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Except it’s 17x larger & will take the entire US GDP with it.
The GDP issue is not because of the AI bubble, it’s because of tariffs and the complete destruction of US soft power abroad
And I would almost bet the crash will be about the time the Dems take power, just so the Republicans can whine about the situation they created and blame the Democrats for it.
Please let this happen.
doesn’t look a goddamn thing like the housing bubble
but the circles
Can confirm, circles look like bubbles.
This doesn’t really tell me anything, I’d have to compare it with other charts. E.g. what does the chart for agriculture look like? Airplane manufacturing? Internet in early 2000s?
I think it’s hard to definitely call something a bubble until it pops.
The definition of a bubble goes something along the lines of market prices exceeding the intrinsic value of the investment they represent, which may be true here?
If you want to read more about this the rough name for these companies was “the magnificent seven” a year or so ago when I last looked at this. A quick Google suggests represent about a third of the SNP 500’s value now and have a cape ratio (cyclicly adjusted price to earnings) of ~37 compared to 15-20 being normal.
I can’t find a good numerical source for the correlated risk within this group, and I suspect analyzing it is very difficult. Given they all used to be a lot more diversified in the past but now a large % of their valuation is predicated on AI historical correlation analysis probably fails. But the diagram linked here suggests it’s probably bad to put all your money in these companies. (Or even a 3rd if you are in an s&p 500 index tracker 😶)
Like, none of this definitively says this is a bubble, since if it were possible to divine that the bubble would immediately pop, but it does suggest there is a strong likelihood we are seeing a bubble.
All the economy is a big circle if you draw the circle big enough.
Actually scratch that. There is an economy that is not just one big circle jerk, such as the development of new technologies or the terraforming of deserts into fertile land; as neither of these things ends the way it started; it brought lasting change, and that is true progress.
Actually did you see my presentation that i made about this recently?
The point is to convince the americans to invest in new technologies.
To all those who say that human spaceflight is impossible:
There is no good economic reason to colonize other planets. We have plenty of space here on earth, with conditions already much more hospitable than that of mars - deserts, for example. The resources needed to turn these into habitable land is so much less than the resources required to make even a tiny part of Mars inhabitable (i.e. establish a colony that relies on life support systems) it’s insane to go for Mars first. The reason colonizing Mars is talked about at all is because a rich white dude wants to go to Mars, since deserts are too boring for his spoiled ass.
I actually agree that it would be cool if we went to Mars, not to colonize it but just to be there. But comparing it to white pillaging of the Americas is just incorrect. Mars is not inhabitable by humans, the Americas very much were. The external resources needed to colonize America were zero, in fact pillaging local lands meant a lot of resources for the Empire. Mars is going to be a much more expensive and much less profitable endeavor.
Actually I replied to you before, pointing out the very same fallacy: https://lemmy.ml/post/33824723/20134917
Europeans caused massive death in the Americas. I do not think we should replicate that model.
Also, the chance is small, but there might have been a separate biogenesis (beginning of life) on Mars. Sending humans with our dirty microbiome would almost certainly wipe any evidence of that, and possibly cause an extinction of an entirely separate form of life, which would be a crime even more horrible than the extinctions and genocides which we have caused so far.
Let’s just leave Mars alone until we’ve studies it more and are certain there is no life. Colonizing the moon seems challenging enough for a couple centuries…
Great point.
I’ll just wait for the movies to come out ten years later telling us exactly how they all lost our money again.
And no one with any influence will learn from it. Then it happens all over again
This is fine 🐶☕️🔥
Burn it all to the ground
But where is Palantir on this? Because they’re discernibly connected to several of these orgs, and that displays the character of what this is actually about.
More like the 2000s bubble.
So how dangerous is that really? I assume one day we’ll finally see investors saying, “Nah, that’s a bubble. I’m not gonna see any returns from those companies - I’m selling.” Then stock prices will fall, and some investors will lose money by selling for less than they bought. After that, AI unicorns will start to lose funding and close their businesses, laying off people.
But will I - a person who does not work in the AI industry and has not invested in AI companies - be affected by this?
Your pension is tied to these companies stocks. I can pretty much guarantee that “your” pension fund owns quite a few of these stocks.
But, and this is the important part, that isn’t your pension. It is the pension for those that are retired right now. There is no saved stack of money that you earned during your life thats waiting for you. Unless there is an equal amount of tax paying workers by the time you retire, you wont be getting that pension.
pension
I’m not sure how old you think most of us are, but I don’t think pensions are a common retirement vehicle anymore, and haven’t been for a while. 401k would probably be the modern equivalent, and it’s still running on the stock market for the majority of its life prior to beginning to withdraw.
Pension is the correct English term. 401k doesn’t mean anything unless you’re american.
One thing people didn’t mention is that I’m pretty sure the top 10% of Americans by income make up 50% of consumption because of the heavily K shaped revovery that has happened. These Americans have a large percentage of their wealth in stocks, and if the stock market crashes, they will feel less wealthy and less willing to spend, decreasing their spending, tanking the US economy.
Trump is a much bigger threat to tanking the US economy. He is working in that direction every day. Tariffs are horrible for the economy. Sure, he gets American factories built and jobs are created but things overall are going to be much more expensive for consumers.
I agree, but that’s just another factor, and it will also cause the stock market to crash, among other things.
Also, the worst thing is he won’t get American factories to be built. Maybe one or two, but no one in the right mind is going to relocate large amounts of manufacturing to the US when tariffs are coming in and out of effect all the time. Tariffs only work for increasing manufacturing if companies believe they will last a long time. If companies think a tariff will last a month or a year, there’s no point in making a factory that will take two, three years to build and then five years to become net profitable, because by the time the factories finished and the tariffs are gone, everyone that still has a factory outside of the US will just out compeat that factory with lower prices.
Boo hoo. Rich people become less rich.
You do realise that if 50% of consumption disappears then a lot of people from that 90% will loose their jobs as well. I don’t care about the 10%, I also think the income inequality in the US is insane, but the fact is that if AI stocks tank right now, poor people will feel it as well (much more so than rich people, because they can’t survive without a job and don’t have wealth as a safety net)
You are talking yourself into trickle down economics. There is now plenty of evidence that this isn’t true.
There is no need to protect rich people’s wealth so that the poor don’t suffer
And the poors lose their jobs but who cares lmao they should just eat cake
You are white knighting the poor to protect your own ass(ets).
Trickle down economics is bullshit
Yes, you absolutely will be effected.
In a general way, the plebs always do the heavy lifting - a universal truth since the dawn of time.
More specifically, your pension / 401k will lose a heap of money.
As the economy contracts there will be lay offs.
That means loan defaults, et cetera.
I don’t know the answer, but during 2008 onwards (seems like the economy didn’t fully recover until the end of Obama’s presidency), every industry slowed down. Was hard for me to get a fast food job or consistent minimum wage assembly line work through temp agencies. Things can go into vicious positive feedback loops during downturns (investors afraid to invest due to bad economic outlook -> factories and such don’t get built or expanded -> unemployment rises -> people spend less -> companies start laying off -> economic outlook worsens -> investors selling and moving to "safer’ assets -> …). The entire banking system pretty much imploded during 2008; I don’t know how much exposure banks have to AI (commercial real estate is another thing to worry about though). With any luck the AI crash would be more like the dot-com crash, which mostly just hurt one industry (but I remember my father talking about factory layoffs during that too).
Pension funds are to a large extent exposed to the stock indices. Since these companies grow and grow in valuation, a larger portion of pension funds are exposed to these companies. The so-called “magnificent seven” make up about 35% of the US stock market now. A lot of people will see a large portion of their pension savings affected by this. If you are not a US citizen, you sre still likely exposed to these companies.
Were you affected by the dotcom bubble?
Maybe the remaining tech companies, such as Microsoft and Nvidia, might raise prices of their products to cover the losses.
nvidia cards would cost as much as a good used car.
I dont think we are in a bubble and I think all the media posts about it are just trying to make people sell their shares.
Sure there is no obvious profit yet but there will be. Once people start using AI in their phones and ask it questions, everything from baking to coding becomes way easier since its an interactive conversation, not a search result.
People will pay for that convenience since its a huge downside to not have access to it. Search results now seem very limited to me since I cant find out more about what its saying.
I’m so glad you AI people are so vocal and open about it, makes it super easy to filter dumb people out. If you think LLMs are impressive, it just shows how little discerniment you have.
Typical dumb response of “you are stupid because you dont think what I think”. :)
Oh no, no no, people can disagree with me all the time. It’s a good sign.
You’re stupid because you like AI.
Lol ok. :)
Literally the entire point of searching something is to open up the links and find out more about what it’s saying… Do you need your AI to come up with the search queries too???
Its not interactive. Did you read my comment?
If you dont understand why people are going to pay for that, I dont know what to tell you.
Thats literally the entire thing about Ai, you can have a conversation, not static text and links.
The technology (at least with current methodologies) is flawed: that’s why people are warning of the bubble bursting. We can’t properly scale LLMs on our current grid in the same capacity as China. Our technologies are also incredibly energy-intensive compared to their technologies.
There is no intelligence, the hallucinations are likely fundamental, the cases of people being given dangerous or harmful advice are rising, human AI psychosis is a real concern, the sycophancy/bias confirmation is still present, and major actors in the AI space are existentially afraid of any form of regulation of the technology/industry (which does not signal confidence).
Also, it’s critical to factor in the whole copyright issue with training data… one domino is all it takes to collapse the whole thing.
These things will evolve and change and improve, as always. When the first car was invented, there wasnt any proper roads for cars. Things change.
Copyright issues are not going to be an issue at all when entire countries are trying to get first to AGI. Nobody cares about that.
Hallucinations are flaws that will eventually be fixed, and the more gpu power that is available, the easier it will be to fix.
Are you personally invested in the AI/LLM space? I’m wondering why you chose to engage with very few of my arguments. Is your account a troll account? If you’re not trolling: re-read. I will not engage further until you adequately address my points.
I was pretty clear: there is no intelligence. AGI is an absolute pipe dream and it will also be a far cry from actual intelligence if you look into it. Hallucinations won’t be fixed unless the technology evolves - adding more GPU power won’t be able to fix it.
The copyright theft is an extreme issue, regardless your hand-waving of it. Copyright law reform is not perceivably on the table. Major companies are caught red-handed stealing and these companies have no intention of compensating the rights holders they stole from.
they’re giving out ai memberships and trials constantly to try to get ppl used to it paying for it, hasnt worked, ngl I generate images ocsssionaly I like seeing random mashups sometimes, but id never pay for it if its free and fast why not, I was never gonna pay anyone to do it and im not selling anything, dont get why ppl get all pissy when ai is used for self entertainment
I think you are overestimating the amount people will pay for convenience or cling to their old ways.
Did e-readers kill the bookstore? Some people will always prefer to cook out of a book or dive into docs to write code.
Or look at the modern streaming landscape. In the beginning there was basically Netflix and everyone was fine paying that monthly fee for the convenience of streaming basically everything. Now we have 20+ vendors all charging for some subset of content. And we have seen a corresponding loss in subscribers as people hit the limit of what they are willing to pay for convenience.
It needs to burst into non-existence.
Everyday Ai
IS there a mundane, everyday Ai ?
License plate readers? Facial recognition? Speech recognition?
It’s objectively a bad thing when a country’s entire economy is being propped up by seven companies and the vast majority of consumer spending is concentrated in the top 1%.
Basically Dutch Disease.
I feel money itself is our new Dutch disease. We live and die according to the flux of money in the global economy/stock markets…
Are there any theories like that out there? Because money start to no longer function correctly IMO.
The most optimistic take I’ve seen: AI is a drain on the entire economy that sucks up all investment and this is why the rest of the economy is basically in a recession. Once the bubble pops, investors will flood back into the real economy and correct the problem.
I’m not optimistic.
I’ll play devil’s advocate here: agreed that the rest of the (US) economy seems to be slowing or shrinking but remains buoyed by AI / Mag 7 stocks. That said, a lot of the investment reflected above is in data centers and hardware (Nvidia, Coreweave, Oracle, Microsoft).
The bubble pop will hinge on whether there is value in this data center buildup beyond AI. Unless everyone starts paying fistfulls of cash for AI chat, these companies may be able to find another use for all that compute and avoid a total crash. That could be a target for all that investment you mention.
Can the AI bubble please suck up all the housing investment?
The way to make a big dent in that is to tax unused housing, with peogressivwly increasing amounts as they continue unoccupied. And limit or outright deny ownership by companies and investment firms.
We have more than enough housing for everyone, but a large portion of it sits unused. In many cases only because no one will/can pay what some of these companies are demanding monthly for them.
Specially when those companies are valued in TRILLIONS. Nothing is worth trillions, somehow these surreal numbers have been accepted as hard fact.
Nothing is worth trillions,
There is things worth trillions. Like full countries, and the largest pension funds and social security funds. Having a single company be comparable to those massive collections of people is insane, and it’s because they think it can replace workers–when it can’t, not yet, and not for a long time
Evaluations of everything is crazy. Net worth of celebrities with make up lines in particular is crazy. Look how many celebs are worth a billion dollars. To be worth that much, they should be selling at least $50 millions a year of product with no prediction of winding down.
Hahaha this is fine, I am fine with this, what could possibly go wrong
Yep it’s such a fragile situation
Looks more like the dot com bubble to me.
Is it just me, or are the bubbles coming closer together these days?
Global economy has inflation since what, middle of the last century? Since slavery and colonies stopped being a thing?
Yes! The problem is that we won’t accept the full correction that is actually required. We print money, we buy securities, we find ways to prop to reduce the pain but we end up shifting the weakness to other areas of the economy.
The amounts going around now are getting too big for a government to cover. Instead of too big to fail, they’re now too big to bail.
Nonsense. We can print an unlimited amount of dollars.
That sure sounds like “to save the economy, we need to destroy the economy”.
Well if they want to devalue the US dollar…that’ll do it.
Last time I checked gold and silver were at all time highs and the dollar was down more than 10% YTD.
Like tax paying individuals
Yep so now when it hits it’s going to be really bad.
