[arctic-true]

The fact that the companies that have already shoveled billions of dollars at this are continuing to do so is equally consistent with AI improvement and adoption stalling as it is with infinite improvement and widespread adoption. Yes, it’s irrational to chase sunk costs - but unlike the VC funds that backed Uber and its competition, may of the players in this game are exposed to public markets, which are not known for being rigorously logical. If you pull back on your AI investments, the markets will punish you - probably vigorously - and if your only concern is the value of your stock options, it is entirely rational for you to act in a way that keeps the market from punishing their value. We’re 3 years in without showing any ROI, and who’s to say we can’t get 3 or 5 or 10 more? Plenty of time to cash out before the eventual reckoning.

[bdangubic]

> If you pull back on your AI investments, the markets will punish you - probably vigorously

quite the opposite is happening as evidenced from last earnings reports…

[arctic-true]

There is definitely growing hesitancy in the market, but pulling back at this juncture could set off a full-on race to the bottom, because it would disprove the original point (“all the smart tech companies are all-in, so there must be profit at the end of the tunnel”). Right now, they can point to the skeptics as bears or doomers or whatever. The first big tech company to drop its capex will pierce the aura of invincibility and make the moderate retreat from the exuberant highs of late 2025 look like a blip on the radar.