I think it is great that you know many people that use it daily. Can I ask how many PAY for it monthly? Is it as many people that, say, pay for netflix? Outside the tech world, of course. Do you see your friends and family paying for AI services directly? Because the amount of money to provide AI services is at least as great as it is to provide netflix. Probably way more actually.

What companies are making a ton of money on AI? Nvidia? Nvidia makes money selling chips to large, massively profitable companies that are in an arms race to capture as much market share as possible. Or they are selling to smaller companies trying to make a name. But none of those companies are making any money from the AI services they sell. All of them are spending massive amounts of capital.

What happens when we reach an equilibrium point where AI services are ‘good enough’? I’ll tell you what will happen, it will become another cost center for the big companies and all further development will cease once they have eliminated the competition.

Want an example? Smart home speakers. Do you think that Alexa and Google home are the best that they could do? Do you ever wonder why Alexa came out and made a splash and then Google frantically made one of their own, but once market share was evenly split between both companies all new development ground to a halt? It is because they were only going to spend enough to keep the other company from dominating then stop spending. Because there is no way to monetize it. Not really. You can charge for the hardware, but that is a pittance to them. Can you charge for the service? I use my google home all the time for some things, but if they told me they were going to start charging me would I continue using it? Probably not. There is a reason Amazon recently RIF’d a bunch of people on the alexa team.

People say that this is not like pets.com because profits are real, but are they? Or is it some crazy ponzi-like thing where the amazing profits being had by companies like Nvidia are going to dry up eventually. I say it more like Cisco of 2000, where they were making tons of money selling hardware to all those pets.com companies. Follow the money. Once you get to the person/company paying for the service, there is none. Not on this scale at least. I think there will definitely be companies that pay for an AI service, but the amount of total market spend will be somewhat less than the total spend for something like cell phone service or streaming services. You know, like those things that everyone you know, from technical to luddite, from rich to poor, all pay for. I don’t see AI reaching that level of ubiquity. Do you pay for email service? I know that the people on this site do, to some extent. Email providers charging for their services are a niche market. AI is destined to be the same.

Just to be clear, I agree with you that this will be like the internet was. It will change the world. But it is without a doubt a bubble, just like the early internet. And for the reasons that you say - everyone can easily see that it is ‘something’ just by using it. The barrier to entry is very low, just like opening a browser and going to a website was. It does not take a genius to see the potential. Which is all the more reason that dumb money is flowing like water into this bubble.