I have been meaning to write a follow-up to my post about AGI with a second part. My intention was to document some examples of prominent people saying or strongly implying that AGI is imminent, to convince myself and my imagined readers that this view is pervasive. For example, here is AI researcher Geoffrey Hinton, often called the "Godfather of AI", speculating about AGI while veiling this as disinterested scientific analysis. Here is the co-founder of Anthropic speaking matter-of-factly about creating human-level AI. However, I've also started to wonder if we've hit peak AI hype, and I am going to write about that instead.
I should elaborate on something I didn’t really cover in my first post on AI, which is the connection between “AGI” hype and AI economics. There are other writers who have already spent a lot of effort documenting the economics of the AI companies. For a good skeptical analysis, see The Hater’s Guide to the AI Bubble. The TLDR is that the “Magnificent Seven” (NVIDIA, Microsoft, Alphabet (Google), Apple, Meta, Tesla and Amazon) are spending massive capital on building AI data centers, but LLMs are not actually bringing in that much revenue. The only way this bubble has been able to continue this long, in my opinion, is optimism that LLM progress has increasing exponentially, and that extremely competent LLMs will massively displace human labour in the near future, resulting in huge profits for the companies that have invested so much capital in these models.
Since I’m skeptical that we’re anywhere near creating AGI, and I’m also skeptical that AI progress has been increasing exponentially, I’m definitely with the skeptics on this bubble idea. The reason I’m writing this now is that I feel like I’m seeing a growing number of people voice concern about the US stock market’s over exposure to AI. Here’s a short list from the last few days:
- Paul Krugman, economist: About That Stock Market
- Noah Smith, econ blogger: Who will actually profit from the AI boom?
- Derek Thompson, author of Abundance, blogger: How AI Conquered the US Economy: A Visual FAQ
- Hank Green, pop science vlogger: I’m Changing How I Manage My Money Because of AI
The last one is particularly interesting to me as it signals that this narrative may be “breaking containment”. The other three articles are from people who are either economists or follow and write about economics. Hank Green, on the other hand, is a popular Youtuber who mostly talks about pop science, as far as I know.
So why now? Maybe it’s because GPT-5 was just released and the evaluation of it has been lukewarm. The biggest story to come out of the launch was the chart that misleadingly made GPT-5 look much better than OpenAI’s previous best model, o3. If optimism about the progress of AI is fading, it may mean more people start to ask some questions about how much of the US economy (or at least stock market) depends on it.