The Artificial Intelligence bubble in the United States is still growing. It is consuming a large share of the available financial resources. But its output, in form of real products, is so far rather meager.

There are some code generation tools which are, at times, helpful, but, unless subsidized, very expensive. There is ChatGTP and other squawk boxes which in the end are just new forms of inherently unreliable web search tools.

What is missing are useful mass applications billions of people are willing to pay for.

Still – a large number of ‘very important people’ believe that the Large Language Models, which are at the core of OpenAI’s and Anthropic products, will one day reach the capabilities of sentient beings. That is, in my view, utter bullshit, but who am I to tell you.

Ed Zitron and others will rightly tell you that the huge investments spent on AI are making no sense at all.

Where are the products and the customers that will allow to recuperate the hundreds of billions of shady dollars spent on data centers for AI?

The Chinese modelers, for lack of unlimited venture capital, have had to find better ways to solve the problems. Their use of different algorithms allows them to deliver nearly similar results for much less money.

There is also a difference in attitude. Where U.S. financiers like Larry Ellison are striving for some god-like general artificial intelligence, the Chinese (and some European) developers and financiers are much more interested in solving real world (industry) problems.

At some point the AI bubble in the U.S. will blow up. There will be a lot of collateral damage. Many people will lose their money. There will be a number of useless empty data centers up for rent.

The NY Times and the Economist presume that this will cause China to have similar problems.

That is unlikely to be the case as Chinese AI is based on a different math, and different economic models.

Roth Note: I recall all the money being poured into solar and wind farms; technology that costs more energy to establish than it produces, all subsidized by the government. I smell a similar scam with AI.

Read the entire post at Moon of Alabama …