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Fuck no we shouldn’t. This is their fucking fault!
None of us wanted this! They’ve been shoving it down our throats for months, cutting budgets, and redirecting it to AI, all while smugly reminding us that “this is the future, they’re the experts, and any oppositions to what they’re doing in 2025 would be like opposing the internet circa 1996.”
This is the fucking result of allowing the “technocratic elite” to come in and tell countless departments and agencies full of “educated bureaucrats” to just sit back, shut up, and watch how it’s done.
The AI bubble is the fucking Dunning Kruger effect in action. Just because some pompous dumbass buys a bunch of planes, and thinks that makes him an expert on planes, and he is then able to convince a bunch of other stupid people he should be allowed to fly a plane, it doesn’t mean he actually knows how to fly the fucking plane.
We already made the mistake of allowing him to take over for the pilot and he immediately crashed our plane. Does rewarding him for crashing our plane, and telling him to just brush himself off and hop back in the captain’s chair seem like the brightest fucking idea?! 💡
But, muh share prices
-Rich assholes
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When did the public’s opinion matter to the government?
Well, eventually the government needs the public to implement policy. For all the talk of the miracles of AI, you can’t just shout orders at ChatGPT from the Oval Office and have them become real by magic.
The problem at hand is that some people have rejected these ultra-wealthy racist buffoons in their quest to automate every white collar job. Other people are hopping on the ICE gravy train or getting their beaks wet on the ballooning crypto/tech secondary markets or otherwise profiteering off the back end of the conservative criminal enterprise. And these are the folks with all the institutional authority, the administrative offices, and the loyal trained footsoldiers carrying around the guns.
Cops seem to get along with AI devices just fine. It does the unfun parts of their jobs for them and offers more free time to go around town in a monster truck, ramming people, roughing them up, and filing them into concentration camps. As more and more of the US labor force is told “The only viable path to the middle class is through the police”, you’re going to see Americans prodded into the police state (or its many subsidiaries and offshoots) as a matter of economic necessity.
Eventually, if its a choice between being on the inside of the fence or the outside of the fence, who wouldn’t pick being Winston Smith over some homeless peer who gets beaten to death on the street?
They’re already being bailed out via subsidies. They don’t need to fail first. They’re being set up to never fail, because the treasure trove of information and surveillance opportunities are simply too good to pass up.
Ok, but don’t look at it like “free money”, they bought the politicians fair and square, it’s basically their monies at this point, the taxpayers are just being unfair.
Also, without the megacorps, who is gonna spy on you & monetise your work for themselves? The CIA like in the ancient times of 20 years ago?
It’s true, but is there anything better to invest in within the U.S. right now? The U.S. doesn’t really make anything and even this AI stuff is based on chips manufactured outside of the U.S…
Mortgage real estate interest trusts?
We should build actual pyramids they could start buying…
It’s true, but is there anything better to invest in within the U.S. right now?
The homeless family sleeping behind the Dollar General. You should put your money there.
Yeah, that’s why this bubble popping scares me so much. AI industry spending is propping up the US economy to a degree that is really frightening.
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The U.S. doesn’t really make anything
Actually the U.S. makes a lot of stuff. Amongst other things the U.S. accounts for somewhere around 40% of the global food & beverage market.
https://finance.yahoo.com/news/food-beverages-market-size-reach-133000592.html?
is there anything better to invest in within the U.S. right now?
Defensive stocks like energy, utilities and pharmaceuticals. But I would hold for the moment. Even JP Morgan CEO told people to divest from US.
Not a financial advice but something to consider is investing in gold and silver and companies outside of US. Japan, China and Europe are increasingly seen as safer investments (but China at the moment is having an economic downturn). If you want some growth and security to protect your cash if there is a down turn, you could buy bonds.
Can the government even afford to bail out the AI bubble? There’s so much “money” tied up in it I don’t think they could even print enough could they?
This bubble exists on paper, it’s basically fake money that’s been built up from companies sending IOUs to each other. It’s insane to think we should bailout fake wealth they built of market speculation. When this does pop, it’s not like the housing market where there is a ton of assets that exist. There’s nothing there.
That’s not entirely accurate. OpenAI is making deals to have chips produced, to have a data centers built, etc. Those are real things that someone has to pay for. Real debts. Their promises, in return, are just IOUs essentially, but real material debts are occurring.
OpenAI failing when the pop happens would mean nothing at all in itself. They don’t produce anything unique of value. But their failure to make good on their IOUs to other companies that went into deep debts on their assumption of repayment, companies that make up a massively bloated chunk of the markets and national GDP, and companies that are producing American technology in direct competiton with China, that could have a disastrous effect on the economy and geopolitical affairs. That is, I think, what they are counting on.
Both OpenAI and the companies taking IOUs that they have no reasonable expectation to be made good on are just banking on the US goverment to pay out when the time comes. OpenAI isn’t necessary to save at all, but its deals might be to prevent this coming crash. And if the government pays those debts, OpenAI survives and still gets to keep all of its stuff it bought on IOUs, free of charge, and the other companies got paid despite making a deal with a massively non-profitable company. They think that is a win-win. I think they need to be charged with tax fraud and let the companies fail. But… that’s not going to happen under Trump.
But their failure to make good on their IOUs to other companies that went into deep debts on their assumption of repayment,
Which companies have gone into massive debt in order to produce goods for Open AI? As far as I know the biggest supplier to Open AI is Nvidia and Nvidia is spewing cash machine. There are some small data center companies that they have made contracts with but those aren’t big enough to bring down banks the way housing bubble threatened to.
They’ve made 10s to 100s of billion dollar deals each to Amazon, Google, Microsoft, and Oracle for cloud compute that will require expansion of data centers to meet that demand, and similar deals to Nvidia, and AMD for chips. There are many more companies, smaller companies, too.
I know that these bets on OpenAI are not quite as risky as they seem for some of these companies. Many have been sitting on liquid cash for years without any real investments in R&D or tech advancement until this AI bubble, so they can actually withstand some amount of loss and not feel anything themselves. However, A) That is not univerally true. Some companies are over extending and likely counting on a bailout when openAI fails to pay them back. B) That doesn’t mean that they won’t all go crawling to Trump to save them from these inevitable losses. And he’ll almost certainly do it. And C) Even if they can financially withstand OpenAI defaulting on their deals, that doesn’t mean that their bloated market caps won’t tank once the idea of some magic money printing AGI tech dies. If allowed to happen, the markets will tank, investors will collectively lose trillions, people will lose jobs, and the US will lose ground in the global markets and the AI tech race, which the Trump administration will likely not allow.
Just those companies listed make up around 3% of the actual US GDP, and their combined market cap is actually more than 50% of the US GDP due in part to this AI bubble. And so many other companies are directly reliant on at least one, if not many of these companies, for cloud computing, for hardware, or as vendors for them, that their losses can ripple out way further than just those companies.
If and when this bubble bursts, there is no way that it doesn’t cause a market crash, and there is no way that the US government, under Trump (and honestly probably under most in Washington, even Dems, even if Trump weren’t in office) will not act to decrease the severity of it for these corporate and market investors by throwing tax payer dollars at it.
Let me just correct one thing here - market cap is NOT the same as GDP. One measures valuation of a company while GDP measures OUTPUT of an economy which includes output of a company. US GDP does NOT measure the MARKET VALUE of the US as a whole. Yes the market caps of the big companies are ridiculous. Of the magnificant seven all of which are HUGELY PROFITABLE, only one is wholly dependent on AI bubble. When their valuation crashes, it’s not going to stop the world economy. They will still keep making chips like they used to. Because we still need chips post bubble yes? Yes.
Let me just correct one thing here - market cap is NOT the same as GDP.
I didnt say that it was. I listed both their actual contribution to the GDP and their market cap and the relative value compared to the GDP to point out how massively bloated the market cap is.
When their valuation crashes, it’s not going to stop the world economy. They will still keep making chips like they used to. Because we still need chips post bubble yes? Yes.
I also didnt say that the companies would cease to exist or to function post crash. Most, if not all, would continue on without a ton of outward change. That doesn’t mean the crash will not have a stupid wide ripple of negatives on any number of industries not directly related to AI.
If a company like Microsoft overextends into AI and sees nothing for it, when the bubble pops, we’ll still have Microsoft. They’ll still make, sell and support Azure, and Bing, and Windows, and all their other products. But if their bet doesn’t pay off, they’ll have to rebudget, reorganize and likely end up laying off hundreds or thousands that were expected to be used and paid for from the AI work that is no longer coming. They may reduce orders with or cut ties with Vendors they were expecting to need things from to serve their AI work. They may close offices making businesses that depended on those employees for revenue see sudden drops in customers. Big sudden market shifts WILL have a lot of negative effects and chaos come with them. It is inevitable.
Also, I didnt say that their loss will crash the world economy. I dont think it will. It might not even have that big of an effect on the US economy. I’m actually in favor of letting them take their losses.
But the Trump Administration will not let that happen because they are prioritizing competition with China above everything, with AI being a particularly major area for that competition right now. They’ll bail them out to prevent this crash, and to make sure the US remains competitive in the race against China. I think the companies involved know this, and that’s why they are taking these IOUs from a non-profitable company with not substantial plans for a revenue stream that will come even close to what they would need to pay off these debts. I think they are all counting on Trump’s administration as a guarantor on these debts, and are expecting their money to come from the American tax payer. I say fuck them. Let them take their losses, tank the US economy if it does, and the ones that are responsible can be charged with tax fraud among other crimes, I’m sure. To do otherwise is to guarantee it will happen again and again. But Trump won’t do that.
the majority of nvda’s revenue is hardware sold on bnpl schemes…if those ai companies dont turn a profit, which they can’t without spreading IOU’s around as fake revenue…the whole thing falls apart.
Great explanation!
Made me finally realize that the US tendency to always bail out “too big to fail” is a huge mechanism enabling the outrageous speculative silliness in the first place, cuz there’s not enough risk applying downward pressure on price.
This is probably obvious to folks, lol, but it wasn’t to me. Net result is just that there’s more logic behind absurdly high stock valuations (and not just limited to AI ones) than I previously understood.
the US’s financial markets are left purposefully unregulated to facilitate “liquidity”, read…taking $ from the world’s gamblers. With the way MM’s are setup and largely unmonitored…this means the US’s stocks are purposefully ran up in proce specifically to drop them hard, to trigger emotional reaction-selling from those that don’t know any better.
that plus a couple key differences in how option contracts work vs most other markets means the whole thing acts as one big fucking casino. all of this is by design, because the people running the US (big business) want regular cycles of boom and bust to take advantage of the working/(non-existent now) middle class.
Yeah, just recently one of the deals was something like the hardware providers giving AI companies enough money so they could turn around and spend that money on the hardware providers stuff…
And the hardware providers got a lot of that money from their stock valuation which increased from the last deal they made with the last AI company. And this deal raises the valuation to fund the next deal.
All of these datacenters and the semiconductors inside them are like the housing supply in 2008, assets that exist on paper whose construction was funded by the speculation of future returns of the AI companies, who have yet to turn a profit or come up with any useful revenue generating venture out of their glorified chatbots.
Its only a matter of time before the AI companies run out of investor money without having a source of revenue and profit generation to pay for all this infrastructure, and that’s when the bubble pops. However I think we will be waiting for a very long time for that to happen, since the funding ultimately comes from tech companies who have stashed away probably a combined trillion dollars in cash over the last decade. The problem is, that pulls in more than just Nvidia and openAI; by market cap we’re talking about a handful of tech giants that make up like 40% of the S&P500.
Can I get a bailout for that time I tried stonk gambling too? By my calculation that few thousand is worth a few trillion by now.
At least a tiny bailout for you should be allowed right? I mean you’re to much of an asset to the work force to have a loss like that.
Just print more /s
They can, but remember Zimbabwe used to have a 100 trillion dollar note.
But of course they will bail them out… there is a 0% chance they won’t be bailed out
Exactly. AOC can talk all she wants but Democrats Always Chicken Out.
DACO
LOL. 9 downvotes…how did that lockdown work out?
If they don’t bail them out then think of all the jobs that will be lost when AI comes to fruition – I mean the jobs that will be lost if they don’t get their government money.
In some countries, people make a big enough stink to actually send people to jail rather than write them a cheque.
It can happen.
but that’s not the Murica way
It could be! You were once the great hope for democracy and working people everywhere, until you were captured and contained by the aristocracy. You could be that hope again.
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Damn, I want to know what this said…
hmmm that was mostly the successful years of the PR campaign from Murica…
Yeah it was never really real, except as a dream. But real people did actually come the murica to try to dream it together. It’s just the money men got there first.
100% correct, but the Americans will eat the shit bailout (corporate socialism) sandwich…again.
Without any choice in the matter as always.
how does bailing out corporations ensure the workers own the means of production? stop using bastardized definitions you were taught in conservative schools
Obama gave a colossal welfare check to corporations in his first term and the right hated it.
Trump does it in both terms and they applaud it with tears in their eyes and cum in their pants.
Republicans should hardly be considered human beings at this point.
At this point? I’d go back way farther. Probably whenever the remnants of the Dixiecrats moved into their ranks.
Obama gave a colossal welfare check to corporations in his first term and the right hated it.
Trump does it in both terms and they applaud it with tears in their eyes and cum in their pants.
This is starting to sound like what would happen in the early meetings of the Estates General just before the French had their Revolution
Time to bring back this classic.
The fun thing about politicians saying things we like is that it’s much easier to do so when you know exactly how all of this is going to turn out.
Words don’t accomplish anything. Call me when the Democrats refuse to vote for the bailout and it fails instead.
We have to reach across the aiiiiiisle…
Even while people are getting snap and healthcare these companies should be left to fail
No you see in capitalism, the entire system is perfect and must not be interfered with in any way, except that companies are delicate, precious things that must be saved at the expense of all else.
who says the entire captialist system is perfect? This is an example of government overreach and would be far worse under other eco frameworks.
AOC not seeing the covid 19 travesty and the government proving this isnt capitalism but communism for the rich
communism isn’t just when the government does stuff. you’re describing textbook capitalism here. the transatlantic slave trade was state subsidized human trafficking using the first form of capital, Black people. we can’t “no true Scotsman” our way out of capitalist economic disasters
Man the tip of the iceberg, you go deep down enough and its not even capitalism but socialism for capitalists which makes jobs an invitation to participate in their economy which is literally communism for capitalists.
sure, and the earth is flat because that hurts my feefees less. man, stfu
The majority of people aren’t intelligent enough so I don’t expect anybody on the internet to get how fucked they are systematically.
Hey guys, so not all bubbles are the same. When the housing bubble burst, there were tons of debt that tied the housing bubble to wallstreet and big banks which tied in mainstreet to the bubble. When that bubble crashed, it put banks in jeopardy and THAT would have brought the whole financial system and main street down. We’d have been seeing bank runs, and the whole economy would’ve ground to a halt. That’s when the bailout happened. Anyone remember dot-com bubble? When the dot-com bubble burst there were no bailouts. Companies just went under.
Current AI bubble is funded by the gynormous profits and funds that big tech companies have - Microsoft, Meta, Alphabet, Amazon, etc. who have humongous cash reserves and profits that they are literally plowing into building AI data centers which in turn fuels Nvidia’s gynormous profits which it is plowing back into other AI companies. Nvidia doesn’t have debt. Big tech companies aren’t highly leveraged. When it crashes, it will go the way of dot-com.
After so many years of financial education being “save early, save often” and “put your money in index funds to diversify” and “historically the US stock market has only gone up over long enough periods of time” there is a sizeable amount of retirement funds riding on this bubble. In the year 2000, the average 401k balance was a little under $60k (https://www.latimes.com/archives/la-xpm-2001-aug-14-fi-33836-story.html) and that has now ballooned to $326k (https://www.empower.com/the-currency/life/average-401k-balance-age).
The bailout will be sold as protecting retirement funds, even though the median 401k balance is far lower than the average and even though people nearing retirement should have a higher mix of bonds instead of stocks anyway.
I appreciate this (much needed) insight, but I think too many members of congress and high-ranking officials in this corrupt government have huge vested interests in this bubble and may not think twice in throwing the public under the bus
The AI bubble makes the Dot Com bubble blush by comparison.
US GDP is $29 trillion. The Dot Com bubble wiped $1.78 trillion in value from the US stock market in 9 months, and had a lot of flow on effects to banking - ultimately the bubble cost about $5 trillion, had dropped the stock market 78% from its peak, and triggered a recession.
According to leading economists, the AI bubble is 17 times larger.
I believe the AI bubble today is in many ways worse than the Dot Com bubble of the 90s because we’re now so heavily reliant on technology for business, and so many major tech companies have invested heavily in AI, pretty much everyone has some exposure. A crash of the tech sector and multiple big names failing today would be just as bad economically as banks failing in the 90s.
If you think the US economy is somehow insulated by the wealth of the big tech companies… I strongly disagree. They borrow against their stock valuation, if their price dips a lot their lenders will be looking for loans to be repaid as their collateral has decreased. They are not too big to fail and when it pops they’ll cause a lasting recession.
It would be different if the rest of the US economy was booming, but all US economic gain in GDP over the last 5 years has been due to the AI bubble, take it out of the picture and you’re already in a recession. Add Trump as president and a Republican-led congress defunding so many US social support institutions and you may have a depression.
(Edited per user correction)
Well, at least hopefully we’ll see the Silicon Valley tech monopoly weaken a bit (but at what cost?)
Americans need to demand a better goverment, tho.
and triggered a recession that lasted most of a decade.
FALSE. Fake news. Please check your economic data before making a comment like that. Which fake news website did you go to that said there was a recession that lasted a decade because of the dotcom bubble? The recession after dot-com bubble burst lasted 8 months. Last time I checked, 8 months isn’t “a decade”.
Oh true, that was overstated based on a graph I misread. I’ve corrected my comment. Weird of you to lose your shit over one datapoint in a huge comment tho.
I look forward to watching the AI bubble pop, it’ll be great seeing a lot of people who think they’re really smart get a reality check.
Personal insults really indicate you know just how gravely ignorant and wrong you are. your entire conclusions based on false premises just don’t stand. Don’t let your feelings get in the way of FACTS. You can be better than this. Make that choice.
There are no personal insults in my comment. Hope you’re well 🍻
The rich don’t like her already anyway
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…But they probably will anyway, right?
Damn dude, what’s it gonna take for Americans to cut their losses and actually revolt? Painful to watch at this point.
What, in your mind, does said revolt look like?
9 missed meals is the answer you are looking for. People still have something to lose, so they we continue to go to work.
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realistically…murdochs propaganda arm needs chopped off, that’s the biggest reason for this shift over the last 30+ years.
Weapons to Israel, though? Perfectly valid use of funds. Gotta tighten your belts so we can pay for genocide, says one of the most “progressive” Amerikkkans.
Please run for Congress or a state position, and advocate to defund Israel.
Nice take, comrade.
Yes… But didn’t she directly vote to deny the SNAP?
Very very doubtful.
So she was one of the 8 democrat senators who crossed party lines to pass the CR? I didn’t check but it seems unlikely.
She’s been very anti trump and anti republican since the beginning. That’s why they hate her, she knows her shit, was a bartender and didnt come from money and is educated. Also attractive, so the really fucking hate her.
Last I checked the majority of the rich were anti trump and anti Republican (EG Bill Gates, and far more money donated from billionaires towards the dems than republicans in the last presidential race). But sure.
A simple search shows she was NOT one of the 8 traitors. If you knew anything about her, you’d know she supports the people 100%. Not sure what you’re talking about.
You can “but sure” your dumbass outta here if you’re just gonna spout lies and attempt to disguise them as questions.
Lies? She supported the shutdown. The shutdown caused SNAP to stop being disbursed (partially, when it came down to it). So she stopped the SNAP. In your words, she would be a traitor for turning the SNAP back on. Am I missing something?
Send me a news article or link about it. She is not one of the 8 you referenced above.
There wasn’t even a vote on that shit. 🤦♂️
There was!
On removing SNAP? Also you can’t trust anything with a .gov address right now, they’re strait up lying about it, using official sites to spread lies and hate.
I’m mostly relying on knowing how a filibuster works.
