Some thoughts on LLMs and software development

A bubble is asset prices systematically diverging from reasonable expectations of future cash flows. Bubbles are driven by financial speculation.

The claim in the blog post that all technology leads to speculative asset bubbles I find hard to believe. Where was the electricity bubble? The steel bubble? The pre-war aviation bubble? (The aviation bubble appeared decades later due to changes in government regulation.)

Is this an AI bubble? I genuinely don't know! There is a lot of real uncertainty about future cash flows. Uncertainty is not the foundation of a bubble.

I knew dot-com was a bubble because you could find evidence, even before it popped. (A famous case: a company held equity in a bubble asset, and that company had a market cap below the equity it held, because the bubble did not extend to second-order investments.)

Just taking your first example, yes I believe you could characterize a lot of the investments in electrification as speculative bubbles even though there was underlying value that was borne out.

https://en.wikipedia.org/wiki/Public_Utility_Holding_Company...

Besides electricity (answered above), there were bubbles related to steel production in its early days intertwined with the railroad bubble that drove huge investments in steel production for railroad development; when the railroad companies crashed it brought down steel as well; ultimately both survived in a more subdued form (as with the dot coms).

avation: likewise there was the "Lindberg Boom" https://en.wikipedia.org/wiki/Lindbergh_Boom which led to overspeculation and the crash of many early aviation companies

I want to re-phrase your definition.

To me a bubble reflects a market disconnect from fundamentals - wherein prices go up steeply, with no help from the fundamentals (expected growth in base year cash flows and risk).

Indeed there is a subtle difference between a bubble and speculation of what could come of a technology. But the two are connected because the effects of technology are reflected by investors in asset prices.