Thing is, they tried to show that public adoption was large enough to warrant a $100B+ value, that basically everyone wanted AI. That was the difference between a $20B valuation and 100+. But several failures have occurred the last few months that hints at the public at large not wanting to adopt their tech in such quantities and the longer they wait the worse a signal it might send for the IPO. Lack of adoption, lack of progress towards AGI, dwindling returns, ballooning costs.
I estimate that the AI bubble will burst pre-IPO or during the IPO, thus not affecting the public at large. There’s still a risk that they fudge the IPO numbers hard enough to create FOMO and people wanting to buy but they’d have to go dangerously close to fraud territory to make a good case. Just watch out for the first AI IPOs. There’s likely a smaller AI company that’ll go first that’ll be a canary in the coal mine. If their IPO succeeds the big boys will make an attempt but if it fails they’ll likely postpone an IPO indefinitely, making it a long, dragged out market correction, not a quick pop.
They’re quite likely to survive, even in a worst case scenario. AI isn’t going away and we still need hardware to run it. And in a worst case scenario they still have an inventory that keeps a certain value. For a pure AI company like OpenAI or Anthropic, in a worst case scenario their $100B could be worth 0 the next day. There’s no inventory to sell out like they could in the housing crisis in 2008 or with internet infrastructure during dotcom.
Those who sell shovels during a gold rush are generally safe. They might be overvalued during the bubble, but the shovels aren’t going away. IMO from the little info I have on Cerebras it looks like they’re even better positioned since their hardware is uniquely solving AI efficiency. During a market correction people start caring very much about efficiency and is almost entirely allergic to anything that smells of hype. If they need AI hardware they want the efficient ones.
Thing is, they tried to show that public adoption was large enough to warrant a $100B+ value, that basically everyone wanted AI. That was the difference between a $20B valuation and 100+. But several failures have occurred the last few months that hints at the public at large not wanting to adopt their tech in such quantities and the longer they wait the worse a signal it might send for the IPO. Lack of adoption, lack of progress towards AGI, dwindling returns, ballooning costs.
I estimate that the AI bubble will burst pre-IPO or during the IPO, thus not affecting the public at large. There’s still a risk that they fudge the IPO numbers hard enough to create FOMO and people wanting to buy but they’d have to go dangerously close to fraud territory to make a good case. Just watch out for the first AI IPOs. There’s likely a smaller AI company that’ll go first that’ll be a canary in the coal mine. If their IPO succeeds the big boys will make an attempt but if it fails they’ll likely postpone an IPO indefinitely, making it a long, dragged out market correction, not a quick pop.
Already happened with Cerebras and they landed at a stable 2x of the open. SpaceX is probably going to be next & set the real standard
Cerebras makes really interesting hardware though. The engineering, even just the packaging and cooling and power delivery, is utterly insane.
I have a server teardown saved that was so cool, they took it down from YouTube (for revealing too much I think).
I hope they survive the bubble so their stuff can be used for oldschool small-model ML, which is what their stuff is actually good at.
…And no one else is like that, except maybe Huawei. All the other “AI” ASICs are junk, nothingburgers, vaporware, or straight up pyramid schemes.
They’re quite likely to survive, even in a worst case scenario. AI isn’t going away and we still need hardware to run it. And in a worst case scenario they still have an inventory that keeps a certain value. For a pure AI company like OpenAI or Anthropic, in a worst case scenario their $100B could be worth 0 the next day. There’s no inventory to sell out like they could in the housing crisis in 2008 or with internet infrastructure during dotcom.
Those who sell shovels during a gold rush are generally safe. They might be overvalued during the bubble, but the shovels aren’t going away. IMO from the little info I have on Cerebras it looks like they’re even better positioned since their hardware is uniquely solving AI efficiency. During a market correction people start caring very much about efficiency and is almost entirely allergic to anything that smells of hype. If they need AI hardware they want the efficient ones.