The AI Bubble Is About to Burst as Token Subsidies End
By
Ben Horne
Summary
The article argues that the AI industry is in a massive bubble driven by subsidized token pricing from companies like OpenAI and Anthropic. As these companies are forced to charge full price for tokens, the author predicts a major unraveling. Key points include: LLMs are plateauing and not the path to AGI (aligning with Yann LeCun's thesis), open-weight models will capture increasing market share as token subsidies end, and the "record revenue" figures used to justify valuations and IPOs will evaporate. Nvidia and chipmakers won't collapse entirely, but the broader AI ecosystem faces a significant correction within the next year.
Source
bskyThe AI Bubble Is About to Burst as Token Subsidies Endbenjaminhorne.substack.comKey quotes
· 5 pulledWe are indeed in a massive AI bubble, and it's going to start unraveling now that the labs are being forced to make customers pay full price for tokens.
When the tokenmaxxing era ends, a huge chunk of this 'record revenue' that Anthropic & OpenAI are basing their latest rounds and IPOs off of will go up in smoke.
The Yann LeCun thesis is right: LLMs are not the road to AGI, and they're already plateauing.
From here, open-weight models will eat a bigger and bigger slice of actual usage as the token subsidies end.
Nvidia and the chipmakers won't go to zero—LLMs did open up a real new...
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