We’re Not in an AI Bubble – We’re in an LLM Bubble (And Everyone’s Missing What Actually Matters)
Let me tell you something that’s gonna sound crazy at first but makes perfect sense once you sit with it for a minute.
Everyone keeps talking about the AI bubble. Is AI overvalued? Are we heading for a crash? Is this all hype with no substance? And I’m sitting here watching these conversations unfold thinking – you’re asking the wrong question entirely!
We’re not in an AI bubble. AI is doing remarkable things across dozens of industries right now, solving real problems, creating genuine value, transforming how work gets done. What we’re actually in is an LLM bubble – and the difference between those two things matters more than most people realize!
All the oxygen in the room is getting sucked up by large language models while the real AI revolution is happening in places nobody’s paying attention to!
Look at where all the money’s flowing. Look at where all the headlines are pointing. Look at what every venture capitalist wants to talk about. It’s ChatGPT and Claude and Gemini and whoever’s training the next massive model on the internet’s entire corpus of text. It’s OpenAI and Anthropic and the race to build bigger, more capable, more general-purpose language models. It’s the companies promising AGI is just around the corner if we can just scale up one more time!
And you know what’s happening while everyone’s mesmerized by that show? The actual AI innovations that are changing the world are getting ignored, underfunded, and treated like yesterday’s news!
I’m talking about the AI that’s actually solving problems right now! The AI that’s not trying to do everything but instead doing specific things extraordinarily well! The AI that’s embedded in systems and workflows and processes where it’s creating value you can measure instead of hype you can market!
Natural Language Processing that’s not trying to generate text but understand it at a level that unlocks entirely new capabilities!
We’ve got NLP systems now that can read medical records and spot patterns that save lives. That can analyze legal documents faster and more accurately than teams of paralegals. That can understand customer sentiment across millions of interactions and surface insights that drive real business decisions. That can translate not just words but context and nuance in ways that were impossible five years ago!
This isn’t sexy! This isn’t going to get you on the cover of magazines! But it’s creating billions in value while everyone’s focused on whether GPT-5 can pass the bar exam or write better poetry!
Voice AI that’s moving way beyond “hey Siri” into territory that fundamentally changes how humans interact with technology!
The voice recognition and synthesis happening right now is borderline magical! We’re talking about systems that can understand multiple speakers in noisy environments, detect emotional context, translate in real-time across languages, and create voices so natural you can’t distinguish them from human speech. We’ve got voice AI helping people with disabilities communicate, helping doctors document patient visits, helping customer service operate at scales that were impossible before!
And where’s the coverage? Where’s the investment frenzy? It’s all going to text-based LLMs while voice AI that’s actually deployed and working and creating value is treated like a solved problem when we’re just scratching the surface of what’s possible!
Small Language Models that do one thing brilliantly instead of everything adequately!
Here’s where it gets really interesting! While everyone’s racing to build bigger models that require data centers the size of small cities, there’s a quiet revolution happening with models that are small, efficient, specialized, and ridiculously effective at specific tasks!
We’re talking about models that can run on your phone, that don’t need cloud computing, that are trained on domain-specific data and absolutely crush the tasks they’re designed for! Models for medical diagnosis, for financial analysis, for scientific research, for industrial optimization. Models that aren’t trying to be general intelligence but instead are laser-focused on solving actual problems in specific domains!
And the beautiful part? These models are accessible! They’re affordable! They don’t require you to spend billions on infrastructure! They can be customized, fine-tuned, deployed by organizations that don’t have hyperscaler budgets! They’re democratizing AI in ways that the LLM giants never will!
Precision medicine where AI is literally saving lives right now while everyone talks about chatbots!
This is the one that really gets me fired up! We’ve got AI systems analyzing genetic data, predicting drug interactions, personalizing treatment plans, detecting diseases earlier than ever before, optimizing clinical trials, and fundamentally transforming healthcare outcomes. Real AI doing real work that has real consequences for real people!
AI that can analyze radiology images and spot cancers doctors miss. AI that can predict which patients are at risk for complications before symptoms appear. AI that can design new drug compounds and accelerate the development process by years. AI that’s taking us from one-size-fits-all medicine to treatments tailored to individual genetic profiles!
This is world-changing stuff! This is AI that matters in ways that go beyond productivity gains and cost savings! And it’s happening right now while the entire conversation is dominated by whether large language models can replace knowledge workers!
The pattern here should be obvious – specificity beats generality when you’re trying to create actual value!
LLMs are impressive! I’m not denying that! They can do remarkable things and they’re going to have applications we haven’t fully explored yet. But the entire AI ecosystem has become obsessed with general-purpose models while the specialized AI that’s actually deployed, actually working, actually creating measurable value gets treated like it’s not even part of the conversation!
And you know what this reminds me of? Every other time in tech history when everyone became obsessed with one approach and missed everything else that was happening around it! The dot-com bubble wasn’t about the internet being worthless – it was about everyone betting on portal sites and banner ads while the real value was being built by companies focusing on specific problems like search or e-commerce or logistics!
The LLM bubble is the same dynamic playing out in AI!
Everyone’s pouring money into companies trying to build the most general, most capable, most expensive models when the real returns are coming from AI that’s narrow, specific, efficient, and deployed! The companies crushing it aren’t the ones with the biggest models – they’re the ones with AI so integrated into their operations that it’s become their competitive advantage!
Voice AI companies that own specific verticals. NLP systems that understand domain-specific language better than anything general-purpose could. Small models that run faster, cheaper, and better than the giants for their specific use cases. Precision medicine platforms that have five years of validated outcomes data. Computer vision systems that can do one thing – identify defects, read medical images, navigate environments – at superhuman levels!
This is where the durable value is being built!
And here’s what should terrify anyone betting everything on LLMs – these specialized AI systems have moats that general-purpose models can’t cross! They’ve got proprietary training data, domain expertise baked in, years of deployment learning, integration into workflows that can’t be easily replicated. They’re not competing on who can raise the most money to train the biggest model – they’re competing on who can solve specific problems better than anyone else!
The LLM companies? They’re competing with each other in a race where the finish line keeps moving and the costs keep escalating and the differentiation keeps shrinking! Meanwhile the specialized AI companies are printing money solving real problems for real customers who don’t care about artificial general intelligence – they care about better outcomes, lower costs, faster results!
The really wild part? The LLM bubble might pop without affecting real AI at all!
If OpenAI and Anthropic and the other LLM giants stopped existing tomorrow, the AI revolution would keep rolling! The voice AI would keep improving. The NLP systems would keep getting deployed. The small models would keep getting more efficient. The precision medicine would keep saving lives. Because that AI is built on fundamentals that don’t depend on ever-larger models trained on ever-larger datasets requiring ever-larger capital expenditures!
But everyone’s so fixated on the LLM narrative that they think if that bubble pops, the whole AI story is over. And that’s just wrong! That’s like thinking the internet was dead because pets.com failed! The infrastructure was fine, the technology was real, the value was being created – it just wasn’t being created where everyone was looking!
So what does this mean if you’re trying to navigate the AI landscape right now?
It means stop following the hype and start following the results! Stop investing in the companies with the biggest models and start looking at the ones solving specific problems exceptionally well! Stop betting on general-purpose AI and start betting on specialized systems that own their niches!
The winners in AI aren’t going to be determined by who raises the most money or trains the biggest model. They’re going to be determined by who creates the most value, who solves the most important problems, who builds the most defensible positions in markets that actually matter!
And those winners are already emerging in voice, in NLP, in small models, in precision medicine, in computer vision, in robotics, in a dozen other specialized applications where AI is doing things that couldn’t be done before! They’re just not getting the headlines because they’re not claiming they’re three years away from AGI!
The irony is that while everyone’s worried about an AI bubble, the real bubble is much more specific – and much easier to avoid if you know where to look!
The LLM bubble is real. The valuations are inflated. The costs are unsustainable. The differentiation is shrinking. The path to profitability is unclear. And when that bubble pops – and it will pop, these things always do – there’s going to be a lot of carnage for the companies that bet everything on bigger being better!
But AI? AI’s going to be fine! Because AI isn’t one thing, it’s not just LLMs, it’s not just generative models trying to do everything. It’s a whole ecosystem of technologies, each optimized for different purposes, each creating value in different ways, each following different economic models!
The story everyone’s telling about AI is too narrow, too focused, too captured by the companies with the biggest marketing budgets and the most ambitious promises!
The real story is broader, more diverse, more grounded in actual applications creating actual value. It’s in the voice AI that’s making technology accessible. It’s in the NLP that’s unlocking insights from unstructured data. It’s in the small models that are democratizing access. It’s in the precision medicine that’s personalizing healthcare. It’s in all the places where AI isn’t trying to do everything but is instead doing specific things better than anything else can!
And if you’re building in this space, if you’re investing in this space, if you’re trying to understand where opportunity actually exists – look past the LLM narrative! Look at where AI is deployed and working and creating measurable outcomes. Look at the specialized systems that own their categories. Look at the technologies that have sustainable economics and defensible moats and clear paths to profitability!
Because when the LLM bubble pops – and it will – those are the companies that’ll keep growing. Those are the technologies that’ll keep advancing. Those are the investments that’ll keep returning. Not because they survived the bubble, but because they were never in it to begin with!
We’re not in an AI bubble. We’re in an LLM bubble that’s masquerading as an AI bubble because everyone conflated the two things!
And understanding that difference – really understanding it – is the key to navigating what’s coming next. Because AI’s going to transform everything. Just not necessarily the way the LLM companies are promising, and not necessarily at the scale they’re projecting, and not necessarily through the general-purpose models they’re building!
The transformation’s happening in specifics, not generalities. In focused applications, not universal solutions. In technologies that solve real problems today, not ones that promise artificial general intelligence tomorrow!
That’s where the value is! That’s where the innovation is! That’s where the durable companies are being built! And if you’re not looking there because you’re too focused on the LLM show – you’re missing the entire plot while watching the spectacle!
So yeah, we’re in a bubble. But it’s not the bubble everyone thinks it is. And when it pops, the real AI revolution is going to keep right on rolling because it was never dependent on the thing everyone was hyping in the first place!
That’s my take! The LLM bubble is real, but AI is bigger than LLMs, and the companies and technologies that understand that difference are the ones that are going to own the next decade!
Now tell me – where do you think the real AI value is being created? Because I guarantee it’s not all in the race to build the biggest language model!
SPINMANTV.ME 
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