The Valley Bubble Breaks

I expected something to happen around the AI hype after the US elections. I didn’t expect it to happen so soon. Too early to tell yaddah yaddah, and the hype could very well continue for another few months, but did any AI-related stock ever tumble before now?

Silicon Valley exists in its own reality bubble. Hell, the entire US tech scene inhabits in a bubble whose main feature is relentless self-flagellation. Apparently they’re all Guilty and will be Punished. (Then again, the US is fundamentally a Calvinist country.) Sanity prevails only outside the US. Sometimes.

For now I’ll stick to my idea: the Valley is creating something with the appeal of a 19th-century factory, complete with oppressed and estranged workers, without delivering the sole benefit of such factories: cheaper IT and other services. They want to get rid of the middle classes whose salaries they have to pay so badly that they forgot to create an appealing product.

The Valley doesn’t understand how fed up normal people are with AI. This is the first time ever a technological advance is so cordially disliked, and the Valley is not equipped to detect that. It has no experience with being disliked by normal people.

Also, so far many of the Valley’s consumer tech innovations were free. AI isn’t free, or even cheap, as we’ll see in the coming months, once credit dries up.

The Valley’s position will be damaged permanently, and tech will lose its centre of gravity, its global Schwerpunkt. I don’t think there will be a replacement. I think we’re moving to a multi-hub world, and I think that’s a good development. Sure, inertia will keep the Valley important for decades to come, but it’s lost its natural dominance of the hearts and minds of the world. Permanently.

None of this is a judgement on AI itself. I refuse to do anything about it until its true costs are known, after the hundreds of billions per year (month?) of free money from clueless investors dry up. All the while I acknowledge that there is something there that will change programming — just not as radically as the US-based doomsayers think. AI can copy, it cannot innovate.