Who Burst The Artificial Intelligence Bubble?

The Real Estate Espresso Podcast

Who Burst The Artificial Intelligence Bubble?

Spotify Google Podcast Apple Podcast Subscribe via RSS Leave a Review

Who Burst The Artificial Intelligence Bubble?

Welcome to the Real Estate Espresso Podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce. On today’s show, we’re talking about the seeming revolution that is taking place in the world of artificial intelligence. Now, this is a real estate podcast, and it might seem out of my lane to be talking about it. But since AI represents ~~such a tectonic shift~~ significant changes in the world, it’s going to affect every single industry. I think it’s important to talk about it.

Moreover, since I come from a technology background, having previously designed micro-processors, I have a pretty decent understanding of how chips are designed and manufactured, I’m probably fairly qualified to talk about it even on a real estate podcast. This major cost reduction for AI is something I’ve personally been predicting for some time. We’re talking, of course, about DeepSeek having undercut the entire industry. Although I haven’t 📝(publicly admitted this online), let me draw a simple analogy.

Imagine for a moment that you could walk up to the Lawrence Livermore lab supercomputer and ask it to perform some simple arithmetic. The supercomputer would do the job and it would do it well. But you could also get a desktop calculator from the dollar store, and it would do just as good a job on a limited set of arithmetic calculations. The supercomputer would be massive overkill for such a simple task

Most of the time, you’re not going to need to input the number PI to 100 decimal places. More often than not, calculations don’t need that. Perhaps, my calculator analogy is a little too simplistic. Imagine for a moment you had a panel of the world’s master scientists all working together on a problem. You would be harnessing the collective wisdom of that group, but you don’t always need a panel of scientists to perform the most basic functions.

All of Deep Seek’s work has been done using an open-source model, and experts from all over the world have been dissecting the work from Deep Seek, validating their seemingly impressive results. To further explain this, let’s consider an industry that is currently in a bubble. Bubbles form when three things come together:

A massive amount of capital injected into a segment.
A story that supports the unlimited upside potential, which fuels the frenzy.
The income of the market is not enough to support that balloon of investment.

We’ve seen these before throughout history. However, when you’re in a bubble, it’s hard to see it. The simple case in point is the market capitalization of Nvidia which peaked at $3.5 trillion dollars. How can one company with a great market position be more valuable than the entire stock market for France and Germany combined?

Deepseek employed several rational techniques to reduce the computational task. This led to a much more efficient way of parsing the use of language, leading to notable savings in terms of computational resources, memory, data centers, and electricity, Thus, the savings are massive. So when a balloon is burst, people tend to focus their energy on the pin. But we need to look upstream and understand why the bubble formed to begin with. And as you think about that, have an awesome rest of your day. Go make some great things happen.

We’ll talk to you again tomorrow.

Stay connected and discover more about my work in real estate and by visiting and following me on various platforms: