What will come first; the AI bubble popping or a US civil war?
Guys but a very smart person on LinkedIn said they discovered the formula E = MC² + AI
How could it be a bubble if the universe depends on it?
I think that was satire. I hope. It’s honestly impossible to tell anymore.
You must’ve dropped this: /s
If I need to explicitly state that I do not believe the universe depends on “E = MC² + AI” I might as well stop using this website, there’s no way any reasonable person would read this as anything but sarcasm.
Have you not noticed just how many unreasonable people there are around you?
Are you calling me an unreasonable magnet? 🤨
Unreasonably magnetic 😉
It’s almost as if there’s an entire class of people who do this purposely, and walk away billions of dollars richer.
Gotta siphon up all the wealth and resources from the proles once every decade or so.
It’s almost as if the entire system is designed for this and cannot sustain itself otherwise… surely that’s not the case?
Don’t forget that the main players in this theater of hell are all paying each other with the same money in a circular bullshit toilet bowl further inflating the bubble.
https://www.wheresyoured.at/the-case-against-generative-ai/
A good read for anyone who wants to read in detail on how fucked it is.
"Here’s Why This Is Bad
I dunno man, let’s start simple: $50 billion a quarter of data center funding is going into an industry that has less revenue than Genshin Impact. That feels pretty bad."
-My favorite quote from this blog post
Everyone look out, the banks have made their money so it’s time to dump on the poors again.
rivals
I don’t remember spending $1.5T destroying 200,000 acres of farmland to build data centers for pets.com and GeoCities.
When there are 4 or 5 companies worth over a trillion dollars each, and those companies combine for 60% of the volume and value of the S&P and NASDAQ, and they are all in on ai, well…
Buy ammo, I guess.
No, buy puts.
“The market can stay irrational longer than you can stay solvent”
It’s not quite right to say those companies are “all in on AI” when their core businesses are still based on physical products and established services. These were already highly successful companies long before the AI boom. If their valuations are inflated because of the hype, a correction wouldn’t send them to zero - it would just bring their prices back in line with their actual underlying value.
Fair though “actual underlying value” is a bit of a fiction in general. There really no objective numerical value that is Inherent to anything.
No, but there is a price that people are willing to pay for something which is what economy is based on.
Isn’t it bigger than the subprime mortgage bubble by this point?
Substantially bigger, but that’s not the whole story. Subprime mortgages were interconnected to everything banks did. The AI bubble isn’t quite so connected in the same way.
Compare this to the Chinese property sector bubble. Around 2020/2021, there were a lot of stories about how China had created a huge bubble and was going to take down everyone when it popped. Instead, it just sorta fizzled out, at least from an outsiders perspective. China has usually kept away foreign investment in their real estate market (along with pretty much all their big companies). There just wasn’t that much fallout to be had outside of China. Tons of doom headlines popped up in Western media, but it was a nothingburger unless you were somehow embedded in the Chinese real estate market.
Let me be clear: the AI bubble popping will hurt. At this point, there’s no way out of it, and it needs to pop sooner rather than later. However, comparisons to the 2008 financial crisis don’t tell the whole story.
Yeah the financial crisis bankrupted the banks themselves. The structural foundation of the financial and banking industries were interconnected to bad mortgages that were distributed into financial instruments everywhere and speculated on like crazy by everyone, because they were mortgages and considered safe like bonds. Part of the reason why companies like GM went bankrupt was because their financial arm was significantly invested in mortgages, banks failed because their entire financial model was centered on mortgage returns, and people defaulted on houses en masse because they were allowed to get mortgages they were never able to afford.
But no one investing in stocks, particularly tech stocks, is doing so without explicitly gambling that money. A lot of venture capital might collapse, retail investors are going to get shit on, the general economy will slow as it does during a recession, but mostly this will play out like the dotcom bubble and be a large asset correction in the stock market. A few years of correction, consolidation of the industry, and everyone will pile onto the next bubble in a decade.
Wasn’t there some report that this is 17 times bigger than that?
“It’s a ‘good bubble’” - Bezos
All bubbles are good bubbles if you have the liquidity to survive the burst.
this wrong, it’s 4X bigger than sub prime crash.
