1d ago

"So, you're saying a third of the stock market is tied up in seven AI companies that have no way to become profitable and that this is a bubble that's going to burst...?"

pluralistic.net

Pluralistic: The real (economic) AI apocalypse is nigh (27 Sep 2025) – Pluralistic: Daily links from Cory Doctorow

CWs: Cory Doctorow, newsletter, mentions of his upcoming book that he's selling.

Technology @lemmy.ml

Alas Poor Erinaceus @lemmy.ml

18h ago

The real (economic) AI apocalypse is nigh

pluralistic.net /2025/09/27/econopocalypse/

Technology @lemmy.zip

cm0002 @lemmy.world

18h ago

The real (economic) AI apocalypse is nigh

pluralistic.net /2025/09/27/econopocalypse/

80 comments

Anyone have any historical data on the dotcom bubble and what stocks benefited from the crash?
- bump
We need a better tool than that old, easily-manipulated "stock market" to track value. Value needs to become real again, not always inflated, because "shareholders".
- Value is a mechanism that hides what actually creates value: human labor power
  
  Energy & material extraction also create value.
- It's not a tool to track value, it is gambling for rich folks
  
  Umm yes gambling kind of. But not as a regular customer. They are the house, and the house always wins long term.
- And shareholder interests (create money!) make the too-big-to-fail companies think only in quarter year profits, turning them evil.
Absolute bubble for the datacenter middlemen and the AI software behemoth models that need data centers. The hardware companies though, and AI/LLMs overall, are here to stay and even if they waste their profits on investing in middlemen/datacenter/software customers, they can be profitable by inflating costs of their GPUs/hardware.
GPU depreciation matters, but tends to be relatively slow due to controlled incrementalism in hardware. Still, the high end faces the most risk, and Huawei/Alibaba won't be satisfied with small share gains over Nvidia to keep pricing gains. Even AMD is improving software stack fast enough to make affordable private AI. The low end has signficant disruption potential to the fossil powered datacenter/Skynet model.
It's not just an overall stock market bubble, it is a US GDP bubble. Where datacenter growth $ is larger than consumer spending growth $. Skynet for Israel control spending is an unstoppable corruption vector, and yes the champions of Israel must be financed and supported as geniuses by all media or "China and Iran will win."
I love how with the previous schemes like crypto, communities like this would have thought they were in on it, now with AI it's like nope not falling for that Spanish prisoner BS again.
they would have to sell us $800 billion worth of services over the life of today's data centers
$100 for a yearly AI subscription for each human is possible. The problem is, which jobs do the people have to pay for it?
- It might be possible for people on the Fediverse. Lots of people working in the tech sector with a good salary. But we are not the norm.
- That's funny you think they will stop at just covering their costs once they have each and every human depending on their software. This is about infinite growth baby!
- I don't think so. Half of the population on earth lives on less than $6.85 a day
  https://blogs.worldbank.org/en/developmenttalk/half-global-population-lives-less-us685-person-day
  
  The problem is, which jobs do the people have to pay for it?
  If one half wants to keep getting their wages, there should also be enough jobs for the other half. New jobs have to be created anyway.
- Yay! $300 billion was added to the GDP!
- Don't forget:
  Government: "I see this sector displaying $300 billion GDP growth in one year!"
  <spoken in between taking turns fellating a statue of Reagan made of asphalt>
I feel like he missed a key opportunity to tell the kid asking “what do we do?” “You need to unionize. Collective effort and mutual aid will serve you better in life than most things.”
Well Nvidia's the one laughing to the bank here; they've offloaded their GPUs for cash and stakes, and Microsoft/OpenAI/'AI' providers are the ones holding the bag (and GPUs).
Picks and shovels. The profiteers of the gold rush were the suppliers... I mean, Nvidia wants the grift to keep going, of course, but still.
- They'll be hit hard also. Apparently about 50% of their sales revenue comes from 3 customers, almost certainly members of the Magnificent 7 buying GPUs for data centers. In the modern economy, a quarter without revenue growth is failure, but imagine double digit decline.
  
  I mean, their stock price will take a hit. But realistically, that is not necessarily bad for Nvidia as a company, as long as they are ready for the burst and don't over extend.
- Seriously. NVDA and AMD are the only ones who are going to profit from this. And the CEOs, of course.
  
  FYI
  Nvidia's CEO, Jensen Huang, and AMD's CEO, Lisa Su, are first cousins once removed.
  
  Their golden parachutes are locked and ready.
- most of those sales on credit actually
  
  So if the buyers default, nvidia is holding the bag.
Microsoft "invests" in Openai by giving the company free access to its servers. Openai reports this as a ten billion dollar investment, then redeems these "tokens" at Microsoft's data-centers. Microsoft then books this as ten billion in revenue.
... Nvidia ... "invests" tens of billions in a data-center company, which then spends that investment buying Nvidia chips. The the same chunk of money being energetically passed back and forth between these closely related companies, all of which claim it as investment, as an asset, or as revenue (or all three).
investing back and forth, forever
- investing back and forth, forever
- I've seen this with M$ power contracts. Microsoft sign 10Y deals and pay a large % of their electricity costs in cloud credits.
- This is actually kind of scary. These huge tech companies that, for better or worse, form the foundation of modern life, could collapse overnight if the chips fall a certain way.
  
  Practically, what would the impact be?
  
  Hehe chips.
- We should tax financial transactions.
  
  We should tax securities. Stocks, bonds, and other financial instruments. Tax them, annually, in shares of the security. Let IRS liquidators auction them off over time.
  Exempt any natural person holding less than $10 million worth of securities. No exemptions for artificial "persons".
  
  i mean, there are no financial transactions in that quote.
- Tautologically tautological economics
Further: the topline growth that AI companies are selling comes from replacing most workers with AI, and re-tasking the surviving workers as AI babysitters ("humans in the loop"), which won't work. Finally: AI cannot do your job, but an AI salesman can 100% convince your boss to fire you and replace you with an AI that can't do your job, and when the bubble bursts, the money-hemorrhaging "foundation models" will be shut off and we'll lose the AI that can't do your job, and you will be long gone, retrained or retired or "discouraged" and out of the labor market, and no one will do your job.
I've been reading David Graeber. How many of these jobs are bullshit jobs that don't need doing in the first place?
- This is exactly right, and a lot of AI sceptics don’t see it. It doesn’t matter if the AI can’t do your job. If company execs are convinced it can, or they think this is a good excuse, they will fire you. When/if the bubble bursts years later, they are already at their next gig, nobody will care that they were wrong.
- Probably quite a few, but don’t let the fact they’re bullshit jobs fool you into thinking they don’t matter. The middle manager making $100K a year is spending that money on food, clothing, and other items that are produced by people who don’t have bullshit jobs.
  
  You're right. These bullshit job kinda need to exist as people need to eat, and that's difficult without a steady income. We really do need to start talking seriously about a UBI.
- If AI can do it, it's more than likely a bullshit job that doesn't need to be done.
  
  Listen pal, I suck at drawing but I've never drawn a person with 6 fingers.
- We’re really about to have AI turn a few bullet points into a report for another AI to summarize with a few bullet points instead of getting rid of reports that only exist to keep uninvolved leeches “in the loop”
  In this ‘hypothetical scenario’ all the reports are also taking place within a college advancement office, an institution that employs hundreds of people to solicit gifts from wealthy people that can be invested in wealthy people’s companies so that future college costs can be offset by the dividends paid out by the constant growth of these propped up businesses. Enshrining the current world order instead of imagining a world where heads of businesses don’t make so much extra money that it’s worth wining and dining them in an effort to get them to share a bit of the money they took back with you (for you to give back to them) (and their friends want some too of course) (hypothetically)
- Sounds like I don't have much to worry about in that I do building maintenance. AI isn't doing my job for a long time.
AI may not be profitable right now, but there's a lot more to "the magnificent 7" than AI that keeps them profitable. Even if the AI bubble popped, people would still be wasting their time on Facebook and Microsoft teams.
- They still have to make that money back somehow though. They can't just put a load of investment down on AI, make zero money off it (or worse, less than zero) and then expect everything to be fine with the existing profits. They need to raise revenue from existing streams to cover for the loss they just incurred by doing AI. That, or cut costs, which means layoffs, which means people have less money, meaning they spend less money, which means businesses make less money, so they do layoffs, and so on and so on leading to a recession.
  
  US taxpayes will be proud to carry this burden, as always.
  Privatize profits, socialize losses. The American (and thus global) way
  
  I don't know the exact numbers but I doubt these 7 companies employ enough people to cause a recession even if they fired everyone. Hell, they are laying of a lot of their employees already.
Nvidia is profiteering
- selling shovels aint illegal
  selling shovels on credit is pretty dumb though
  
  If Nvidia the creditor? That's real dumb. Don't mix banking with business, there's conflicting interests.
- Why shouldn't they ;D
"And then that happens."
"What is that?"
"That's global economy.'
- Ain't gonna be no recession this time
Don't forget a similar amount is tied up real estate and that bubble is already popping, starting in the SE
My whale oil investments are looking pretty good now
- I've chosen to put everything into gourd futures.
- I've shored up mine with a 'hooked beef' portfolio to help offset the AI risk. Everyone agrees "Whale Oil / Beef, Hooked / With AI" is a predictable return path.
The fall is going to be epic.
- I can't wait for a flood of liquidated A100/H100/MI300 servers. I'm in for the cheap rentals, if not buying one.

80 comments