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The AI hype bubble now represents something like 20-30% of the stock market depending on who you ask. For reference the great depression started with a 24% dr
by citizenpaul 1y ago
The AI hype bubble now represents something like 20-30% of the stock market depending on who you ask. For reference the great depression started with a 24% drop of the stock market. The people running this AI game know there is 0% chance the government will let this play out naturally because it would cause another great depression. Bailout Guaranteed.
The plebs can take some inflation,higher taxes and national debt increase for the hucksters to get some yachts and lambos. I mean what were you going to do with that money? Feed your family? Pay rent? Jeeze get a life....
In this round of con there is not even a way for an average pleb to get any scraps since the AI bubble is almost completely hidden behind private equity. Except maybe Nvidia stock.
The bubble is starting to froth/pop IMO. An incestuous cycle of players propping each other up with circular investments(ie I'll loan you money to buy my product so I can sell it to you) began last month with Nvidia "funding" OpenAI datacenters. Actions like that mean they are out of external ways to keep shuffling the debt. Like when WeWork CEO started loaning the company its own money to buy its own product to rent.
Edit: Oh $hit AMD just did the same thing with a circular funding deal with OpenAI. https://news.ycombinator.com/item?id=45490549 https://news.ycombinator.com/item?id=45490549 Channel Stuffing Money printer go brrr. I can't belive there is even discussion if there is a bubble at this point. Its literally wolf of wall street "Never let them cash out that makes it real" style deals all over the place.
- Zigurd 1y agoAI isn't the only component of the bubble. SpaceX which has a genuinely successful business with Falcon 9, is also a huge bubble. SpaceX launches an amazing 25 times as many rockets as ULA in a year. But 2/3 of those are Starlink launches. No outside revenue. And SpaceX is valued at about 200X the valuation of ULA.
- cantor_S_drug 1y ago> I'll loan you money to buy my product so I can sell it to you. I predict this will happen among Nations as well. US will provide money to Japan so that Japan can invest that money in US (at Trump's discretion) so that everything is kosher.
- kagakuninja 1y agoThat is what traditional US foreign aid was all about. We give money to allies, they buy our military hardware or farm products. Trump of course has shit all over the system, so who knows what we are going to do now. We also give out tons of subsidies and tax breaks to lure foreign investment to the US.
- ethagnawl 1y ago> An incestuous cycle of players propping each other up with circular investments Of course I'm reminded of today's announcement about the strategic partnership between AMD and OpenAI which caused AMD's stock price to jump a whopping ~35%.
- vanviegen 1y ago> now represents something like 20-30% of the stock market > the AI bubble is almost completely hidden behind private equity How are both of these statements true?
- citizenpaul 1y agoThe AI hypy has inflated the values of the "magnificent seven". Meta,MS,Appl, Amzn, Nvidia ect. Retail and various professonal investment chasing indirect investment in AI,ie MS owns almost half of openai. Also 401k rebalancing. Are driving the valutation of those public stocks to very unbalanced valuations with zero increase in business. Its complicated. Though you could argue its all good business. But first buy my swampland in florida please.
- JohnnyMarcone 1y agoAren't you saying it's not hidden behind private equity then?