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This is conjecture, but I'm fully expecting a correction, if not a recession. Fortune 500 has gone all-in on AI and set high expectations for increased efficien

This is conjecture, but I'm fully expecting a correction, if not a recession. Fortune 500 has gone all-in on AI and set high expectations for increased efficiency. So far, that boost has not come, but Wall Street has been patient. But if you fast forward a few quarters, I wonder if investors will lose their patience and wonder why we're all still burning cash. BTW, I'm long-term bullish on AI, I just think companies have gotten over their skis in the short-term.

danielfalbo 1y ago
+1, just like the dot-com bubble
orky56 1y ago
The high concentration of tech companies that are spending on AI are also the ones controlling the narrative including the funding, success criteria, and communication. We are more likely to see minor corrections that effect individual companies but don't impact the market enough overall.
- turnsout 1y ago
  Tell that to their actual customers. At some point, State Farm or Eli Lilly is going to say "hey, we spent $1B on AI and fired 10,000 people. Where's all that efficiency you promised?"
  - nradov 1y ago
    At some of those companies, many of the laid-off employees weren't adding any value. So efficiency will increase even if AI has zero effect.
    - turnsout 1y ago
      Guess we'll find out!
- nenenejej 1y ago
  That first sentence sounds so like 2008-land. House of cards is a house of cards. If 1 + 1 = 2, the market will discover it. The 1 + 1 = 3 narrative can only be controlled for so long.
wilkommen 1y ago
I think that the Fortune 500 is so invested in AI that AI has potentially become "too big to fail". There are increasing political and financial connections between big tech and the executive branch as well. As long as the Trump administration is willing to backstop any backslide on AI, things will only continue to go up. And there's no guarantee that Democrats would take a significantly different stance.
- justin66 1y ago
  What does it mean to "backstop" an AI company whose products no longer appeal to people? It's reasonably clear what it means to backstop failing financial institutions and so on. Not clear on how the concept applies to Microsoft or Nvidia or something.
  - nradov 1y ago
    The US federal government already took an equity stake in Intel so they might do the same with other key tech companies.
- nenenejej 1y ago
  Trump may be willing but is he able? The US economy isn't unsinkable, or have infinite money to borrow or even print. I am not sure Trump is that tech co. friendly either and he is definitely not consistent and can turn at any time.
  - nradov 1y ago
    For the next three years, the Trump administration can borrow or print an effectively infinite amount of money. Then cleaning up the mess through an austerity program will become someone else's problem.
    - nenenejej 1y ago
      They might but they are not immune from global markets that are watching their moves closely. Those markets determine bond yields and currency exchange rates. Although the market can be irrational longer than Trump needs to stay in office.

danielfalbo 1y ago

+1, just like the dot-com bubble

orky56 1y ago

The high concentration of tech companies that are spending on AI are also the ones controlling the narrative including the funding, success criteria, and communication. We are more likely to see minor corrections that effect individual companies but don't impact the market enough overall.

turnsout 1y ago
Tell that to their actual customers. At some point, State Farm or Eli Lilly is going to say "hey, we spent $1B on AI and fired 10,000 people. Where's all that efficiency you promised?"
- nradov 1y ago
  At some of those companies, many of the laid-off employees weren't adding any value. So efficiency will increase even if AI has zero effect.
  - turnsout 1y ago
    Guess we'll find out!
nenenejej 1y ago
That first sentence sounds so like 2008-land. House of cards is a house of cards. If 1 + 1 = 2, the market will discover it. The 1 + 1 = 3 narrative can only be controlled for so long.

wilkommen 1y ago

I think that the Fortune 500 is so invested in AI that AI has potentially become "too big to fail". There are increasing political and financial connections between big tech and the executive branch as well. As long as the Trump administration is willing to backstop any backslide on AI, things will only continue to go up. And there's no guarantee that Democrats would take a significantly different stance.

justin66 1y ago
What does it mean to "backstop" an AI company whose products no longer appeal to people? It's reasonably clear what it means to backstop failing financial institutions and so on. Not clear on how the concept applies to Microsoft or Nvidia or something.
- nradov 1y ago
  The US federal government already took an equity stake in Intel so they might do the same with other key tech companies.
nenenejej 1y ago
Trump may be willing but is he able? The US economy isn't unsinkable, or have infinite money to borrow or even print. I am not sure Trump is that tech co. friendly either and he is definitely not consistent and can turn at any time.
- nradov 1y ago
  For the next three years, the Trump administration can borrow or print an effectively infinite amount of money. Then cleaning up the mess through an austerity program will become someone else's problem.
  - nenenejej 1y ago
    They might but they are not immune from global markets that are watching their moves closely. Those markets determine bond yields and currency exchange rates. Although the market can be irrational longer than Trump needs to stay in office.