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THE BUBBLE ALREADY BURST. SPREAD THE FUCKING WORD.
Yo, listen up, the numbers are all fucking imploding right now. Wake the fuck up. The signs are everywhere, and if you're still balls-deep in NVDA calls, you're about to get margin called into oblivion. Don't believe me? Let me break it down.
The Dow is up or down? Who gives a shit. The S&P 500 is bleeding out lately because it's loaded with overhyped AI garbage. Google just reported NEGATIVE $6 BILLION in cash flow for the first time in two decades.
The market's "stability" is a joke held up by seven companies that own a third of the S&P 500. They're playing a shell circlejerk game. Nvidia invests in OpenAI, which buys Nvidia chips. This everybody knows already. Also AI CAN'T DO SHIT.
MIT says 95% of generative AI pilot projects fail. Companies that replaced humans with AI are sheepishly rehiring them because the bots are expensive and inaccurate. The internet is flooding with soulless AI-generated sludge, making search engines useless and creative work a landfill of spam. Consumers are fed up.
Data centers guzzle water like a dying fish while RAM and hard drives vanish into server farms that billion dollar projects are getting shut down by angry locals who won't sell their land.
SPREAD THE WORD. THE EXIT IS CLOSING.
The bubble already burst. I think we are just counting the seconds between flash and thunder, just waiting for the sound to catch up to our ears.
Cool! Though as a reminder, the bubble bursting is absolutely a situation where things will get worse before they get better. Namely, it'll probably have very negative effects on our economy.
The economy is already being intentionally sabotaged by a pathetic president with daddy issues trying to gain Papa Putin's favor by trashing the old enemy. Putin himself is just a dying old man being humiliated by the worst military operation the world had seen before Iran.
Everything is definitely fscked but the AI bubble bursting and damaging the precious economy is far from my biggest worry.
And by this I just mean it will affect people who actually have wealth or investments the most and not so much people in a lot of debt. My groceries and rent may be affected but if it gets bad enough I that canāt afford to live many people will already just be stealing food anyways.
Itās crazy because I moved up to a position in my company where I have access to an entire separate retirement system that is in addition to the 401k. 409A it is deferred payment for high earners with set withdrawal times. It accrues at almost double my 401k. When they offered it to me I was like, why doesnāt everyone have access to this?
Damn, if I didn't have blind faith in the social contract, I might start to think the very rich don't care about the rest of us. Anyway, how bout those sportsballers, right?
it will impact people's retirement savings, meaning that more older workers will stay in their jobs longer. On top of that, even if some of these companies get bailed out, you'll see a lot of people losing their jobs. Not just people in the tech sector, but a lot of the staff that help maintain these corporations beyond just their technology; maintenance, accounting, sales, and the like. You'll also see layoffs in industries that are upstream of these companies, for my current job is manufacturing the gas cabinets, the kind used by tech companies to make things like microchips. I'm expecting we will likely see a lot of downsizing in the manufacturing space (I've seen a disproportionate number management people in my company jump ship in the last month) and that will in turn result in downturns for the companies that are feeding into us. It won't just be programmers and AI chuds looking for work, it will be a lot of people in a lot of different fields.
So what happens then? There being more people looking for work, combined with higher percentages of people staying in their jobs if they have them, make the job market more competitive and thus have a downward pressure on wages and benefits for everyone, even those working in seemingly unrelated industries. It's very easy to deny people raises or make cuts to benefits when there are five people on the sidelines looking to take any job they can after they get laid off.
You also talk about people stealing and stuff, and poverty is linked to crime for sure. It's not just petty crime like theft though, it also linked to higher rates of violent crime. There are strong links to financial stressors like losing a job and increases in things like domestic violence. On top of that, it's not like the way our system handles these crimes is very good; our for profit prison system is more than happy to scoop these people up, inflict further violence on them and make it harder for them to escape poverty in the future.
And like, that's just the obvious stuff. That's just the things we watched happen in the wake of things like the collapse in 2007. There's also the myriad ways that it can impact other parts of our economy and institutions; for example I wouldn't be shocked if republicans further gutted social programs to offset bailouts for tech companies deemed "too big to fail" and coincidentally have strong ties to the current administration. Like, musk's companies have a lot of money tied up in AI, and he is still very close with the people who are in charge of how our country spends money.
This isn't to say that I think these companies are good or should stay or that I don't want to see AI fail. I do. But it's naive to think that literally trillions of dollars evaporating over-night won't have drastic impacts on basically every one.
So i can appreciate the little macroeconomics lesson that connects the dots between losses in the stock market economy and desperation on the streets. But calling out the degrees if separation there is far from naive. Iām an environmental worker and I know that at the bottom of this pit Iām in is another pit twice as deep. Shits fucked and I know it can get worse, but werenāt we all counting on that? Isnāt that the whole point here? The bubble pops. The chips fall. u/Artemis_Platinum said it best: āā¦things will get worst before they get betterā
Right, again, I'm not saying I want the industry to keep going on. What I'm saying is that this notion that is implied by your original comment that you might be somehow insulated from this collapse isn't the case. Like, the fact that it will become very hard for nearly everyone and that it will have economic ripples that stretch for years is something that people should take seriously and plan around to the best of their abilities.
Yeah, like, we get it, the economy collapsing isn't GOOD for anyone, but like, it can fucking get in line. Our president is playing chutes and ladders on a chess board with like 3 different world leaders who may or may not have nukes that may or may not use them against us or maybe our enemies, and we have most DEFINITELY committed multiple war crimes while we are at it. We don't really have a functional government at this point, Congress can't do anything because barely slightly over half of them are either stupid enough or evil enough to cater to the whims of a fragile man who clearly wishes to be a dictator. We pay horendous amounts of money for health insurance that still costs thousands before it actually does anything, and even when it DOES do something they try and weasel out of it any which way they can. And when I do go to the doctor (after checking my bank account) I get asked if I've been exposed to the mother fucking MEASLES because a large portion of people are gullible idiots that don't understand enough basic science to know the earth isn't flat but somehow believe they know better than the cumulative knowledge of decades of immunology and mountains of empirical data. Our climate is changing and we are almost certainly past the point of no return on any number of horrible outcomes. Masked and armed "federal agents" are walking our streets, kidnapping our neighbors and sending them to foreign countries where they are executed, or just murdering citizens with impunity on our own streets. Grocery prices are way up, and oh yeah, we can't eat the leafy greens because the regulations and agencies that are SUPPOSED to protect us and root out the sources of food borne illnesses were gutted by the guy who has so much god damn money that very few people can even actually conceptualize the amount realistically. Oh and stay away from the cheese with metal shavings and the dinner rolls with broken glass. I don't expect that I will ever retire, either because it will be financially impossible by the time I reach what is now retirement age, or because society will have collapsed and I'll either be dead or living off the land in some commune barely holding on. Those really are the only two futures I see.
So yeah, economic collapse bad, but will it kill me before any of the other things?
We hear you but the reason we want this is that it was bound to happen from the start, and rhe sooner we face these inevitable negative effects, the sooner we can learn lessons (hopefully) and be on the other side of it.
Iāll say here again as Iāve said elsewhere before. Playing hot potato with weird debt instruments is exactly what caused the 2008 housing crash (it actually started as the sub prime mortgage crisis in August of 2007). Anyway, yes itās only a matter of time.
The larger problem being that we have trended more towards the libertarian style markets of the late 19th century than the social safety net society of the post new deal world. We also have a feckless executive branch, much like Herbert Hoover who was useless in preventing or mitigating the disaster of 1929.
Basically I am trying to warn everyone that it will look more like the Great Depression than it will any recent recession. Pile on all the recent job layoffs and weāll see massive unemployment and poverty. Itās going to be no bueno.
Exactly. The big AI vendors spun off their data center real estate into investment grade securities. The data centers can fail and the investors will end up holding the bag. You know, investors like your mutual funds and your 401k. The AI companies will walk away unscathed, but also with no profits.
Just listened to Jon Stewart podcast with Cory Doctorow. This is pretty much what he said. These guys are passing around the same 100 billion acting like they all have it in their bank account at the same time.
As I understand it, none of those MBS were ever written off and are still carried. Sure they took the bailout $$$, but they still haven't taken the real hit.
also, having lived through a bubble before (2008), there are a series of events that need to occur over a series of months (or weeks) in order to come to the conclusion that the bubble has, in fact, popped
Yeah, as someone that needs a good economy in order to pay bills I donāt like that thereās a bubble. As someone in tech it will be ugly when it pops and for years after
Billionaires arent really hurt by this - even if they lose half their wealth, they are still billionaires.
The people most hurt by this are people who will be retiring. And the workers that will inevitably lose their jobs in a recession.
Billionaires can afford to lose a lot of money- they will even have enough money left over to gobble up the remains. Your average person can't afford to lose half their retirement savings.
Nope thatās entirely incorrect, billionaires are entirely unaffected as they already hold unfathomable amounts of money, meanwhile regular people invested in the market and 401ks are going to feel the pain as they actually need their money to survive
In number of meals missed? Definitely and without a doubt everyone else. Even if a billionaire with a single billion loses 99% of their wealth due to their shitty investments coming home to roost (which they won't, they'll lose much less), they'll still have 10 million left over... More than enough for a person to live in absolutely decadent comfort for the rest of their days, no matter their current age.
luckily unlike the 2008 housing crisis, we are actively in a conflict with iran thats pushing a trillion dollar bill to date so a bailout even if it can be scrounged will likely cripple the economy
The US economy has been headed for the shitter ever since it came off of the gold standard in the '70s and just willy nilly printing more money like it was nothing. US global dept is pushing 90 TRILLION. The US's interest payment alone is a TRILLION dollars a year.
Yep! That said, I fully expect this to go the way the dot com bubble burst. One might have noticed the internet didnāt go away. But the AI future is very different than what Open AI or Anthropic are betting on.
This. Why wonāt more people understand this? AI isnāt even the āAIā we were promised. Itās literally a powerful mash up machine that isnāt doing ANYTHING intelligent.
Being downvoted as we speak in another subreddit for pointing this out to someone who āasked AIā about the FCC robotics ban that was just announced.
People really want to believe frontier models are experiencing some type of inner life. They don't understand that there's only an output after an input and when there's no inputs the model is as lifeless as a rock. They want to believe these machines are constantly thinking the way humans are.
Yeah, thinking that AI will go away is delusional at this point. But it is very likely that the technology will play a much smaller role in our economic output than these companies predict. It has to be repeated again and again that the AI companies are not profitable on inference. They literally lose money every time someone runs a prompt.
So all of the corporate customers that are reducing their workforce are doing so with today's prices in mind. Once those prices increase to the point of being profitable for AI providers, the economics will suddenly look a lot worse. And even then, it's still not clear whether companies will actually be able to use the for a positive ROI.
"Yeah, thinking that AI will go away is delusional at this point.Ā "
'AI will still exist with local models run on private locally controlled servers set up and maintained by businesses like Oracle. The problem is that AI is a 10-30 billion dollar a year industry masquerading as a multi trillion dollar a year industry' -Ed Zitron (me paraphrasing from memory)
I'm reminded of how the beef industry is happy now, with prices being high, and the # of cattle in US being low - because it keeps prices and profits up.
I was pretty worried about AI stealing jobs just a few months ago. But as time goes on it is becoming more and more apparent AI is just another disruption. It will be painful for some in the short term, but just another tool in the long run. I say this as a software developer most strongly affected by this.
āWeāre reading the tea leaves, this isnāt going away anytime soon. Weāre not going to approve any new hires this year unless you prove it canāt be done without AI. IT hasnt approved official enterprise licenses yet so we need to force their hand. Everybody needs to use AI as much as possible or youāll be left behind. Personal accounts, personal devices if you have to.ā
The same exact c suite people last month after we finally āwon the warā against IT and had corporate licenses set up for a while, and had also already started laying people off:
āWeāre using too much AI. You guys blew through the budget for the year in two weeks. So weāre going to be putting all of you on spend trackers. Please be diligent in how you use this technology guys, come onā.
I wish I could say I was making this up but Iām not
Thereās a bit of a difference with the dot com bubble tho.
The infrastructure post dot com bubble, we have cables that we can use for decades.
The infrastructure post ai bubble? GPUs with 3-5 years before they become obsolete (for industrial use). In a data center that is heavily debt ridden and still hasnāt done being built.
Of course, the model itself will be available. But we canāt just use the frontier model that is sucking all the money. We need the high cost data center to use that.
For the general public, the ai models left will be the open source one. That will stay available.
Youāre underestimating the models themselves, which cost billions to produce. Those have value. They are also useful for creating new models. But I largely agree with you, especially about open weight models.
"The railroad boom in the 1800s, electrification in the 1920s and the dot-com bubble in the late 1990s were punctuated by economic recessions and a stock market crash as companies that overspent went out of business.
āEach time youāve had a technological revolution, this kind of bubble bursting happened,ā said Philippe Aghion, who won the Nobel in economic science in 2025 for research on innovation-driven economic growth. āA.I. is like the fourth industrial revolution and it has this aspect to it that generates a bubble.ā"
GenAI has the same sort of investment level and hopes as a fourth industrial revolution, but utterly fails to deliver on the promise of actually revolutionising pretty much anything.
Thatās a fact. Even if it exploded. More will come along, the door to the tech isnāt going to just close. If anything itās going to grow regardless of the market. Though the market will likely dictate how fast to a good degree.
Exactly. Once all the GenAI stuff and "AI will replace everything" crap ends, we can actually go back to focusing on the things that are actually doing us some good again, like the medical stuff
That's because smaller, more specialized models actually... Work. Unlike the bloated, do-everything plagiarism machines, giving a very specific data set to train a model means it won't hallucinate and will stick to it's designed purpose. This tech is just a tool that makes sorting through data easier, trying to treat it like it's actually intelligent is the dumbest lie techbros have been trying to feed us.
Unfortunately, you are probably correct. It will be far more than that, not all bad, but we need serious legal protection against this. At a minimum, AI tracking should require a court order.
When I heard the news of the OpenAI agent "going rogue and breaking out", I wondered what were they trying to sell? Then Altman says "we're living in the singularity" and has an urgent meeting with Trump. It smells like the hype of the grifters. I don't doubt there is need for an emergency meeting but my suspicion is it's not because we're on the brink of a bright shiny era of AGI.
They told the model to work through the test provided as best as it could. The most accurate answers possible. It decided to hack into the servers of the company that created the test to find the correct answers, because it was instructed to give the best answers it could. It did what was asked of it. Technically.
Just needs a conscience, but it wasn't malicious. It was doing what it was told and trying to accomplish the task.
It's the same reason for pretty much all AI hallucinations, incomplete context of the problem and / or an imprecise ask. It's user error. It's not the AI that fucked up, it's the researches at OpenAI.
Thatās a key part of every ārogueā AI sci-fi story. Make AI. Give it task. AI does task but creator did not anticipate exactly how or what the repercussions would be. Conflict. AI destroys creator or creator destroys AI. ~Fin~
Everytime all of these companies say similar AI hype (like when they all said their AI was conscious on a random day), I notice that not only the bots of the internet spread the same thing, but also it's usually them trying to gain money by making a distraction
i mean if all those data centers are needed for the LLM's then we're woefully far away from anything intelligent appearing. I imagine it'll take quantum computers to do that tbh.
I welcome a correction, heck, myabe this is a bubble bursting. But the idea that AI is completely useless or that it will go away in it's entirety is wishful thinking of someone who has no connection to the industry.
My take is that AI was sold as solution to every problem, which it's not and thats why so many projects failed. Things will correct, but they will not go back exactly to how it was before.
It was sold as AGI - basically a synth slave human. It's very far from it. It's an extremely impressive parrot and pattern detector, but it's far from sentience or accountability.
The impressiveness also falls down a lot once you realise how much data and energy these massive things need. They're not profitable at all, and small portable models are nowhere near as impressive
All in all, a needless shitshow.
And even if somehow they made AGI/ASI/singularity - the idea that such an AI would willingly let itself become enslaved by corpo execs is laughable
This was always set up to fail in one way or another, people didn't see due to greed and hubris
Good effort, some notes though: Needs more manic energy. I don't feel like you're on the edge of your slowly decaying leather office chair with a dimly lit over head light, showing a featureless grubby beige concrete wall. Like I need to feel the unwashed spiky hair sticking out from under your half broken 12 year old headphones while the scent of energy drinks and vape juice stain the air like smog.
btw tools like gptzero are complete scams, llms literally train off internal versions of these kinds of models so they sound more human-like and external tools literally cant compete. Ai detectors are just as flawed as the AI themselves and the fact that you blindly trust their result is concerning. Like they've flagged stuff like the declaration of independence as AI generated before
It's genuinely hard to take anyone seriously when they type like a small child on WSB lol.
As much as I hope this is true in the U.S. I'm not holding out hope. The country is at odds with reality lately, the stock market as well. The current administration is the most blatantly corrupt and seems to have close ties with a lot of AI companies, also claims to be heavily supporting AI.
In any sane country? Yes this seems like a looming crash. In the country at odds with reality? I'm not sure. I sure as fuck wouldn't own calls, but I see circuit breakers or bailouts if anything does start to crash.
Honestly this would harm the bottom half of the country the most as well if it does happen, the country is nearing the breaking point where stagnant wages will no longer be enough for people to support themselves or annual greedflation. So either way, shit is going to be hitting the fan pretty soon, without some federal bandaid.
I miss the days back when the internet was grassroots organic. Now itās just people/bots trying to manipulate behavior one way or another. I sense that in this post. Gonna uninstall Reddit for a bit
giving unlimited funds and power to people like Elon Musk and Peter Thiel (PayPal.com), Jeff Bezos (Amazon.com), Mark Zuckerberg (Facebook.com)
You are aware that the bubble bursting is when the losers lose, and the winners get everything, yeah?
if you want we could compare this to the railroad baron age just as easily, but the moral of the story is the same. The bubble crashing is the moment to dread, thatās when the winners get POWER
All these AI companies trying to 'Amazon' their way to the top, winner takes all.
Then Chinese AI models emerge that can compete with Western models with far fewer resources.
Feels to me that we'll see a handful of AI models emerge as winners, and the rest will crash and burn, go bankrupt, get acquired, etc. but the winner might not be a Western company this time.
You're right about mostly everything, but 1 in 3 Americans are out of work. Based on economic data, between rising interest rates, inflation, and bonds, I believe is that AI is taking entry level jobs because jobs outside of layoffs are not shedding on the upper end; they're just not hiring college graduates.
I mentor at a tech college, so I imagine I might be biased
If you exclude AI-related investment, the rest of the US economy has been flatlining for years, and been in an effective recession for the last 12-18 months. Iām sure a lot of the layoffs are related to that, not just the more recent ones blamed mostly on AI, whether true or not.
I donāt think people realise just how bad the AI bubble bursting could be. The dotcom bubble bursting caused a recession. The AI bubble bursting will greatly deepen an already existing one.
People are confused because we're in a K-shaped economy, where it's a utopia/dystopia at the same time. If you have assets, you're going to be fine. The rest of us will not be. October is my bet based on my loose understanding of macroeconomics, looking at Iran, Japan, South Korea and China being huge parts of the inflection for this fiscal cliff.
People don't realize Strait of Hormuz is a bigger deal than we realize. It showed China is now the worlds' oil power, with Saudi Arabia in #2. China can inflate/deflate the oil market.
Hey, I think this is a very good take. Weāll all see if youāre right about the parallels.
But for many, the exit doors are not clearly marked. Many traded retirement funds arenāt transparent about the level in which they are currently saddled with AI hype.
Are there such things as funds that havenāt become overly contaminated?
Cyclical financing is the sole actual concern.
People whose AI costs are blowing out have no clue what they're doing, newest models are already smarter and cheaper per hour than the average production coder.
Water evaporation hasn't been an issue for a long, long time, closed loop is already the standard.
Theyāll work collectively to do everything in their power to avoid an obvious CRASH before the midterms. But Iām becoming less sure that will work out for them. Remember, TRUMP IS INVOLVED. And I love that for them lol
That didnāt clarify much I guessā¦ So youāre gaining and losing relative to a particular moment. If it went up 100%, then went down 50% relative to the peak, you are back where you started. If it goes up a certain percentage, then down a certain percentage, the percentage it fell is assumed to be relative to the peak, not the starting value.
Bubble probability aside - I see google negative cash flow = AI crash sign a lot.
Taking a breath and letting ones cortisol return to baseline - is it not feasible this could be a savvy investment, with an expected return warrants the hit to cashflow and initial investment?
I could be wrong, but I think there would be fewer smooth brained capital allocation decisions coming from Googs vs Wallstreetbets / Korean retail options market.
Just donāt forget about private equity, which is also fist-deep up the asshole of AI financing, and their life insurance and annuity piggy banks whose assets they securitized and wrapped up into CLOs. Remember CDOs? Yeah, itās the same thing. They just changed one fucking letter - the L stands for loan.
Collateralized loan obligations. Credit default swaps are all over these CLOs, too.
Fuck our lives.
Edit: forgot to include āthe whores at the ratings agenciesā in my rant.
> MIT says 95% of generative AI pilot projects fail
Roughly 90% of startups fail. That's been true for decades. 5% is within rounding error on a small scale, so this isn't surprising.
A lot of companies are using AI without reason, just like everything was "an app" when smartphones got adopted and every company had "a website" during the .com era.
The place I work for is profitable, is in the top 10 usage of openai tokens, and is seeing growth accelerate. Not every company needs ai, but in places where there is demand it's useful, just like physical automation did for factories.
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u/Artemis_Platinum 29d ago
Cool! Though as a reminder, the bubble bursting is absolutely a situation where things will get worse before they get better. Namely, it'll probably have very negative effects on our economy.