For those of you cheering for the AI bubble to pop…
AI investments now accounts for about 40% of the United States’ GDP growth in 2025, and AI companies are responsible for 80% of growth in American stocks.
…are you not scared shitless?
This is not the dotcom bust, and it’s far fucking worse than the 2008 housing crisis. And to think when I was young the Savings and Loan crisis was a big deal. We’re on the edge of Great Depression 2.0.
The best thing about this shit show is el spastico’s trade war having readied other countries for hard times and pushed them to diversify and make new trade deals. The US deserves its suffering completely, and now they will drag the world down less when they shit the bed.
I think you should only be scared if you own AI stocks and I would guess not a whole lot of common people can even afford to invest in stock. Let those rich idiots lose their money. Maybe they will learn a lesson
Unfortunately, stocks tend to move in sympathy with each other due to various factors, such as large ETFs and algorithmic trading. Natural price action is kind of broken at the moment.
It would be interesting to know how many resources this growth has taken from others places…
As for now it don’t seems that AI has generated a profit for the companies that bring it to the market and it seems it will not do it even in the near future, so I assume the question is: how many years can your economy be sustained by a sector that is not generating any revenue and is absorbing a monstrous amount of resources ?
We are not talking about a single company (like Amazon back at the time), do you really think that even when Ai will start (if ever) to generate profits these will be able to repay all the investements done today ?
do you really think that even when Ai will start (if ever) to generate profits these will be able to repay all the investements done today
First, actual investments that have been done are relatively modest. It’s still a substantial portion of TSMC fab capacity. All of the deal announcements for datacenters are 50x-100x growth. I doubt all of this capacity will be built for a long time. Coding/reasoning models can have more demand, but openAI (most of the deal announcements) is not that good at those. 100x power growth is also 200x every 2 years token output growth, and if models get better, users need less tokens by getting it right on fewer tries.
Second, they are losing money at current levels. Oracle leaked it lost $100m on existing AI datacenter operating losses. Coreweave is fully levered at 10% interest rates. Everyone is operating like social media startups from 10-20 years ago. Only revenue growth and market share, and being cool, matters. Enshittification will come much later.
Third, datacenters are fundamentally flawed, and local AI has competitive advantage to them. AI is good at datamining the datacenter traffic for output that could be profitable to steal.
Fourth, the only business model is US military and disinformation control. They will pay infinitity, and support infinity investment. Giant datacenters are about Skynet. Not market profits. That US government would protect their oligarch partners in stealing your ideas/llm outputs, and amplify current media’s messaging that anti-genocide views are treasonous anti-American sentiment.
how many resources this growth has taken from others places…
If all the money goes towards skynet, energy bills for everyone else will go up, including what little manufacturers there are in US. Insisting on war on China and Russia is helped by forced unemployment, and fascist response to the unemployed’s uppityness. Datacenter AI’s primary certain value is as a new cold war Arms and disinformation race.
FWIW, part of the OpenAI investment process is signing something to say that you understand that you’re unlikely to get any return on your investment and that you consider it more akin to a donation
Not framed like that. You have to acknowledge that investments can depreciate rather than appreciate and that you may lose your money, sure. That’s very different to saying that you acknowledge that you probably will lose your money and that you consider your investment a donation.
I think that this is just a technical difference based on what you are investing into.
A personal bank’s investement is a different thing than a investement in a startup, with different level of risks and revenue.
With a bank investement I get something back, even if less than what I invested. Could OpenAI pay back even half of what received ?
Which send us back to the starting point: what will happen when the VCs will start to ask for their money back or for their share of the revenue ? Inevitably the bubble will pop.
At the moment OpenAI can’t pay back anything, becuase they’re hemmorhaging money. Losing billions a year. And there’s no path to profitability.
That’s why they make investors confirm that they’re considering their investments a donation. That’s also why it’s unusual.
It’s not unusual for the opening phases of big tech companies to be “operate at a massive loss until the competition has gone out of business”, as companies like Netflix and Uber can attest, but it is unusual for that to be done where the investors aren’t expecting to make a profit.
the longer the bubble keeps going, the worse it will be… those of us convinced this is already a massive bubble believe the best time for it to pop was yesterday, the next best time is right now
Yea, the best thing for bubbles is to pop early and often before they start snowballing. These companies have negative net revenue and are burning billions. The tech is neat, but I don’t think text generators are going to completely revolutionize industries the way the industry is presenting them. NVIDIA giving OpenAI money to give to Oracle to give back to NVIDIA just screams house of cards.
Serious question: what if I am, and have no idea how to prep for it?
My pension and other things are tied up in stocks and such, if there’s a crash coming I’d think cash under the pillow would be better than stocks. But how do you do that, with your pension?
I moved the majority of my 401k allocations to international markets and have stopped contributing more than the match minimum. I’ve lost on some serious short term gains but I’m not risking holding the bag with my kid’s future.
I personally prefer to rip off the band aid than let it stink and get it infected. I’m scared for the time remaining before the pop. This shit is intolerable. Let it “pop”. Let it burn.
We’re fucked. No point being scared of something we have no control over. A few rich men will come out of this ahead, and the rest of us will fight over the scraps, lose our homes, and starve. 🤷♂️
Oh no, we won’t be able to afford houses or rent or save for retirement or- hang on just a second…
Wait, we already can’t do those things, and the last thing I want to do is, once again, validate the existence of people I would prefer to see in little pieces scattered all over the street for all the pain and suffering they’ve caused just to get a little more money on top of their billions.
Ok? And this is relevant how? I’m Canadian, so pretty tied to the US’s bullshit at the moment, but damn where’s this US bravery I keep hearing so much about?
You are right, but you are comparing apples with oranges here, what was the Great Depression economy contraction ? Or what was the unemployment rates in 2008 ?
Unemployment around the 2008 crisis peaked around 10%.
You’re delusional if you think the 2008 recession remotely compares to the impact of the great depression. You just have 0 frame of reference to compare. I say that as part of the most impacted group: I was just getting out of college when that crashed and it killed my job opportunities.
For those of you cheering for the AI bubble to pop…
…are you not scared shitless?
This is not the dotcom bust, and it’s far fucking worse than the 2008 housing crisis. And to think when I was young the Savings and Loan crisis was a big deal. We’re on the edge of Great Depression 2.0.
The best thing about this shit show is el spastico’s trade war having readied other countries for hard times and pushed them to diversify and make new trade deals. The US deserves its suffering completely, and now they will drag the world down less when they shit the bed.
No.
I’m too fucking stupid.
I think you should only be scared if you own AI stocks and I would guess not a whole lot of common people can even afford to invest in stock. Let those rich idiots lose their money. Maybe they will learn a lesson
Unfortunately, stocks tend to move in sympathy with each other due to various factors, such as large ETFs and algorithmic trading. Natural price action is kind of broken at the moment.
Absolutely, plus since index funds are cap weighted, ordinary retirement fund investing folks are very much vulnerable to it.
If I pull up VTSAX (vanguard total stock market index fund) what I find is…
Sectors: Technology is 38% of the fund and I see 11 sectors listed.
Top 10equity holdings, in order from the top:
NVDA MSFT AAPL AMZN META AVGO (Broadcom) GOOGL TSLA GOOG BRK.B (Almost like its own index fund)
This is fine!!
It would be interesting to know how many resources this growth has taken from others places…
As for now it don’t seems that AI has generated a profit for the companies that bring it to the market and it seems it will not do it even in the near future, so I assume the question is: how many years can your economy be sustained by a sector that is not generating any revenue and is absorbing a monstrous amount of resources ?
We are not talking about a single company (like Amazon back at the time), do you really think that even when Ai will start (if ever) to generate profits these will be able to repay all the investements done today ?
First, actual investments that have been done are relatively modest. It’s still a substantial portion of TSMC fab capacity. All of the deal announcements for datacenters are 50x-100x growth. I doubt all of this capacity will be built for a long time. Coding/reasoning models can have more demand, but openAI (most of the deal announcements) is not that good at those. 100x power growth is also 200x every 2 years token output growth, and if models get better, users need less tokens by getting it right on fewer tries.
Second, they are losing money at current levels. Oracle leaked it lost $100m on existing AI datacenter operating losses. Coreweave is fully levered at 10% interest rates. Everyone is operating like social media startups from 10-20 years ago. Only revenue growth and market share, and being cool, matters. Enshittification will come much later.
Third, datacenters are fundamentally flawed, and local AI has competitive advantage to them. AI is good at datamining the datacenter traffic for output that could be profitable to steal.
Fourth, the only business model is US military and disinformation control. They will pay infinitity, and support infinity investment. Giant datacenters are about Skynet. Not market profits. That US government would protect their oligarch partners in stealing your ideas/llm outputs, and amplify current media’s messaging that anti-genocide views are treasonous anti-American sentiment.
If all the money goes towards skynet, energy bills for everyone else will go up, including what little manufacturers there are in US. Insisting on war on China and Russia is helped by forced unemployment, and fascist response to the unemployed’s uppityness. Datacenter AI’s primary certain value is as a new cold war Arms and disinformation race.
FWIW, part of the OpenAI investment process is signing something to say that you understand that you’re unlikely to get any return on your investment and that you consider it more akin to a donation
I would think that this warning, in a way or another, is true in every kind of investment, even my bank’s personal investment have something like it.
Not framed like that. You have to acknowledge that investments can depreciate rather than appreciate and that you may lose your money, sure. That’s very different to saying that you acknowledge that you probably will lose your money and that you consider your investment a donation.
I think that this is just a technical difference based on what you are investing into.
A personal bank’s investement is a different thing than a investement in a startup, with different level of risks and revenue.
VCs typically want a return on their investments
With a bank investement I get something back, even if less than what I invested. Could OpenAI pay back even half of what received ?
Which send us back to the starting point: what will happen when the VCs will start to ask for their money back or for their share of the revenue ? Inevitably the bubble will pop.
At the moment OpenAI can’t pay back anything, becuase they’re hemmorhaging money. Losing billions a year. And there’s no path to profitability.
That’s why they make investors confirm that they’re considering their investments a donation. That’s also why it’s unusual.
It’s not unusual for the opening phases of big tech companies to be “operate at a massive loss until the competition has gone out of business”, as companies like Netflix and Uber can attest, but it is unusual for that to be done where the investors aren’t expecting to make a profit.
the longer the bubble keeps going, the worse it will be… those of us convinced this is already a massive bubble believe the best time for it to pop was yesterday, the next best time is right now
Yea, the best thing for bubbles is to pop early and often before they start snowballing. These companies have negative net revenue and are burning billions. The tech is neat, but I don’t think text generators are going to completely revolutionize industries the way the industry is presenting them. NVIDIA giving OpenAI money to give to Oracle to give back to NVIDIA just screams house of cards.
Just like the real estate market!
What? For my third once-in-a-lifetime economic crisis? There’s no way this isn’t going to suck. We’re all doomed no matter what.
You have no clue what “doomed” means if you think what’s coming compares to anything since the Great Depression and WWII.
The current leadership in the US is, uh, less than equipped to handle day to day functions, let alone a real crisis. It will be quite bad.
There weren’t any nuclear weapons on earth in 1930.
Serious question: what if I am, and have no idea how to prep for it?
My pension and other things are tied up in stocks and such, if there’s a crash coming I’d think cash under the pillow would be better than stocks. But how do you do that, with your pension?
I moved the majority of my 401k allocations to international markets and have stopped contributing more than the match minimum. I’ve lost on some serious short term gains but I’m not risking holding the bag with my kid’s future.
I personally prefer to rip off the band aid than let it stink and get it infected. I’m scared for the time remaining before the pop. This shit is intolerable. Let it “pop”. Let it burn.
We’re fucked. No point being scared of something we have no control over. A few rich men will come out of this ahead, and the rest of us will fight over the scraps, lose our homes, and starve. 🤷♂️
You have control, you just refuse to risk your lifestyle by exercising it.
Oh no, we won’t be able to afford houses or rent or save for retirement or- hang on just a second…
Wait, we already can’t do those things, and the last thing I want to do is, once again, validate the existence of people I would prefer to see in little pieces scattered all over the street for all the pain and suffering they’ve caused just to get a little more money on top of their billions.
Guessing you have no idea what the Great Depression was like. My parents grew up in it.
Great Depression: 30% unemployment
2008 crisis: 4.2% economic contraction
If you think modern America is bad now, boy oh boy, you’re about to get an education on how bad it can really get.
Ok? And this is relevant how? I’m Canadian, so pretty tied to the US’s bullshit at the moment, but damn where’s this US bravery I keep hearing so much about?
Deflection isn’t going to solve your problems.
You are right, but you are comparing apples with oranges here, what was the Great Depression economy contraction ? Or what was the unemployment rates in 2008 ?
Unemployment around the 2008 crisis peaked around 10%.
You’re delusional if you think the 2008 recession remotely compares to the impact of the great depression. You just have 0 frame of reference to compare. I say that as part of the most impacted group: I was just getting out of college when that crashed and it killed my job opportunities.
I don’t think it, I was only pointing out that he was comparing two different things.
I know that there is no way the two events have a compatible frame of reference but that does not means that you can compare the two values.