Leaving Gas Town – What Happens When the AI Bubble Bursts?

quicklywilliam

There's been a ton of debate about whether we are in an AI bubble, but I've read a lot less about what will happen when the bubble bursts. I took it for granted that this is a bubble, and in particular that frontier AI companies are heavily distorting the market by subsidizing inference costs. Here's what might happen if those subsidies suddenly go away.