz6792@reddit

Totally people are not making good money from mining. Yes you can mine but realistically a person will spend more on electric then they wilk make.

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cornucopea@reddit

Why temporary? When those renowned figureheads kept chanting bitcoin will be $1M price someday, I always wonder how, now it all starts to make sense. If you wonder what gives Altman the confidence to sign circular deals to finance gpu mass production, this will explain well.

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koffieschotel@reddit

Can you give some reasons why you think there will be a surpluss of A/H100s and why the power costs will stay the same/be lower?

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Ylsid@reddit

I have a weird theory Blockchain will see use as verifying human created content post-crash and surplus compute being used for it is the start

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One-Employment3759@reddit

...innovation, it will result in innovation

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j_osb@reddit

Yup. We'd see less companies throwing out models on a monthly basis, but we'd also see more people be able to do much more with finetunes and whatnot.

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SlowFail2433@reddit

Sounds better than where we are right now TBH The internet was also kinda trashy prior to the internet bubble pop. It was also harder to get reliably good Tulips.

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Liringlass@reddit

One thing to keep in mind is that after the internet bubble internet did not go away. Cheaper compute would be great and it might happen temporarily. But AI isn’t going away and as adoption increases so will the consumption worldwide. Use cases for companies and ordinary people do exist. The bubble is the insane valuations of companies that don’t make money. But that’s how startups have been operating for a while I believe, in an unsustainable business model that not only doesn’t make sense but also forces everyone to follow the same (you can’t compete with free or barely free services other than by being free or barely free).

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cornucopea@reddit

This is different from the internet bubble. Back then, a 56K modem and $10 monthly fee were able the enable internet widely spread in consumer home/office. It's the content format slowly become richer and fanciser as bandwidth avialble grew bigger and cheaper, then later gave rise to ecommerce, netflix etc. The hyperlink and browser was a instant boom since the very beginning. Now for AI, the minimum bar to have a useful model is a lot higher than the current consumer affordability. You'd need 4x3090 or 2x5090 to barely run a offgrid model for practical uses. Or go with cloud where a $20 monthly is hardly justified for the mass market. On top of that, there is a 50% of population simply taking a polical anti-AI stand, thanks to all the AGI marketing BS.

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Liringlass@reddit

I disagree, the minimum bar to a useful model is USD 0.00. Most people get a lot of value our of widespread chat gpt I have claude pro and it's not a super huge amount either. Hardware is expensive, but the AI bubble and the startup model have made access to AI easy and (too) cheap.

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Southern-Chain-6485@reddit

But once the bubble burts, there won't be free chat gpt anymore

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Liringlass@reddit

I can’t know for sure but I would assume there will still be something for free. If open AI leaves the space another will take its spot. Data privacy might get even worse than it already is though. It actually sounds dangerous considering how many people seem to use ai as confident / friend / more.

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Southern-Chain-6485@reddit

Once the bubble bursts, companies will need to turn a profit. So unless chatbots can be profitable with ads (which I don't think they would), then they'll have to be subscription based, like Netflix and the rest.

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Liringlass@reddit

Well google (search, drive, OS, etc), facebook, TikTok, etc are all free and have huge income. AI chats have access to lots of personal information. I would say that’s where the money might go. Subscription will exist too for advanced usage and companies. That’s speculation obviously and i could be wrong. The companies that will close are those that don’t have the money. If you have already raised your billion and have the time to wait for the competition to go out of business you’ll be ok, even if you’re loosing money. I could be wrong of course.

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Southern-Chain-6485@reddit

Inference costs are much higher than the operating costs google and social media have. And if they are lowered enough, local ai inference becomes more and more possible in the computers users already own.

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Southern-Chain-6485@reddit

Once the bubble bursts, companies will need to turn a profit. So unless chatbots can be profitable with ads (which I don't think they would), then they'll have to be subscription based, like Netflix and the rest.

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CloudyLiquidPrism@reddit

Qwen3-Coder-30B I use professionally with no issues, requires nowhere near that amount of horsepower. Some 8B models have plenty of use too.

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cornucopea@reddit

Sure, I run coder 30B too with a 2x3090 setup as a hobbyist. For business operation, at least you would need to support concurrent requests, vLLM sort and enough context. There are many posts in this sub where people suggested qwen3 235b, or GLM etc., not q4 though for serious coding. Besides, coding is probably the only nearly accepted business adoption at this point, though people are still debating.

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Liringlass@reddit

GLM Air is just incredible yeah. That's where i would go if I could invest into hardware at work. Might happen some day.

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habitual_viking@reddit

You can run useful models on simpler hardware than that. But you can’t train models. And hardware is going to be cheap again. Right now nvidia is printing money because of FOMO, but when everyone and their dog realises you can’t charge people $10 per chat message nvidia will be forced to stop charging 6-7 times what the hardware is worth. And if intel can stop killing themselves they might actually become a worthy cheap alternative to nvidia.

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mycall@reddit

Or change how the algorithm works so it could have continuous training based on a world wide network of PCs.

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Aromatic-Low-4578@reddit

We would need much faster internet for that to be viable.

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One-Employment3759@reddit

I don't think we would - since humanity is somehow able to use the internet to coordinate our brains and activities, why not agents? Humans use language/media, which is obviously more compactly encoded than neuron structure and activitions. A latent representation update should be possible. Actually, that's similar to what a LoRA is anyhow!

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Aromatic-Low-4578@reddit

Because training requires a massive amount of very fast data transfer. There's a reason everyone prioritizes memory bandwidth now. Not sure what your lora comment means.

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One-Employment3759@reddit

LoRA are a packed representation of modifications representing a concept without a full copy of the weights. There are numerous distributed training protocols. Sure they are slower than fast interconnects but are still a path forward.

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Aromatic-Low-4578@reddit

I know what a lora is. I've trained many. The point still stands, we are a long way from getting the kind of throughput we need to have truly distributed training via the public internet.

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One-Employment3759@reddit

And yet the projects exist already.

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Trotskyist@reddit

There are massive limitations to what can be accomplished with LoRA

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One-Employment3759@reddit

It was an example of compressing a modification to the latent space, I'm certainly not suggesting using it for distributed training.

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Aromatic-Low-4578@reddit

Totally, not saying no one has tried, just that it's far from being a viable solution for most use cases. Anyone serious about training is using gpus local to the training process.

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mycall@reddit

Maybe but it seems to me just an engineering problem for a different way to solve the same goal -- data, information and knowledge distribution. Here is an idea: combine P2P collaborative inference (Petals), decentralized training/averaging (Hivemind/OpenDiLoCo), federated optimization with secure aggregation, and sparse MoE routing. Millions of consumer machines could contribute capacity while remaining robust. Adding zkML for verifiable execution and incentive mechanisms for contribution quality further hardens the system against adversaries and sustains participation for all of the nodes.

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Aromatic-Low-4578@reddit

Still runs into the problem of transferring the massive amounts of data quickly.

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mycall@reddit

Not necessarily if local SLMs and MoE routing is specialized before it is needed (think domain specific languages and knowledge), also near-neighbor hops to rare node clusters (similar to rare chunks first in bittorrent). Anyways, what I am saying is it doesn't yet exist but I don't see why it couldn't.

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Aromatic-Low-4578@reddit

Yeah, I think for inference it may be possible sooner, especially because of the gains from parallel inference but training is likely a ways off.

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mycall@reddit

That's true. The whole training data poisoning problem would need to be solved before even starting.

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Pvt_Twinkietoes@reddit

GPU will get cheaper, but there won't be anymore big model releases.

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Trotskyist@reddit

They also might not get cheaper. A precipitating event for the AI bubble popping, for example, could be the invasion of Taiwan.

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Aromatic-Low-4578@reddit

I dunno, I'm hopeful that cheaper GPUs means more smaller startups releasing more niche models. I'm personally someone who would like to move in that direction but at this point it's hard to justify the compute costs for what is essentially a hobby. You're probably correct about large models though. I think they'll settle into a slower more sustainable release cycle.

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One-Employment3759@reddit

Yup, looking forward to it so we can start going back to normal hardware prices and maybe pick up a few deals as well. Ready for the bubble to pop so we can just get on with the real AI research.

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FullOf_Bad_Ideas@reddit

Normal AI research is still going on. World is a big place, many people are still working on other AI not related to current popular things.

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One-Employment3759@reddit

Yeah, but due to financial incentives, hardware and talent are focused on what the bubble wants.

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FullOf_Bad_Ideas@reddit

More talent going to AI overall, less to physics, math, normal computer science. Protein folding models are still developed, and they're not based on LLMs most of the time.

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Aromatic-Low-4578@reddit

Totally, can't wait.

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jrherita@reddit

This is a good answer -- even if availability and development of local models slows down, it'll be possible to run more expansive local model for the same $$ after the bubble bursts.. so we'll get benefits for a couple of years that way.

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SlowFail2433@reddit

Ye it depends on if a focus on inference is good or not

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Minute-Flan13@reddit

Hardware will, hopefully, get more powerful, cheaper, and energy efficient. I think our ambitions with the technology don't really align with our hardware capabilities. Once that is corrected, we will be back playing with models in short order. I suppose it's like where CS was before the Personal computer. You needed large, expensive labs to write even simple programs.

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Peterianer@reddit

Can't wait to grab a 10 pice box of surplus H100s from my lunch money

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Tight-Requirement-15@reddit

The people who keep saying this is a bubble have very little understanding of AI and the infrastructure. GPUs are real things built, data centers are being built, there is a growing demand every day, seriously look at any subreddit like r/claudeAI when Anthropic does something like new usage limits. People’s (and by extension business’s) expectations just keep rising. The early 2023 era ChatGPT that can only say a few sentences before hallucinating and forgetting everything before won’t work today. The dot com bubble was built on genuinely nothing leading to the crash

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HideLord@reddit

Just because there is demand and assets does not mean there is no bubble. Houses and the need for houses were very real in 2008 as well. Valuation and leverage are the problem.

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rulerofthehell@reddit

No the dot com bubble was not built on nothing, maybe you have very little knowledge of tech

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floridianfisher@reddit

The bubble isn’t going to pop. Computers can think. That’s the biggest thing that has ever happened.

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05032-MendicantBias@reddit

Tencent released Hunyuan 3D not to monetize it, but to make game developers more productive, and profit from more better games being made. I think this is what we'll see after the bubble pop. Companies making products that leverage AI assist to be useful, and not selling shovels.

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ravage382@reddit

I'm guessing there will be less models released to the public via hugging face once investors decide the bubble has popped. No incentive for companies to put it out if investors aren't looking favorably on it. This could be the golden age of open models.

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SlowFail2433@reddit

Teams like the big Qwenneth team might survive a bubble pop TBH and continue to deliver models.

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InevitableWay6104@reddit

i doubt they'd still publish open weight models tho

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Daniel_H212@reddit

Yeah the Qwen team and other teams that are part of companies that don't specialize in AI can be subsidized by the parent company for PR purposes. It's a good look for a tech giant that they can stay at the forefront of a technology, even if it doesn't make money.

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bfume@reddit

fewer

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emprahsFury@reddit

Convincing people to hate grammar was one of the most successful anti-education plots of the modern century.

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cant-find-user-name@reddit

I used to be the kinda person who corrected people's grammar, and IMO there's no plot here or anything. People just hate being corrected and feeling like they are wrong or lesser. That's all it is

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Cruxius@reddit

yes fwau?

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ravage382@reddit

Yes yes. It was fewer models or less released to the public. My brain split the difference.

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One-Employment3759@reddit

morer

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mpasila@reddit

But then we will probably get more community trained models that won't have as much filtering done to them which imo is better than highly filtered current models with ton of synthetic slop mixed in with math/code only datasets.

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Prudent-Ad4509@reddit

There is a huge strategic incentive to develop independent domestic semiconductor manufacturing processes and the software, with players including all major power houses, starting with US and China. This works best when there is a demand for bulk production of various chips, especially GPUs. "Free" models increase such demand, so they won't go away if the people at the wheel have half a brain and investors might receive some unwanted attention from the government if they decide not to play ball. This is an entirely separate process from the process of improving models themselves. The current architecture might hit a ceiling, but things will likely simply change up once again like they did when moe models started to become popular instead of old dense ones. The demand for silicon has to be maintained no matter what, in order to fuel economics of scale.

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ZucchiniMore3450@reddit

Bubble us real and must pop at some point. Everyone knows that, but there is few percent of chance that something will happen and maje AI really useful, and they want to be there just in case. If that doesn't happen before they decided to cut the losses and bubble pops I think some will still exist since we have use cases, but much less development will go into LLMs since it may hit the wall. We will have cheap hardware and other options will be exolored. It's a win-win situation. AGI will not happen without something completely new. Transformers are not completely new idea, just buildup on previous plus hardware got to the point it is possible. We don't even know what AGI is, let alone idea how to make it.

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AlShadi@reddit

The test is to see how many AI commercials during the superbowl, and the % that have dancing animals.

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a_beautiful_rhind@reddit

You basically answered your own question. No more free models released. Huggingface also won't be so eager to host them. Otherwise things continue on as normal.

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Michaeli_Starky@reddit

There is no bubble outside of people having very vague unrestrained ideas of generative AI, what it is and what it isn't. But AI is not going anywhere. It's a part of our life and it can be really beneficial.

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Gopher246@reddit

You're conflating the tech of AI with the economy of AI. The bubble popping doesn't mean AI dissappears and no one serious is suggesting that. Housing didn't disappear when that bubble popped, nor did the Internet, nor did railroads, and nor did poppies. What's being said is that economics of it are overstretched and over heated. Its hard to deny this is the case unless you bury your head in the sand.

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One-Employment3759@reddit

Yup, none of the economics make sense, even if you are extremely generous with future revenue predictions. It's still nonsense. Global economy would need to grow 2000% in 5 years. Bubble. We maybe have another 12 months of self-delusion until crunch time.

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Pvt_Twinkietoes@reddit

How did you get the "20x in 5 years" figure?

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Rare-Site@reddit

You’re mixing up markets with momentum. Housing, railroads, dot-coms, those hit physical or logistical limits. AI doesn’t. Every breakthrough fuels the next. It’s not finite, it’s compounding. Sure, the economy might cool off. But the tech? That curve’s still going vertical.

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dkarlovi@reddit

> There is no bubble There's people in the leading postings of this wave (including Altman) saying it's a bubble. Saying "there's is no bubble" over them seems like hopium.

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Michaeli_Starky@reddit

Absolutely. Some people prefer to live in denial until reality hits their heads with a sledgehammer.

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SporksInjected@reddit

The funding for open source frontier models will be gone

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Skagganauk@reddit

I think local LLMs are what’s going to make the bubble pop. Running huge data centres is analogous to back in the day when people were logging onto mainframes from terminals.

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Automatic-Newt7992@reddit

It will only accelerate abuse of local models. A generation thinks Instagram is the future and is easy money. Now, they can bot and make it easier. If the bubble pops, everyone will rush to make a quick buck. It will eventually be regulated.

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usernameplshere@reddit

I wouldn't mind if AI gets stuck at the level it is right now.

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Alarmed_Wind_4035@reddit

I will be glad if it happens we are not ready for it.

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Secure_Reflection409@reddit

There is no bubble. The value is real. Nvidia has been providing relentless value for donkeys years. They might well be passing a few quid amongst each other but it doesn't change the fundamentals. The shit that's possible now is revolutionary.

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Working-Magician-823@reddit

AI companies are not making money, happens in startups, not a big deal AI companies are in an investment loop (giving each other the same money), is it sustainable? Unknown, this one is the biggest in human history, so??? Who knows If it pops will it affect China? Unlikely, they are providing AI for free Will world governments stop investing in AI? Very unlikely, the one that is left behind will be overpowered So, never happened before in human history, regardless of investment loops, AI push will continue

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DataGOGO@reddit

See the dot.com bubble.

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Working-Magician-823@reddit

I lived it, I prepared, I survived it :) I am working in IT since 1995 This time is a bubble, the cycler investment (we give each other the same money is very dangerous), AI also is showing limits, and AI companies are burning cash. But the wars did not finish, even if they stop weapon manufacturing will not, and it needs AI massively. And when did you pay for a DeepSeek AI? it is all there for free to install on your machine if you want, so the bubble burst or not, they are not affected. It is really something that did not happen before, and very interesting to watch developing.

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DataGOGO@reddit

Agreed

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dobkeratops@reddit

i am afraid that companies doing multi million $ training runs and giving the results away could be an anomaly of the investment bubble that could dry up as they actually have to recoup, but at least we have those weights to build on with loras , finetunes, frankensteins , forever. Some models have been extended into multi-modals by mashing in a projection layer. Hopefully now that people have seen what is possible, there will be more efforts for independents to pool resources aswell .. we must master 'federated training' if we dont want to be at the mercy of a few superpower companies. as for 'actual AGI' , I'm not sure that term matters SO much, current AI with finetunes and combined with specific code can still change the world. if GPU power froze now, and there were no new foundation models, we still might extend capabilities every year by collecting new data, training new projection layers for narrow nets for new input/output modalities.

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TipIcy4319@reddit

Local models will still be available for download. Companies may stop making new ones, but we would still have great tools at our disposal.

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richardbaxter@reddit

I think the cloud providers are going to make money - by getting everyone so hooked they can't manage without it. $3000 monthly api / desktop sub. They're making a loss now and the pressure coming from the Chinese to keep releasing better models before their open source starts to get closer.....

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SpicyWangz@reddit

Compete will probably get cheaper, but I imagine a slowdown or brief halt in AI advancement after a pop. Not 80 years though. How long did it take after the dotcom bubble to see new internet startups popping up? Practically instantly. There was a slowdown in capital inflow, but people with ideas still tried stuff. And within half a decade you had tons of investment flowing into apps and internet startups. That’s how we got social media and video platforms

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findingmike@reddit

Some interesting related news: https://coincentral.com/alibaba-group-holding-limited-baba-stock-soars-as-new-ai-pooling-tech-slashes-nvidia-gpu-use-by-82/

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Plus-Accident-5509@reddit

It will be like after the fall of the Roman Empire, when not much new literature was being written, but small groups of devoted monks kept what existed alive for future generations. We'd be the monks in this picture.

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DustinKli@reddit

Most OS models are Chinese and I don't highly doubt they will stop funding the R&D.

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rolyantrauts@reddit

The current race will prob stop and models become a little more scarce with an emphasis on being able to do more with less. It might be actually advantageous for the bubble to pop and a restart.

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Murky_Estimate1484@reddit

Less investment, fewer models released as AI teams are disassembled and funding drys up.

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Background-Ad-5398@reddit

if google is still pushing new models then I dont believe its close to popping, google can and has sustained its own research and development before this and during it, and even if it did, would it really effect what google is doing?

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