How will the "AI" bubble burst

First, when we talk about the "AI" bubble "bursting", some people think that the whole GenAI thing will disappear.

If you're in this camp, I have bad news for you. After the crypto and blockchain bubbles exploded, crypto and bubble didn't disappear. They just stopped being mainstream.

Now, how will the AI bubble burst? Somebody offered a few possible scenarios on LinkedIn, that I copy-paste here:

1. Jeff Bezos's scenario - optimistic: a few movers win big, all the others get seriously hurt. The technology bubble bursts, but leaves us with AGI or significant improvements. For those who didn't get hurt, the burn rate becomes a footnote in the longer term.
2. The plateau scenario - middle: We hit diminishing returns. AI becomes incredibly useful but not transformative enough to justify the spend. Consolidation follows. Prices rise making some use cases not that viable.
3. The chicken game scenario - pessimistic: The money runs out before breakthroughs arrive. Mass bankruptcies, not just consolidation. The entire sector collapses under its own weight. We get a brutal AI winter that sets the industry back years.

If you ask me, the whole AGI thing is bullshit. So I think (1) is entirely impossible.

And (2) | (3) are basically the same. AI is already useful for some things... it's just too damn cheap, and its adoption is massively overblown because companies keep shoving it down our throats, despite people being very loud about not wanting the thing.

There's a fourth scenario. Notably, the industry has been desperate about trying to find the next "iPhone moment". Various AI-powered devices were massive flops (Humane Pin, Rabbit), Apple's VR experiment failed to move the needle, nobody wants the Metaverse.

For some time I've believed that, clearly, the next attempt will be domestic robots. We're already seeing some very embarrassing demos, which is a preparation for what's to come. But it's probably the only thing that can keep the wheel turning:

4. Tesla announces a domestic robot for $9,999, industry finds its next hype cycle, everybody forgets agents and chatbots, money keeps flowing. Crisis averted, but RAM and GPU prices continue skyrocketing, potentially harming consumer electronics and virtually every other industry on the planet, not to talk about blackouts and water shortages. Chaos ensues.

I think this would be massively bad. We urgently need the bubble to pop, whatever that means. If we delay it, the suffering will be bigger. But clearly we're already past the no-return point, and the only thing that will save the US economy is a huge bailout (which obviously will be paid by the US taxpayer).

The future looks a bit grim, I know.