A speculative bubble in AI company valuations and GPU ownership is real, but the underlying technology and its use are not going away; however, the pricing bubble—AI providers charging every engineer $5,000 a month—is collapsing under cheaper open-weight models that are 98% as good.
Wes and Scott argue the 'AI bubble' discourse is correct about unsustainable valuations and GPU/capital costs, but wrong that the technology disappears—like the dot-com crash, the internet survived. They see the real correction coming in AI pricing, as companies realize open-weight models are 10x cheaper and nearly as good. ✦ AI generated
Wes · Syntax · 2026-08-05 · original ↗
starts at this moment · 20:04
“What are your thoughts about AI being a bubble? Do you think that the bubble will burst anytime in the near future? Is it even possible? Do you think people will go back to coding manually in that case or would it be difficult to go back to coding manually if we ever have to?”
I think the information around AI being a bubble is very real. I think the the house of cards there in terms of uh CPU or GPU ownership and things like that. I I think all of that very much makes sense. Do I think that the bubble will pop and that AI will go away? Absolutely not. ... when the dot bubble burst, did the internet go away? ... It's just that uh some people got shut down. ... the bubble of Enthropic being able to charge every single engineer $5,000 a month, I think, is is going away. Um, and we're seeing that by people realizing, oh, some of these new open weight models are 10 times cheaper and 98% as good. ... you got to get good at working with this stuff if you want to continue to be effective. That's just where I'm at on this.
verbatim transcript · starts at 20:04
19:44because you're like, "Ah, it's actually fine, but something broke, you know." Um and having an agent be able to decipher, is that just it being flaky? Is that like a non-issue that throw can I modify it? Agents are fantastic at being able to look at something that was flaky and say this is a big deal. Something broke or no that that was that's totally fine. >> Yeah, totally. Cool. Next question here
20:10from Sheabaz. What are your thoughts about AI being a bubble? Do you think that the bubble will burst anytime in the near future? Is it even possible? Do you think people will go back to coding manually in that case or would it be difficult to go back to coding manually if we ever have to? I think listen I think I think the information around AI being a bubble is very real. I think the
20:35the house of cards there in terms of uh CPU or GPU ownership and things like that. I I think all of that very much makes sense. Do I think that the bubble will pop and that AI will go away? Absolutely not. I I think we're I think we're kind of in a world where uh people will just be able to do whatever they want. And I I don't
21:01I I think there's too much money involved here. I think the companies are just going to keep passing money around. AI is going to keep existing until either it becomes profitable or there's just going to be a couple of big players and that's it. Yeah. >> Either way, the uh what is that? The cat cat going down the bag. The rabbit's not going back in the hat. The genie is in
21:21the bottle. >> The genie is not going back in the bottle. >> No. So, are we ever going to go back to writing code by hand only? No. Absolutely not. I don't see that ever happening. I cannot imagine a world where that exists. Uh folks, this is the reality. This is this is it, man. This is what's going on. So like I I just don't I don't see it. Um so to me, you
21:46know, I I think the world that we live in is you got to get good at working with this stuff if you want to continue to be effective. That's just where I'm at on this. >> How we are building this stuff has fundamentally changed forever and that is not going back. the bubble itself. Like CJ and I had a video called the AI bubble is bursting. And that was about
22:06how expensive these things are getting where every single company 6 months ago was like whatever, sign up, spend as much as you want. Go go. We're changing. And then here we are 6 8 months later. A lot of these companies are going oh this is kind of getting expensive. Um we're not spending this much per employee because this is this is hundreds of thousands of dollars a year. Um, and the
22:29bubble of Enthropic being able to charge every single engineer $5,000 a month, I think, is is going away. Um, and we're seeing that by people realizing, oh, some of these new open weight models are 10 times cheaper and 98% as good. So, that's that's where I'm going. So, that the bubble of like how much money these companies have raised and like are they going to be able to get that back? I I