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These companies are spending more money than budgets of many countries enough to add 2+% to the US GDP so the amount of loss for if it comes all crashing down w

These companies are spending more money than budgets of many countries enough to add 2+% to the US GDP so the amount of loss for if it comes all crashing down will be huge.

YetAnotherNick 5mo ago
Loss to who? Now all of a sudden, we are caring about investors and sovereign funds? And I think we passed the threshold for crash down for AI, even if AI companies wont be that profitable. Nvidia/cloud providers will be profitable as long as there is demand for AI.
- dhosek 5mo ago
  Their loss, big deal. Let them suffer. The problem is that when they crash they bring a lot of other stuff down along with them. The people who lost money in the 2008 crash were not the ones who suffered the aftermath.
  - YetAnotherNick 5mo ago
    Because in 2008 ordinary everyday people invested in overvalued things like house.
    - dhosek 5mo ago
      It went beyond that. I didn’t own a house, but my employer, facing an economic downturn, laid off about half its employees.
      - YetAnotherNick 5mo ago
        Because house is part of economy. Crypto went from $4T market cap to $2T and no wide impact was observed. Same will be true for $4T AI market cap.
- rsoto2 5mo ago
  Uhh I think a lot of people and their families likely have investment exposure to nvidia/hyperscalers. if places like Amazon spent unrealistically on ai or their stock goes down massively that could mean major job losses too. If AI companies aren't that profitable...then they're going to stop spending so much money on GPUs to train AI models. A gigantic amount of Nvidia's profits would go bust overnight.
  - YetAnotherNick 5mo ago
    But inference is increasing dramatically. Google says they now do inference of 3.2 quadrillion tokens per month, 7x increase in a year. Claude code and others are here to grow even if they don't do any further training.
    - rsoto2 4mo ago
      .. so what? The cost(and size) to train models is also increasing and is still 60% of the cards that Nvidia is selling. Losing 60% of your most profitable revenue stream I think would do bad for a company regardless of how much inference is increasing "dramatically"(all this means is the GPUs are dead sooner and the cost to do this massive inference increases too)
- Mistletoe 5mo ago
  Almost every single person’s retirement has exposure to this unless they have some sort of Bitcoin/gold/small cap value type portfolio.
fsckboy 5mo ago
if these companies go bankrupt, they will have spent (not lost) all their money, the large amounts of money that they got from investors. That money generated profits for other companies they bought stuff from, and income for their employees, and capital gains for other people if AIco acquired other companies. the market cap of a company is computed by the current price of a company's shares, the last price paid; not all the shares of the company were bought at that price, the ones who got shares cheaper are showing paper profits, unrealized. Those who have already cashed out have money in their bank accounts that was transferred from people who wanted to get in. If the company goes bankrupt, their shares will be worthless, but the money they paid for them still remains in the accounts of people who sold their shares: the money was not lost even if some people lost money. I'm not going to keep going through it but the reason it works to value things the way we do is that the values are comparable and they frequently work out, so snapshots of the economy and the participants are comparable. But "losses" are not like taking gold and feeding it into some deep fold in the earth where it will disappear into the molten middle of earth. Stock valuations are "expectations for the future". Those expectations weren't money, they were lottery tickes where the lottery consisted of human creativity and human effort. People buying and selling share are moving real money around to trade the expectations. The money didn't go anywhere, it's still there, it's just that expectations for the future have been reduced. It all boils down to humans trading some of their time and potential on a bet that things work out. Some people's effort gets more rewarded than others. Not every team wins the world cup, but people like to play and like to watch.
- conradkay 5mo ago
  That's one way to look at it, though it feels like you could say the same about the dot-com crash or 2008 which isn't too helpful. At the very least (extremely high-paying) jobs can be actually lost
- idiotsecant 5mo ago
  This is way, way more neat and tidy than reality. When these stocks start to sink there is going to be an enormous evaporation of value from the overall market because people in riskier investments will get scared that other people will get scared. This will scare people with slightly safer investments, on up the line. Capital will dry up and velocity of money will drop. The market is not made by rational robots, it's run by barely sentient apes just minutes from reverting to crushing things with rocks. The markets run on vibes and fever dreams of hitting the next big thing.

These companies are spending more money than budgets of many countries enough to add 2+% to the US GDP so the amount of loss for if it comes all crashing down will be huge.

YetAnotherNick 5mo ago

Loss to who? Now all of a sudden, we are caring about investors and sovereign funds? And I think we passed the threshold for crash down for AI, even if AI companies wont be that profitable. Nvidia/cloud providers will be profitable as long as there is demand for AI.

dhosek 5mo ago
Their loss, big deal. Let them suffer. The problem is that when they crash they bring a lot of other stuff down along with them. The people who lost money in the 2008 crash were not the ones who suffered the aftermath.
- YetAnotherNick 5mo ago
  Because in 2008 ordinary everyday people invested in overvalued things like house.
  - dhosek 5mo ago
    It went beyond that. I didn’t own a house, but my employer, facing an economic downturn, laid off about half its employees.
    - YetAnotherNick 5mo ago
      Because house is part of economy. Crypto went from $4T market cap to $2T and no wide impact was observed. Same will be true for $4T AI market cap.
rsoto2 5mo ago
Uhh I think a lot of people and their families likely have investment exposure to nvidia/hyperscalers. if places like Amazon spent unrealistically on ai or their stock goes down massively that could mean major job losses too. If AI companies aren't that profitable...then they're going to stop spending so much money on GPUs to train AI models. A gigantic amount of Nvidia's profits would go bust overnight.
- YetAnotherNick 5mo ago
  But inference is increasing dramatically. Google says they now do inference of 3.2 quadrillion tokens per month, 7x increase in a year. Claude code and others are here to grow even if they don't do any further training.
  - rsoto2 4mo ago
    .. so what? The cost(and size) to train models is also increasing and is still 60% of the cards that Nvidia is selling. Losing 60% of your most profitable revenue stream I think would do bad for a company regardless of how much inference is increasing "dramatically"(all this means is the GPUs are dead sooner and the cost to do this massive inference increases too)
Mistletoe 5mo ago
Almost every single person’s retirement has exposure to this unless they have some sort of Bitcoin/gold/small cap value type portfolio.

fsckboy 5mo ago

if these companies go bankrupt, they will have spent (not lost) all their money, the large amounts of money that they got from investors. That money generated profits for other companies they bought stuff from, and income for their employees, and capital gains for other people if AIco acquired other companies. the market cap of a company is computed by the current price of a company's shares, the last price paid; not all the shares of the company were bought at that price, the ones who got shares cheaper are showing paper profits, unrealized. Those who have already cashed out have money in their bank accounts that was transferred from people who wanted to get in. If the company goes bankrupt, their shares will be worthless, but the money they paid for them still remains in the accounts of people who sold their shares: the money was not lost even if some people lost money. I'm not going to keep going through it but the reason it works to value things the way we do is that the values are comparable and they frequently work out, so snapshots of the economy and the participants are comparable. But "losses" are not like taking gold and feeding it into some deep fold in the earth where it will disappear into the molten middle of earth. Stock valuations are "expectations for the future". Those expectations weren't money, they were lottery tickes where the lottery consisted of human creativity and human effort. People buying and selling share are moving real money around to trade the expectations. The money didn't go anywhere, it's still there, it's just that expectations for the future have been reduced. It all boils down to humans trading some of their time and potential on a bet that things work out. Some people's effort gets more rewarded than others. Not every team wins the world cup, but people like to play and like to watch.

conradkay 5mo ago
That's one way to look at it, though it feels like you could say the same about the dot-com crash or 2008 which isn't too helpful. At the very least (extremely high-paying) jobs can be actually lost
idiotsecant 5mo ago
This is way, way more neat and tidy than reality. When these stocks start to sink there is going to be an enormous evaporation of value from the overall market because people in riskier investments will get scared that other people will get scared. This will scare people with slightly safer investments, on up the line. Capital will dry up and velocity of money will drop. The market is not made by rational robots, it's run by barely sentient apes just minutes from reverting to crushing things with rocks. The markets run on vibes and fever dreams of hitting the next big thing.