It’s a simple supply-demand issue that took 30 years to arrive and will take at least 5 years to solve unless the AI bubble pops a lot sooner to stop the hoarding by big tech cloud companies, Chinese state-backed investment and others who are betting it all on black like a has-been Hollywood actor at a Caesars roulette table on a Saturday night. The US never penalized US tech companies for shuttering the dozen memory plants since the 1990s so they just relied on the Koreans and a few others. Now Korea can’t keep up and the US tech companies have been caught with their pants down. While these kinds of people are very bright within their areas of expertise, leading to huge earnings, they’re not bright on most business topics and eventually the market shifts and they’re struggling.

This is where the tech companies founded in the 1970s-2000s are right now. Their original ideas are long in the tooth at best and about to be disrupted, if not already disrupted. The cash cows are looking a little fatigued. They’re looking for a lifeboat to keep the good times going, thinking its AI, just now realizing their industry screwed itself with all of the offshoring but its too late now. They have to once again “fake it until they make it”.

They just hope the people providing the capital don’t start asking about when the market will accept the higher price points so they can break even. That’s a question nobody acknowledges today when it’s asked because they know it could sink the boat if it becomes a hot topic of the month on CNBC and Bloomberg.

X loses money so no margins there. Twitter has never made a profit in its history that I’ve ever heard of. Facebook’s on the way out. 20 years ago it was college age users. 10 years ago it was people over 50. Now it’s a lot of commercial accounts posting as they do on other basically dying or dead platforms. The only sign of life is streaming video and chats related to streaming video. YouTube has been losing users and content creators to both Rumble and Twitch. The right 1/3 of America is on Rumble while Twitch took the gamers. Youtube still has business but they basically gave away enough business to make those 2 relevant.

Alphabet’s dependent on Youtube, cloud services, web search, and related ads to pay for the unprofitable parts of the business, which appears to be where the bulk of their employees work, rather than at the earnings-generators. If they screw up youtube, then they will have to lay a lot of the people in the fun and interesting jobs off, along with the many layers of bureaucracy and non-coders working in jobs that nobody’s quite sure what they do there. They can’t really afford to screw up youtube any more than they have. It can’t merely do well. It has to do great to pay all of their bills. Very similar to the action-hero movies at the movie studio paying for all the unprofitable ones that most people work on

Seems the same pattern at X, probably because they hired in an ex-YouTuber at the top. Moderation algorithms are universally very poorly written and don’t appear to have gotten better in the last 6-8 years when they began using them to replace human moderators. On X they seem to have a timer for new accounts that puts a fake label on accounts as if they’re spamming or a bot, when it’s just a real user with opinions the algorithm is trained to dislike. Same exact crap the old Twitter did. They put the source code on the web and it showed how if you posted or replied on any of a broad range of topics, your account was scored lower until you were deemed low quality and made invisible. It’s like they just wanted cat memes and recipes from elderly women, but not many of them on Twitter or X. Probably because they hired in people from companies where non-controversial topics were a much larger share of what was discussed there. 1 trick ponies who weren’t suitable for doing the same job at X.

There’s no way to boost ad views or MAU with that approach. I believe X will never be profitable due to those people running the show and Musk not ever hiring anyone a lot better to run X. Musk had a similarly bad experience with Solar city. Another company he didn’t know enough about to manage himself and the people he hired to do it weren’t good enough either.

Software developers will always be needed, at least to make sure the vibe code didn’t make a logic error that will cause the elevator to crash when someone pushes the wrong series of floor buttons, etc. However its making a lot more coding equivalent to an Excel Macro, where an end-user can do it without a pro developer being involved. Things like JSONs for AIs or basic python apps. It might even lure some of those people into learning a little about the language.

There’s no way possible an AI can hack anyone unless the people running it intended for that to occur or were negligent. Anyone with questions about that should install a copy of LM Studio or Ollama on their PC, download a model, and see how easy it is for the AI to hack someone. It’s impossible. Only human intervention can make it possible.

These stories seem like propaganda intended to get the US government to block usage of open weight models, since they pose an existential threat to the marketshare of expensive closed AI services these companies offer. Open weight models exist in all sizes, from very rudimentary small models to massive near-frontier quality models, and anyone with the tech know-how and a computer able to run them can do so without paying the AI companies or involving the AI companies in any way. It’s like Linux for AI.

It comparable to if Microsoft declared Linux a hacker OS that hackers can use to take down networks. Fear, uncertainty and doubt are the first resort, not last resort, of big companies who know they can’t possibly compete with a better alternative.

oh no, it’s not just in the USA. Big companies in China are making AIs, like GLM, Wan, Hunyuan, Kimi, Qwen, Kling, etc. The difference is, except for Kling, GLM and Kimi, you can also run those on a gaming PC at your house rather than just in a cloud server farm. American AI companies don’t really do that except Google’s Gemma (which they turn into Gemini) The American hyperscalers are probably buying up most of the world’s GPUs, Ram, and SSDs but the Chinese aren’t far behind. They have state money to spend. Some say they are way ahead on expanding energy production to power all those data centers.

While the headline doesn’t discuss it, the article begins with “Meta has opened Pandora’s box with its AI-infused smart sunglasses. The pricy accessory has sparked a heated debate over privacy, with unsavory individuals abusing the eyewear’s easily-missed cameras to harass unsuspecting strangers in public — garnering the specs the distinctly unflattering nickname of “pervert glasses.””

He’s just a kid, who took a wrong turn, and is from a good family. He’s obviously going to turn his life around. In 10 years, my best guess is the guy’s likely to become a surgeon.

I don’t expect movement towards AI among small business to show up in total cloud AI revenues.

Small businesses are typically more competently run than the typical big corporation, so I doubt they’re going to do things like lay most of their quality control people off thinking AI will do it. Big companies are mostly mid-wit trendies not anything that bright. Due to the perpetual motion of mature companies once they get off the ground, its hard for their stupid decisions to lead to bankruptcy. It takes a long time. They’re essentially doing the bumper cars version of business, while small business is in the 1960s Formula 1 where any major mis-step could end their companies’ existence.

Small businesses also don’t need to spend a lot. Their needs could be met by a semi-skilled local IT guy they hire to set up LM Studio on a gaming PC to run a 26B or 35B model. Big companies will spend the same amount on their peoples’ Dell or HP laptops business laptops that cost about the same but can’t run local AI.

Open weights models like Kimi and GLM provide near-frontier quality on any low cost service that installs them. GLM 5.2 is excellent.

I mean its use as a tool, maybe in a small business context. The individual can be the “visionary” giving their idea for a book to a de-facto ghost writer. AI’s will often give you back info that confirms your ideas, so its like any other tool. If I am not good with a hammer then I smash my fingers and if I’m not good with AI then I convince myself the earth is actually flat.

This moment in history is a lot like when power tools were first invented. The bad news is corporate leaders seem to view AI as a means to downsize people. The good news is that AI lets many people who formerly lacked the ability to do anything on their own to move on the “I wish I could do ____. but _____” ideas in their head. It could be anything. You can run a competent local AI model in LM Studio with a $1000 gaming PC or you can pay $20 a month to run a frontier-quality open weights model without the usage limits of the big names. The free AIs can help you get started on doing that. Big companies are using AI for a lot of stupid crap that they try to make sound very profound. They assume customer service and quality assurance are no longer “a thing”. This era reminds me of the 1970s when Bill Gates and Steve Jobs had their opening. Sometimes the big guys get sloppy. We’re at that point right now. Enshittification is everywhere.

If they’re tracking web use by PCs they know are not servers, then it’s likely due to a combination of local AI computer web scraping and people using SteamOS devices, which are running Linux. Prosumer local AI users often learn Linux if they don’t already know how to use it, because the software runs more efficiently on it. Anyone with a Steamdeck or Linux distro like Bazzite copying it on the desktop can exit to desktop mode and use it like a normal PC.