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The AI bubble is so big it's propping up the US economy (for now)

⁨291⁩ ⁨likes⁩

Submitted ⁨⁨1⁩ ⁨day⁩ ago⁩ by ⁨chobeat@lemmy.ml⁩ to ⁨technology@lemmy.world⁩

https://www.bloodinthemachine.com/p/the-ai-bubble-is-so-big-its-propping

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  • danhab99@programming.dev ⁨16⁩ ⁨hours⁩ ago

    I feel like literally everybody knew it was a bubble when it started expanding and everyone just kept pumping into it.

    How many tech bubbles do we have to go through before we leave our lesson?

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    • sibachian@lemmy.ml ⁨15⁩ ⁨hours⁩ ago

      what lesson? it’s a ponzi scheme and whoever is the last holding the bag is the only one losing.

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      • 123@programming.dev ⁨10⁩ ⁨hours⁩ ago

        Plus everyone else that pays taxes as they will have to continue to pay for unemployment insurance, food stamps, rent assistance, etc (not the CEOs and execs that caused it that’s for sure).

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      • Tollana1234567@lemmy.today ⁨4⁩ ⁨hours⁩ ago

        its the NEW CRYPTO hype basically

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    • belit_deg@lemmy.world ⁨5⁩ ⁨hours⁩ ago

      I get that people who sell AI-services wants to promote it. That part is obvious.

      What I don’t get is how gullible the rest of society at large is. Take the norwegian digitalization minister, who says that 80% of the public sector shall use AI. Whatever that means. nrk.no/…/regjeringen-vil-at-80-prosent-av-offentl…

      Or building a gigantic fuckoff openai data centre, instead of new industry openai.com/nb-NO/…/introducing-stargate-norway/

      Jared Diamond had a great take on this in “Collapse”. That there a countless examples of societies making awful decisions - because the people making said decisions are insulated from the consequences of their choices. On the contrary, they get short term gains.

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    • Tollana1234567@lemmy.today ⁨4⁩ ⁨hours⁩ ago

      the ceos, C-SUITES and some people trying to get into CS field are the one that believe in it. i know a person who already has a degree, and sitll think its wise to pursue a GRAD degree in the field adjacent or directly with AI or close to it.

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  • Xulai@mander.xyz ⁨1⁩ ⁨day⁩ ago

    As someone who works with integrating AI- it’s failing badly.

    At best, it’s good for transcription- at least until it hallucinates and adds things to your medical record that don’t exist. Which it does and when the providers don’t check for errors - which few do regularly- congrats- you now have a medical record of whatever it hallucinated today.

    And they are no better than answering machines for customer service. Sure, they can answer basic questions, but so can the automated phone systems.

    They can’t consistently do anything more complex without making errors- and most people are frankly too dumb or lazy to properly verify outputs. And that’s why this bubble is so huge.

    It is going to pop, messily.

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    • Laser@feddit.org ⁨1⁩ ⁨day⁩ ago

      and most people are frankly too dumb or lazy to properly verify outputs.

      This is my main argument. I need to check the output for correctness anyways. Might as well do it in the first place then.

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      • RagingRobot@lemmy.world ⁨1⁩ ⁨day⁩ ago

        People are happy to accept the wrong answer without even checking lol

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      • GhostTheToast@lemmy.world ⁨7⁩ ⁨hours⁩ ago

        Honestly I mostly use it as a jumping off point for my code or to help me sound more coherent when writing emails.

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      • mrvictory1@lemmy.world ⁨14⁩ ⁨hours⁩ ago

        This is exactly why I love duckduckgo’s AI results built in to search. It appears when it is relevant (and yes you can nuke it from orbit so it never ever appears) and it always gives citations (2 websites) so I can go check if it is right or not. Sometimes it works wonders when regular search results are not relevant. Sometimes it fails hard. I can distinguish one from the other because I can always check the sources.

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    • rhombus@sh.itjust.works ⁨19⁩ ⁨hours⁩ ago

      And they are no better than answering machines for customer service. Sure, they can answer basic questions, but so can the automated phone systems.

      This is what drives nuts the most about it. We had so many incredibly efficient, purpose-built tools using the same technologies (machine learning and neural networks) and we threw them away in favor of wildly inefficient, general-purpose LLMs that can’t do a single thing right. All because of marketing hype convincing billionaires they won’t need to pay people anymore.

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    • hansolo@lemmy.today ⁨1⁩ ⁨day⁩ ago

      This 1 million%.

      The fact that coding is a big corner of the use cases means that the tech sector is essentially high on their own supply.

      Summarizing and aggregating data alone isn’t a substitute for the smoke and mirrors of confidence that is a consulting firm. It just makes the ones that can lean on branding able to charge more hours for the same output, and add “integrating AI” another bucket of vomit to fling.

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    • OctopusNemeses@lemmy.world ⁨23⁩ ⁨hours⁩ ago

      I tried having it identify an unknown integrated circuit. It hallucinated a chip. It kept giving me non-existent datasheets and 404 links to digikey/mouser/etc.

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    • drmoose@lemmy.world ⁨21⁩ ⁨hours⁩ ago

      As someone who is actually an AI tool developer (I just use existing modes) - it’s absolutely NOT failing.

      Lemmy is ironically incredibly tech illiterate.

      It can be working and good and still be a bubble - you know that right? A lot of AI is overvalued but to say it’s “failing badly” is absurd and really helps absolutely no one.

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      • pinball_wizard@lemmy.zip ⁨6⁩ ⁨hours⁩ ago

        Lemmy is ironically incredibly tech illiterate

        I disagree with all these self hosting Linux running passionate open source advocates, so they must be technology illiterate.

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    • interdimensionalmeme@lemmy.ml ⁨1⁩ ⁨day⁩ ago

      insurance companies, oh no, insurance companies !!! AArrrggghhh !!!

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    • vacuumflower@lemmy.sdf.org ⁨23⁩ ⁨hours⁩ ago

      Well, from this description it’s still usable for things too complex to just do Monte-Carlo, but with possible verification of results. May even be efficient. But that seems narrow.

      BTW, even ethical automated combat drones. I know that one word there seems out of place, but if we have an “AI” for target\trajectory\action suggestion, but something more complex\expensive for verification, ultimately with a human in charge, then it’s possible to both increase efficiency of combat machines and not increase the chances of civilian casualties and friendly fire (when somebody is at least trying to not have those).

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      • pinball_wizard@lemmy.zip ⁨6⁩ ⁨hours⁩ ago

        it’s possible to both increase efficiency of combat machines and not increase the chances of civilian casualties and friendly fire (when somebody is at least trying to not have those).

        But how does this work help next quarters profits?

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  • RabbitBBQ@lemmy.world ⁨9⁩ ⁨hours⁩ ago

    It’s going to be great when the AI hype bubble crashes

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  • Tattorack@lemmy.world ⁨1⁩ ⁨day⁩ ago

    **SSSSIIIIIIIGGGGGGHHHHHHHHHHH… **

    Looks like I’ll have to prepare for yet another once-in-a-lifetime economic collapse.

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    • Dogiedog64@lemmy.world ⁨17⁩ ⁨hours⁩ ago

      How many does this make now, 6? 7? I lost track after Covid broke my understanding of time and space.

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      • HakunaHafada@lemmy.dbzer0.com ⁨13⁩ ⁨hours⁩ ago

        Covid really fucked everything up. My sense of time and recent-ish history went to shit.

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  • yarr@feddit.nl ⁨20⁩ ⁨hours⁩ ago

    Everyone knows a bubble is a firm foundation to build upon. Now that Trump is back in office and all our American factories are busy cranking out domestic products I can finally be excited about the future again!

    I predict that in a year this bubble will be at least twice as big!

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    • Etterra@discuss.online ⁨17⁩ ⁨hours⁩ ago

      If the bubble is on top of sand it can support anything.

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  • belit_deg@lemmy.world ⁨1⁩ ⁨day⁩ ago

    If I was China, I would be thrilled to hear that the west are building data centres for LLMs, sucking power from the grid, and using all their attention and money on AI, rather than building better universities and industry. Just sit back and enjoy, while I can get ahead in these areas.

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    • umbrella@lemmy.ml ⁨8⁩ ⁨hours⁩ ago

      never interrupt your enemy while he is making a big mistake

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    • disco@lemdro.id [bot] ⁨1⁩ ⁨day⁩ ago

      They’ve been ahead for the past 2 decades.

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      • vacuumflower@lemmy.sdf.org ⁨23⁩ ⁨hours⁩ ago

        They have a demographic pit in front of them which they themselves created with “1 child policy”.

        Also CCP too doesn’t exactly serve the people. It’s a hierarchy of (possibly benevolent) bureaucrats.

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  • Etterra@discuss.online ⁨17⁩ ⁨hours⁩ ago

    When this puppy pops it’s gonna splatter all of us with chunky bits.

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  • drmoose@lemmy.world ⁨21⁩ ⁨hours⁩ ago

    Willing to take real life money bet that bubble is not going to pop despite Lemmy’s obsession here. The value is absolutely inflated but it’s definitely real value and LLMs are not going to disappear unless we create a better AI technology.

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    • SwingingTheLamp@midwest.social ⁨20⁩ ⁨hours⁩ ago

      I get the thinking here, but past bubbles (dot com, housing) were also based on things that have real value, and the bubble still popped. A bubble, definitionally, is when something is priced far above its value, and the “pop” is when prices quickly fall. It’s the fall that hurts; the asset/technology doesn’t lose its underlying value.

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    • EncryptKeeper@lemmy.world ⁨21⁩ ⁨hours⁩ ago

      I mean we haven’t figured out how to make AI profitable yet, and though it’s a cool technology with real world use cases, nobody has proven yet that the juice is worth the squeeze. There’s an unimaginable amount of money tied up in a technology on the hope that one day they find a way to make it profitable and though AI as a technology “improves”, its journey towards providing more value than it costs to run is not.

      If I roleplayed as somebody who desperately wanted AI to succeed, my first question would be “What is the plan to have AI make money?” And so far nobody, not even the technology’s biggest sycophants have an answer.

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      • bridgeenjoyer@sh.itjust.works ⁨20⁩ ⁨hours⁩ ago

        The profit of ai lies in this: mass surveillance and ads. Thats it.

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      • drmoose@lemmy.world ⁨18⁩ ⁨hours⁩ ago

        AI is absolutely profitable just not for everybody.

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    • WhirlpoolBrewer@lemmings.world ⁨20⁩ ⁨hours⁩ ago

      In a capitalist society, what is good or best is irrelevant. All that matters is if it makes money. AI makes no money. The $200 and $300/month plans put in rate limits because at those prices they’re losing too much money. Lets say the beak-even cost for a single request is somewhere between $1-$5 depending on the request just for the electricity, and people can barely afford food, housing, and transportation as it is. What is the business model for these LLMs going to be? A person could get a coffee today, or send a single request to an LLM? Now start thinking that they’ll need newer gpus next year. And the year after that. And after that. And the data center will need maintenance. They’re paying literally millions of dollars to individual programmers.

      Maybe there is a niche market for mega corporations like Google who can afford to spend thousands of dollars a day on LLMs, but most companies won’t be able to afford these tools. Then there is the problem where if the company can afford these tools, do they even need them?

      The only business model that makes sense to me is the one like BMW uses for their car seat warmers. BMW requires you to pay a monthly subscription to use the seat warmers in their cars. LLM makers could charge a monthly subscription to run a micro model on your own device. That free assistant in your Google phone would then be pay walled. That way businesses don’t need to carry the cost of the electricity, but the LLM is going to be fairly low functioning compared to what we get for free today. But the business model could work. As long as people don’t install a free version.

      I don’t buy the idea that “LLMs are good so they are going to be a success”. Not as long as investors want to make money on their investments.

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      • bridgeenjoyer@sh.itjust.works ⁨14⁩ ⁨hours⁩ ago

        I imagine a dystopia where the main internet has been destroyed and watered down so you can only access it through a giant corpo llm. So you choose between watching an ai generated movie for entertainment or a coffee. Because they will destroy the internet any way they can.

        Also they’ll charge more for prompts related to things you like. Its all there for the plundering, and consumers want it.

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      • obbeel@mander.xyz ⁨19⁩ ⁨hours⁩ ago

        I believe that if something has enough value, people are willing to pay for it. And by people here I mean primarily executives. The problem is that AI has not enough value to sustain the hype.

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      • drmoose@lemmy.world ⁨16⁩ ⁨hours⁩ ago

        people can barely afford food, housing, and transporation as it is.

        Citation needed. The doomerism in this thread is so cringe.

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    • frezik@lemmy.blahaj.zone ⁨16⁩ ⁨hours⁩ ago

      LLMs can absolutely disappear as a mass market technology. They will always exist in some sense as long as there are computers to run them and people who care to try, but the way our economy has incorporated them is completely unsustainable. No business model has emerged that can support them, and at this point, I’m willing to say that there is no such business model without orders of magnitude gains in efficiency that may not ever happen with LLMs.

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    • GamingChairModel@lemmy.world ⁨14⁩ ⁨hours⁩ ago

      The value a thing creates is only part of whether the investment into it is worth it.

      It’s entirely possible that all of the money that is going into the AI bubble will create value that will ultimately benefit someone else, and that those who initially invested in it will have nothing to show for it.

      In the late 90’s, U.S. regulatory reform around telecom prepared everyone for an explosion of investment in hard infrastructure assets around telecommunications: cell phones were starting to become a thing, consumer internet held a ton of promise. So telecom companies started digging trenches and laying fiber, at enormous expense to themselves. Most ended up in bankruptcy, and the actual assets eventually became owned by those who later bought those assets for pennies on the dollar, in bankruptcy auctions.

      Some companies owned fiber routes that they didn’t even bother using, and in the early 2000’s there was a shitload of dark fiber scattered throughout the United States. Eventually the bandwidth needs of near universal broadband gave that old fiber some use. But the companies that built it had already collapsed.

      If today’s AI companies can’t actually turn a profit, they’re going to be forced to sell off their expensive data at some point. Maybe someone else can make money with it. But the life cycle of this tech is much shorter than the telecom infrastructure I was describing earlier, so a stale LLM might very well become worthless within years. Or it’s only a stepping stone towards a distilled model that costs a fraction to run.

      So as an investment case, I’m not seeing a compelling case for investing in AI today. Even if you agree that it will provide value, it doesn’t make sense to invest $10 to get $1 of value.

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      • Tollana1234567@lemmy.today ⁨4⁩ ⁨hours⁩ ago

        dint microsoft already admitted thier AI isnt profitable, i suspect thats why they have been laying off in waves.

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    • chobeat@lemmy.ml ⁨21⁩ ⁨hours⁩ ago

      there’s an argument that this is just the targeted ads bubble that keeps inflating using different technologies. That’s where the money is coming from. It’s a game of smoke and mirrors, but this time it seems like they are betting big on a single technology for a longer time, which is different from what we have seen in the past 10 years.

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    • obbeel@mander.xyz ⁨19⁩ ⁨hours⁩ ago

      Proof: Agentic AI is worthless.

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    • shalafi@lemmy.world ⁨15⁩ ⁨hours⁩ ago

      Sort of agreed. I disagree with the people around here acting like AI will crash and burn, never to be seen again. It’s here to stay.

      I do think this is a bubble and will pop hard. Too many players in the game, most are going to lose, but the survivors will be rich and powerful beyond imagining.

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      • Tollana1234567@lemmy.today ⁨4⁩ ⁨hours⁩ ago

        the fallout is they laid off to many tech workers to recover from thier companies financially.

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  • McLarny@lemmy.world ⁨1⁩ ⁨day⁩ ago

    So is it smart to short on the ai bubble ? 👉👈

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    • bigfondue@lemmy.world ⁨19⁩ ⁨hours⁩ ago

      The market can remain irrational longer than you can remain solvent.

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      • Dogiedog64@lemmy.world ⁨17⁩ ⁨hours⁩ ago

        Yup. If you have money you can AFFORD TO BURN, go ahead and short to your heart’s content. Otherwise, stay clear and hedge your bets.

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    • whyrat@lemmy.world ⁨19⁩ ⁨hours⁩ ago

      The question is when, not if. But it’s an expensive question to guess the “when” wrong. I believe the famous idiom is: the market can stay irrational longer than you can stay solvent.

      Best of luck!

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  • 9point6@lemmy.world ⁨1⁩ ⁨day⁩ ago

    I didn’t have the US becoming a banana republic on my bingo card tbf

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    • acosmichippo@lemmy.world ⁨1⁩ ⁨day⁩ ago

      why not

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      • aesthelete@lemmy.world ⁨19⁩ ⁨hours⁩ ago

        Yeah ten years seems like plenty of notice

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  • brucethemoose@lemmy.world ⁨1⁩ ⁨day⁩ ago

    Open models are going to kick the stool out. Hopefully.

    GLM 4.5 is already #2 on lm arena, above Grok and ChatGPT, and runnable on homelab rigs, yet just 32B active which is mad. Extrapolate that a literally bit, and it’s just a race to the bottom.

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    • dubyakay@lemmy.ca ⁨1⁩ ⁨day⁩ ago

      I did not understand half of what you’ve written. But what do I need to get this running on my home PC?

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      • brucethemoose@lemmy.world ⁨22⁩ ⁨hours⁩ ago

        I am referencing this: z.ai/blog/glm-4.5

        The full GLM? Basically a 3090 or 4090 and a budget EPYC CPU. Or maybe 2 GPUs on a threadripper system.

        GLM Air? Now this would work on a 16GB+ VRAM desktop, just slap in 96GB+ (maybe 64GB?) of fast RAM. Or the recent Framework desktop, or any mini PC/laptop with the 128GB Ryzen 395 config.

        You’d download the weights, quantize yourself if needed, and run them in ik_llama.cpp (which should get support imminently).

        github.com/ikawrakow/ik_llama.cpp/

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      • tomkatt@lemmy.world ⁨1⁩ ⁨day⁩ ago

        You can probably just use ollama and import the novel.

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  • Vinstaal0@feddit.nl ⁨1⁩ ⁨day⁩ ago

    Not only the tech bubble is doing that.

    It’s also the tech bubble ow and the pyramide scheme of the US housing sector will cause more financial issues as well and so is the whole creditcard system

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  • Doomsider@lemmy.world ⁨1⁩ ⁨day⁩ ago

    Ooowee, they are setting up the US for a major bust aren’t they. I guess all the wealthy people will just have to buy up everything when it becomes dirt cheap. Sucks to have to own everything I guess.

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  • sbv@sh.itjust.works ⁨1⁩ ⁨day⁩ ago

    Recognizing from history the possibilities of where this all might lead, the prospect of any serious economic downturn being met with a widespread push of mass automation—paired with a regime overwhelmingly friendly to the tech and business class, and executing a campaign of oppression and prosecution of precarious manual and skilled laborers—well, it should make us all sit up and pay attention.

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    • Doomsider@lemmy.world ⁨1⁩ ⁨day⁩ ago

      Your kids will enjoy their new Zombie Twitter AI teacher with fabulous lesson plans like, “Was the Holocaust real or just a hoax?”

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  • altphoto@lemmy.today ⁨1⁩ ⁨day⁩ ago

    So what sound should it make when this bubble pops?

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  • stm@lemmy.dbzer0.com ⁨1⁩ ⁨day⁩ ago

    propo dabogda

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