The AI wildfire is coming. it's going to be painful and healthy

I still don't understand what should this "wildfire" burn. My perspective is very limited, but where are the pets.com of AI today? Where are all the small companies with improbable business cases that are getting absurd valuations/ investments because they're in AI? The space seems mostly dominated by huge players that, while burning tons of cash, are still making real progress on something that will have more economic impact than society can actually bear. Who should be wiped out by the wildfire? Anthropic?

To be fair, if you look at language learning reddit, there are about 10 ads a day for shovelware of AI powered apps that no one ever needed. They would be those pets.com

Maybe I just didn't notice. Fair. But are these ads from companies that are collecting large capitals, or from small shops that just use the APIs provided by the few big players?

Not parent - but I've noticed those same 'start ups' and they just seem to be today's hustle-bro crypto/drop-ship/mobile-app/ceo-with-no-employees/self-help-book/low-effort grift (bullshit).

I'm sure some of them have managed to shake some change out of the VCs but these wanna-be shovel sellers are just gonna let their domains expire and move on to the next scheme with little overall damage to the economy.

I am pretty sure they use API and dont have millions on training.

I have no idea about their financials. They just annoy me, because they mask their ads as posts/comments. And use ChatGPT to generate those, they are like 2 page long drivel.

Grammarly certainly comes to mind, for being essentially a free feature of most chat AIs now.

Interestingly this time around I could see the 'fire' affecting mid-large corporations (or at least some divisions of them) if they don't adapt. Adobe, being heavily focused on graphic design seems like it could be under pressure. Low-end consulting / outsourcing is largely doing the same work AI is good at. Similarly with technical gig-work (like Upwork).

OpenAI and Anthropic.

They have no business case - they are 'burn money and hope AI allows us to build something we can monetise'. That's not a business model.

From how stock valuations look like, they had an insane rally from the release of ChatGPT to around mid-2024, from which point it stayed mostly on a consistent trajectory with the rest of the economy.

I think a huge breakthrough for AI was priced in, and we are still waiting to find out if it will come and what it'll be.

Personally, as this article seems investment focused, I see no downside to diversifying away into more varied kind of investments, but then again, I'm not a pro, so take it with a grain of salt..

Don't know about OpenAI, but Claude wrote almost all of my code in the past few days, multiplying my productivity by a factor of at least two. My feeling is that for some use cases Anthropic could already charge enterprises a significant fraction of each developer's salary and it would still be a net gain for customers.