Everyday AI looks more like the '08 housing bubble

The funny thing about people who say it’s not a bubble because AI has value is that the asset category having value doesn’t prevent valuation bubbles from forming.

Houses have value: you can live in them. Yet there was a housing bubble.

The internet has value: you can watch cat videos on it. Yet there was a dot com bubble.

Tulip bulbs have value: you can grow pretty flowers with them. Yet there was a tulip bulb bubble.

In my experience, whenever you start reading news stories asking if something is a bubble and quoting investment bankers say, “no, it’s not a bubble,” well, usually it’s a bubble.

The entire US economy has been running off of an asset megabubble that demands global dollar recycling via Wall St. and property for decades now. This is much worse than 2008 as there is no cushioning. We will see what 20+ of doubling down looks like in the end.
Houses have value: you can live in them. Yet there was a housing bubble.
Was?
- There is again, but there was, too.

There is definitely a bubble. But also what Nvidia is doing is smart. They have boatloads of cash. They are investing that cash in the companies that are using their products to create money making services. If one of them can create a killer app or viable service this will create demand for their products and they will have an ownership stake in it. Is this guaranteed or even likely? Probably not. We have reached the point where we were in 1996 where the chairman of the fed came out and said we are in a period of "irrational exuberance." That bubble took four more years to pop. This one may end quicker, but it is impossible to tell when it will end or what will come out of it from where we sit today.

Why should it pop sooner? US money can’t go anywhere else with the same profit margins. It‘ll run out if something more profitable comes around. Maybe a war or so.

Hold up everyone. It's not a bubble.

"So it is true that valuations are high but, in our view, generally not at levels that are as high as are typically seen at the height of a financial bubble," said Goldman Sachs strategist Peter Oppenheimer.

He's from GOLDMAN SACHS LOLOLOLO I THINK THEY WOULD RECOGNIZE A BUBBLE LOL ah fuck me our economy is gonna splode

Goldman Sachs also though NINA mortgages were a good idea, and they also thought it was a good idea to bundle bad mortgages in with good mortgages, and find a rater to mark them AAA investments.
And then we saw how that worked out.
- yeah, how could this go wrong?
  at least after the crash those houses could be lived in. these datacenters are made for one purpose, AI, and really would have to be completely gutted and refurbed for general purposes.... fun.
I wonder what the people over at Bear Stearns think oh wait they gone.
- this made me chortle into my cereal ty
I mean, what's he gonna say?
- Give me exit liquidity so I can buy the dip?
- right? I just figured the "it's not a bubble, guuuuys" crowd could find someone a tiny bit more credible lol

NVIDIA really out here selling shovels in the gold Rush

Nvidia are very smart in that regard, ethics aside. Very early on they decided that selling cards to gamers will not give them the infinite growth everyone so desperately desire, so they started looking for what does, and they were consistent at it ever since. Every tech bubble of the recent history is powered by Nvidia cards. How much they contributed to the hype (and damage) is not entirely clear, but that's not zero for sure
- They lucked into it. They made their cards for gamers, and various groups, AI researchers, bitcoin miners and others, discovered that they those gamer GPUs were really good for other tasks too. I think it took a while before Nvidia started making specialised cards for those purposes.
  I can't really blame them for serving that market that they just lucked into. I can and will blame them for their terrible Linux support.
They made gpus long before the gold rush and will not stop after. The usefulness of tensor cores will not dwindle with any market correction. Even before ai boom they were valued astronomically out of reality. Not a single stock is tied to actual selling or owning of anything anymore
- Just like shovels existed before the gold rush and will exist after humanity's death. But we have a saying for a reason

If Lemmy is supposed to be the place where the most tech savvy people in the interest congregate, and everyone in the comments is unsatisfied with AI then we really do have a problem. These companies have all reached a point where they no longer listen to their most informed customer base but instead take 100% of direction from investors who don't even know what they want except a line going up.

Investments and income have been divorced from reality for a while now, bud.
Eh. Lemmy has a lot of ignorance surrounding technology and science compared to other sites. Hacker News is what you're looking for if you want somewhere that is full of the most tech savvy people on the Internet, and most of them are extremely pro AI (with some weird AI cultishness alongside). Myself I think AI is a bubble but there is a lot of promise in the underlying technology once you take away the hype, just like the .com bubble at the turn of the century.
- Hacker News is a site full of tech cultists and apologists.
- I am not sure if you have discussed AI in a room full of hackers recently, lol. I have. Maybe 1/100 is pro-Generative AI in my estimation:
- Too many people equate AI with LLMs only. LLMs are mostly bubbled bullshit, with a few limited use cases. But AI is a much broader topic. The really scary AI is the stuff we hear little to nothing about.
  People also forget how dramatically tech can advance over time. Spoiled impatient Americans in particular want a finished product or they quickly write it off as "garbage". They forget every product we own and use was once "garbage".
- Lobste.rs is probably even more on the "engineers talking to engineers" side of things. I've not visited in a while and am not sure what people there think of (the current crop of gen)AI.
If Lemmy is supposed to be the place where the most tech savvy people in the interest congregate
Says who? Mostly feels more like sales than R&D here. Which kinda fits with these pitches.
- I feel like someone working at the pointy end of R&D in AI isn't necessarily well placed to predict the future of AI.
I thought it was the place for people who didn't want their shitposting interrupted by random child porn. Am...am I in the wrong place???
- Unfortunately Lemmy is rife with CSAM too, but the larger instances have done a pretty great job eliminating it.
  Smaller instances still get dumped on sometimes.
  Edit: actually it feels like it’s been a year or so since any CSAM spam events, so good job everyone
- It’s always interesting to read the experiences of others. The one and only time I stumbled on cp was in the late 90s. Haven’t seen it on reddit or lemmy. Our bubbles keep us isolated.
Lemmy is not the most tech savvy people on the internet nor the customer base for AI. Where did you get either of those ideas?
- Because you have to be tech savvy to understand what the fediverse is or how ActivityPub works so it sets the filter for a userbase that evangelizes emerging technology.

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%.

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.
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.
- Can the AI bubble please suck up all the housing investment?
- 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.
Hahaha this is fine, I am fine with this, what could possibly go wrong
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.
Yep it's such a fragile situation

People need housing, no one needs this AI crap. Even in boring engineering jobs using tools that solved problems decades ago, we are getting AI shoveled in left and right in places no one needs or wants it. And calling old features "AI" is also another problem.

And now these stupid "barking bears attacking fat sleeping people" videos are everywhere, and people seem to think they're real.

We should focus on natural intelligence first, that is to say each other, and education...

Oh and the headline should read "Every day", "everyday" is an adjective, like an everyday occurence.

Ai will be the best tool to keep the masses stupid since television.

I see "gold rush" the company selling shovels is making out like a bandit, everyone else is make a profit on the previous gen but requires a 10x cost increase for the next gen. And thus 10x more shovels.. As soon as 10x more shovels stops giving 10x+ improvements this is the wrong investment.

Hints are we already reached this point.

Some AI companies will pivot and improve in other ways with more linear costs/results.. The ones hoping the line continues to the moon.. I think they overshot.. I just don't know when it will fall back..

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 know right? It’s not a bubble if there are transactions between the different companies in an industry. Nothing here shows that these investments are self-supporting circular, nor that all of this is propping up the economy.
Circle != bubble
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.
Edit: the above baseline is incorrect; see sugar_in_tea's comment for a more accurate baseline and some interesting counterpoints
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.
- ~37 compared to 15-20 being normal.
  15-20 was normal for the 100 years ending 40-50 years ago. But of we look at the last 40 years or so, the CAPE has been higher, suggesting that we don't know how what "normal" looks like going forward. More people are buying stocks than ever before due to retirement plans and poor bond yields, which pushes up the PE.
  So whether ~40 is high for a PE going forward isn't clear. The CAPE hit ~45 in the 2000 crash, and reverted to ~20 after the crash, yet the 2008 crash only hit ~26 and crashed down to ~14 and quickly bounced back to ~20. The 2008 had little to do with CAPE and more to do with corruption in the banking industry, whereas 2000 was almost purely oversized hype in the burgeoning tech market.
  So is the normal range 20-30? Idk. Maybe 20 is actually low going forward, it's unclear. Either way, 40 isn't as outlandish as it was in the 2000s, and that pushed up to 45 before crashing.
  there is a strong likelihood we are seeing a bubble.
  Agreed. But if you drop out of the market and invest in other stuff, you would miss whatever the rest of the runup will do before it bursts, which could leave you worse off than someone just investing in the entire market by market cap. Ot could continue to run for 10-20 years, or it could pop this year, it's impossible to know since it relies heavily on investors continuing to believe the hype and companies continuing to have something to back up that hype.
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
- Settling mars is a centuries long undertaking. You basically have to nurture a whole ecosystem from scratch... that would be a brutally difficult and lengthy process in the best of conditions. But of course, these aren't the best conditions. We aren't doing particularly well with the ecosystem we've already got.
  If you want a historical project, then look to balancing modern industry within the planet's biosphere. It's a prerequisite to anything happening on mars.
- 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.

Looks more like the dot com bubble to me.

Is it just me, or are the bubbles coming closer together these days?

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.
- Like onto tax paying individuals
- Yep so now when it hits it’s going to be really bad.
Is it just me, or are the bubbles coming closer together these days?
Yes and no.
Yes in the sense that we have a lot more "fad" economies. There is something new so that needs to be EVERYTHING and the market course corrects, often at the cost of hardship for many.
But "no" in the sense of what "bubbles" tend to refer to. Things like the Japanese Bubble Economy where it causes (I forget if it is officially one but) recessions and even depressions.
The AI Bubble is not going to do that (on its own...). Yeah, a LOT of companies are going to be left holding the bag when they realize LLMs can't solve all problems for them AND manifest a Cyber Stana Katic to give them a blowie while it does that. But what will they be left with?
A LOT of "prompt engineers": This is bad because that is going to be a LOT of people who, increasingly, went to school to get a degree in something with very little utility. That said... Art History majors have been showing us how to do that for decades and at least they did something they loved on their way to service industry jobs.
For the companies that gutted their workforce over the past few years: A need to rapidly hire talented workers who don't require ChatGPT to do their job: This is REALLY good for the people who have been hurting and should actually lead to a lot of job mobility... for the old hats who predated this fad
For the companies that purchased hardware: A lot of edge computing devices are going to be of questionable value. But for the folk who "just" bought a shit ton of GPUs from Daddy Jensen? They have a shit ton of GPUs they can either sell for cheap (not horrible) or repurpose (good)
Don't get me wrong. There is going to be upheaval and it is going to be bad. But it is also important to remember that drawings like the above are actively misleading and bordering on manipulative. Because basically all the biggies, except OpenAI, have non-AI uses. Oracle ballooned massively because of the OpenAI injection but... they are still god damned Oracle. Same with nVidia who, when they aren't powering every LLM on the planet, are also one of the companies that makes all the cards that power stuff like computer vision and the like in cars and what not.
Because... remember the dot com bubble? Remember how basically the entire world still runs on The Internet? It was just a case of rebalancing and pivoting for the most part.
All that said... the US is in a really bad way because the fascists have been increasingly gutting the economy and stopping basically any industry that involves manufacturing or communicating with external countries. We are gonna have a massive stock market crash when OpenAI et al pops...
Global economy has inflation since what, middle of the last century? Since slavery and colonies stopped being a thing?

Except it's 17x larger & will take the entire US GDP with it.

https://fortune.com/2025/10/07/data-centers-gdp-growth-zero-first-half-2025-jason-furman-harvard-economist/

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.
- Is "US soft power" a euphemism for sowing destruction and proxy wars everywhere? Or do you mean things like the awful show NCIS being barely disguised pro-Israel pro-war propaganda? Like that?
God damn it, if the US collapses who will supply weapons to all its peaceful democratic allies in the world? I'm super fucking pissed off about this.
Please let this happen.

But what will be left after it bursts? At least in cause of the housing bubble - the houses existed physically - what will be after the AI crash? Lots of spare gear sold for cheap?

The s&p 500 tanks a ton and banks call on loans from these AI hyped companies using the price of the stocks as collateral (previously expected to rise). Credit crunch and now companies tighten the belts even further so higher unemployment again. Federal funds rate gets slashed and those that can manage steady good work during the recovery years will be fine. Everyone else will be struggle busing as usual
- Can you elaborate on managing "steady good work"?
A bunch of brain dead junior Devs who cannot think for themselves
- next year's salary research is going to be a lot of fun!
But what will be left after it bursts?
Affordable GPUs? Less pushy AI commercials?
The wealthy will just move on to the next thing to inflate. Capitalists don't work. They don't care about anything other than ROI.
- I don't think they care about ROI for real. If they cared none of that would've happened because that's just not how a real businesses are operating. You can burn the investments into R&D to an extent but if the product's money flow doesn't show a positive dynamics long enough - you get ready for some soul searching shit. My guess is that a lot of things contributing to AI bubble have something to do with money laundering.
- These valuations cannot be tied to ROI, even using Olympic level mental gymnastics. The market would collapse in a millisecond. They are tied to a fictional dimension 78 years in the future where everyone decided to work overtime without collapsing and being four times as focused while the planet magically starts healing itself and no major disaster happens and all wars escalated without destroying any infrastructure or upsetting any populations and the authoritarian revenge hypercapitalist disasterpiece currently boiling over in the global standard host country suddenly is unanimously accepted as a new way of life without a single adverse reactions or any systematic issues and a spontaneous miraculous salvation from the diseases and famine it has maliciously developed due to the Christian god both existing and subscribing to the polar opposite moral and ethical alignment that the elite privileged promille has hallucinated to fit a reality that also somehow pivoted from a complete mass psychosis into firm truth by way of some unforseen quirk in the laws of physics that every great mind and scientists missed that magically flip childish commercial folly into concrete reality without requiring effort and being the first consciousless entity to achieve autonomy and an ability to replicate exponentially without consuming resources and a renneissance of unity appears around a unilateral decision to kill brown skinned people that agree to live and reproduce in the most efficient manner for the single purpose of feeding that slaughtering machine and producing goods and resources for the machine and for the now sanctioned debauchery that the new religion has prescribed all of our species to perform
  Which as you might imagine is more than a little stretch
yes, We can't prevent the bubble burst. We can hope it happens sooner rather than later but the bubble is baked in. So what companies and individuals can to is basically buy up their detritus at bargain prices. And then use them to make better, more solid companies that do not require $3T investment while showing no fucking profit.
- it's kinda funny how all these massive business are all giant money drains year after year after year. back in the day business people used to pride themselves being in the black.
Used GPUs
- Annoyingly the current Gen that's used for ai is basically useless for gaming
The gpus will still be used for AI, just not as profitable
- Hard to do that when there's no profit NOW.
What was left after the cryptocurrency crash? A whole lot of GPUs that got repurposed for AI. They'll just get repurposed for whatever extremely computationally intensive thing some computer engineer comes up with. Until that bubble bursts, rinse and repeat. What's happening is project managers are selling the next big thing to make a lot of capital really quickly to a board of directors.
- They’ll just get repurposed for whatever extremely computationally intensive thing some computer engineer comes up with.
  these are for AI, purpose built bespoke solutions to LLM problems. they'll age like fine piss.
- Where does the capital come from though? Someone has to pay for the shovels and if there isn't a profit now, how will they pay for the next bubble?
There are many fine uses for tensor cores, we will not stop processing data.
- There sure are but will there ever be a real chance to attract sober investors to make it work as a real business and not growth hacking extravaganza any time soon?

If not for the banks investing hevily into it, i'd not be all that worried.

Every company in that list could shrink by half and we'd all be at worst back to covid times. Sure unemployment would suck, but do we REALLY need microsoft and NVidia to be as huge as they are?

doesn't look a goddamn thing like the housing bubble

but the circles
- Can confirm, circles look like bubbles.
I suppose similar in the sense that the housing bubble involved a bunch of rich idiots speculating on bad debt that had been vaguely washed to make it look good and now we have a bunch of rich idiots speculating on AI based on vague promises that it'll be good.
More like the .com bubble but much worse.

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.

From the entry for "zaibatsu" on Wikipedia:

Under the Allied occupation after the surrender of Japan, a partially successful attempt was made to dissolve the zaibatsu. Many of the economic advisors accompanying the SCAP administration had experience with the New Deal and were highly suspicious of monopolies and restrictive business practices, which they felt to be both inefficient, and to be a form of corporatocracy (and thus inherently anti-democratic).

The only difference? The zaibatsu actually diversified their operations.

And that is why Yamaha makes everything from musical instruments to motorcycles
Many of the economic advisors accompanying the SCAP administration had experience with the New Deal and were highly suspicious of monopolies and restrictive business practices
Your country was very different then.
- My country? I am from the EU!
  Let's try not to be offensive.

Unpopular opinion but this will not as bad as housing bubble and we're way past bubbles actually popping in contemporary economy. Even China corrected for its massive ghost city housing bubble just recently and that was actually worse than ai tech overvaluation.

This turned out a little bit long. I wonder if anyone will bother reading it.
A lot of this so-called 'bubble' is based on capital expenditure in support of a technology that probably doesn't have the capability AI company ceo's claim, but does have fascinating, and in terms of how society is currently arranged possibly extremely harmful, potential.
I know what ai companies have done, and what they are likely to do, in the pursuit of profit is shit; I would say that is a capitalism and fascist billionaire issue, rather than a tech issue but ymmv.
And there is the energy consumption problem. I think ai ceo's and tech broligarchs would privately say 'compare the energy consumed by my datacentre to the energy consumed by the workers it has replaced and you will see it is fairly efficient.......' (I am saying what I expect they think, not what I agree with).
The concern that the economy currently has all of its eggs in the ai basket seems reasonable, but I see why capital is betting on it as big as it is. Any concerns regarding the economic disruption of an ai bubble popping is nothing compared to what could happen if 50%+ white collar workers are made redundant. We saw the number of essential workers needed per 1 million people during covid: it wasn't many. Most jobs exist because the people exist to do them, corralled into the pyramidal structure of capitalism, where money trickles upwards. AI might push us into an era where the people exist but the jobs do not.
Anyway, I see this 'bubble' as being like the dotcom bubble, which didn't kill the web when it popped. The gpu's this capital expenditure has paid for are going to continue to be used, even as this economic period shakes itself out. They aren't just going to evaporate. It isn't like worthless debt being packaged up and resold without a chance of it being recouped, even if the prospect of what can be achieved with AI is currently over-valued.
- Comparing to the dotcom bubble is what finally made it make sense in my brain. Though I know the toll it took on that sector's workers and I don't envy those in fields that are going to be affected the same way.
Can you explain how we're beyond bubbles like I'm 5? Is it that there are gentler market corrections now?
- Yes, contemporary economy and free markets are so imaginary now that cascading effects and bubble pops like 2008 are very unlikely. American stock market in particular is so far off reality (even before AI boom) that it's basically a video game with no actual relevancy to true gross product. While China/Russia is a dictatorship with no representation of reality at all and can easily hide the burden of bad economic policies in the obedient peasant class.
  So we have dictatorship with imaginary worlds vs "free markets" living in their own imaginary simulation. Economy is all made up now and cascades are basically impossible because that requires rationality.
I've been saying the same thing.
The 2008 housing bubble was predicated on cheap lending. It was all debt. It was massive amounts of toxic debt sold around Wall Street, like using Trump Coin or counterfeit cash used to buy a house.
The vast majority of what's happening here is not debt. Sure, some, but very little. Even the OpenAI AMD stock swap thing is swapping a gamble on stocks worth real money, not debt.
IMO the first sub-bubble to pop will be all the time and effort wasted on "Startups" that are nothing more than a couple people acting as a wrapper for an AI agent. That's not really going to impact the economy too much on its face, but suddenly a lot of people are going to go from being "entrepreneurs" to being truly unemployed.
Edit: Also, just saw this gem, and THIS is how you get a supercharged 2008 repeat, bank deregulation and $2.6 trillion in lending. Which is exactly how we got to 2008's subprime lending.
- The vast majority of what’s happening here is not debt.
  Most of what is going on in the AI sector is most certainly debt leveraged. Like, I'm looking at the books for several companies deep into AI.
  I mean, how much profit is OpenAI turning right now?
Idk if ghost city thing was a bubble tho.
China used planned infrastructure and bunch of confused journalists in US were like "what kind of government plans for housing of their citizens"
- It was a textbook bubble. They made and gambled on theoretical apartments where nobody involved had any intention of living there or any responsibility or connection to the underlying structure, to the point where building cardboard skyskrapers became a business.. the is no point in denying it. Capital housing investment is a plague on humanity.
- I mean even if it was planned the amount of excess given falling birthrates, doesn't check out either.
- Ah yes "the stoopit west har har" propaganda lol

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
- Almost like they're not losing it, but stealing it.
Will it have Margot Robbie in a bathtub?
- It'd better!
bad on you for letting them use your money
- I don't think you'll find a public company right now that isn't balls deep in the slop machines, desperately trying to offload staff in favour of machines that can't do the jobs.

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?

One reason it’s dangerous is that the rest of the economy sucks, so AI is masking bigger problems which will become evident and tumble out of control when the money has nowhere left to go.
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.
- Pensions in the stock market are the hostage, and are being used as an excuse against regulations.
  Fuck all of that.
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).
- My family lost a great deal of invested wealth in that 2008 crash with the death of Mellon Bank. It does not seem like a lot today but ... if it had been invested in say Chase or G-S... it would have probably been double what it was by now. I am sure my dad was twisting in his coffin when that happened. I am glad he did not suffer that when it happened (he died in 2005).
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.
- I think the top 10% are author of more than 50% of the spending/consumership. That is about to become larger.
- 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.
- Boo hoo. Rich people become less rich.
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 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 don't think it's a bubble, first there is absolutely zero comparison to the housing bubble, which was a financial problem that caused housing prices to inflate, while the inherent value of housing stayed the same. This alleged AI bubble is mostly driven by companies that have lots of money, so it is not credit based, and there are underlying products that actually have increasing value.

The better comparison would be the dot com bubble, which was dominated by companies that didn't even have a product and didn't make any money. The frenzy is similar, but the fundamentals are different.

AI investments may cool down because obviously there is a frantic race in an attempt to get ahead.
But the reason I don't think the AI bubble will burst is because it is driven by companies that actually make money.
They may lose money investing too heavily in this, but the most companies investing in this can afford it.

I think the most AI bubbly company isn't even in the diagram, because that is Tesla. Tesla might actually go down, because Musk is insane.

But in general if it is a bubble, it is a very very long one, Nvidia value has been exploding since 2016 based on their AI product dominance. If this is a bubble, I think it will go down in history as the longest living bubble ever.

Is the market frantic? Yes absolutely.
Is the value of some AI companies extremely high? Yes absolutely.
Is it a bubble that will burst? No if it's a bubble, this one will be more like deflating to a less frantic level, because ALL the main players have the money to weather losses.
And the main AI companies have actual products that make money for them rolled out already. So it is not like the dot com bubble.

And the main AI companies have actual products that make money for them rolled out already. So it is not like the dot com bubble
Citation needed.
- the only company making a profit is nvidia. everyone else is losing.
I don’t think the AI bubble will burst is because it is driven by companies that actually make money.
Last I looked, the big AI companies are all hemorrhaging money.
- It's perfectly normal for a growth business to invest more than they make, I didn't say they were profitable yet, but they are making money.
I think the biggest difference between this bubble and the ones that pop are whether the valuations were built by debt. In this case - no. So when their products turn out to be less useful than they claim, it will devaluate. But the debt issued to build the bubble wont go through a sudden correction that is amplified and causes an even bigger collapse like in 2008 or the dotcom bubble.
- If it doesn't pop, it's not really a bubble, it just looks like it.
In bicycle repair terms it is called a slow leak.
Well argued. Also, even if it is a bubble, it's arguable that most technology innovations are preceded by necessary bubbles which are important for directing investment into emerging technologies. The railroad mania in the 19th century or the fibre optic rollout in the late 1990s, during the dot com boom, benefited humanity long after the froth and excitement subsidied.
Its not a bubble but most people here dont think for themselves. They dont even seem to understand the connection between what news is put out, which analysts they choose to give attention, and for what purpose.
Imagine living your life and just believing whatever someone says in the news just because he has the title of analyst. And never thinking about who profits from that specific guy being on the news at that specific time. Who picked that guy to say what he does and why? Its not random.
Being able to influence the market is key to making a lot of money. How do people think they influence the market? This is how they do it. How else?
Sometimes they probably lose money too, specially when orange man opens his mouth and says something very stupid, like last Friday. But then they position themselves for the coming uptrend and make their money back, maybe even more then they had before, since they have giant pockets.
- Its not a bubble but most people here dont think for themselves.
  But the ones who believe the AI hype think for themselves. Right.
- If people think it's a bubble, then it's a bubble! (Self-fulfilling prophecy.) Google Trends is a decent gauge of public sentiment. That said, the fundamentals are pretty flawed too.
- Especially your first paragraph is probably spot on. Short attention span.

All ai companies should direct all resources to medical research. I mean we would have to do without ai slop summaries for search engines and ai slop images. Well on second thought I guess slop is worth the human cost so let's keep it as it is. I bet I get my wish.

The housing bubble encompassed a metric ton of banks and companies that bought and sold shares of subprime mortgages in the billions of dollars and when everyone stopped paying and started defaulting, that caused a entire economic collapse.

Now unless someone can point me to an analysis where we have some tangible proof that banks and tons of companies are invested, not just using, AI, it seems to me the fall out would be limited to tech companies, which yeah would involve some job losses but nothing on the scale of the housing or dotcom bubble.

Now if you're referring to rich jackasses who are all in and banking on AI taking our jerbs? Sure that bubble will hurt them but they're not driving forces in the economy, just politics, which I guess could cause a economic crash if they get your idiot politicians more scared of them than the people with France on their minds.

True, but consider that a huge amount of retail investors' portfolios are tied to the S&P 500/NASDAQ. Think retirement savings, IRAs, 401(k)s, pensions, etc. Then consider that the entire market is effectively propped up by AI right now (see: The entire stock market is being carried by these four AI stocks). If the market gets a 60% correction, it's going to be the middle class losing their shirts all over again.

It seems like the wealthy propping up their own bubble.

Well, they now control all the money, so they can decide all the value.

It'll crash when there isn't enough electric power to fulfill all those contractual obligations.

They will just cut power to people's houses. What are the Americans gonna do? Rise up and rebel? lol

Source https://www.bloomberg.com/news/features/2025-10-07/openai-s-nvidia-amd-deals-boost-1-trillion-ai-boom-with-circular-deals

They do look like bubbles.

this looks nothing like a cdo

Oh, but you can bet your bottom dollar there are still something like 20:1 ratio of dark-market ~~bets~~ synthetic collateral against these shares further underpinning valuations.
Legitimately fear that this will make the ‘08 meltdown look quaint in comparison, as the fiscal stress will not be limited to shares but impact loads of financial instruments (home and car loans, retirement accounts etc.).
- It's the 20s right now my dude, there is only one way this ends: Great Depression 2: AI Boogaloo

This only got downvotes in another thread. There is far worse that can happen than an AI bubble.

People get distracted over the fate that the pure speculative frenzy could be an AI bubble, and the harm to the hapless speculators and banksters could have a minor impact on the rest of the economy.

Reality is far worse than an AI bubble. It is a US mission for a fossil fueled powered Skynet for Israel that is too big to fail. Bubble in AI investments becomes unlikely, but total destruction of rest of US economy/prosperity becomes assured when the "plebs able to eat in America bubble" bursts is a sacrifice that a fossil fueled powered Skynet for Israel is willing to make.

If Americans are still able to afford to eat, then China or Iran wins.

What
- I think they're claiming TPTB are gonna try and tie dinosaur fuel and vapoware tech as "a matter of security" and constantly bail them out to the detriment of the US economy as a whole
- please be more specific in what you don't understand. I guess that...
  fossil fueled powered Skynet for Israel
  US government needs AGI for US military supremacy. That is Skynet (in Terminator movies, this is the military program to install AI in all the computers, and then AI chooses genocide nuclear launch). It is for Israel's benefit, because that is who owns US government. That it be fossil fuel powered, serves another key US oligarchy. Skynet for disinformation/sediction detection purposes just as much of a threat than its use for nuclear genocide.
  Regardless of whether datacenters will make money solving business and individual problems or boosting productivity, the US will keep investing in order to get Skynet. You can be correct that "frontier datacenter LLM models" will not make money, but still lose on financial bets validating that idea. Instead of an AI bubble bursting, even more money chasing Skynet will come with Austerity for rest of population. The "valuation bubble" only pops when investor money flowing in dries up. It may only dry up after the collapse of the US.
you say that like skynet is a bad thing?

It needs to burst into non-existence.

More like the 2000s bubble.

Anyone more knowledgeable care to help me understand where Anthropic is on this graphic/clusterjam?

Burn it all to the ground

Sell your stocks, I will buy. :)

Timing is a fools game for sure. Bubble could pop next month, next year, or even later.
If you're old, make sure you have a good percent in bonds. If you're young, make sure you have 6-12 months saved in case of layoffs and keep saving - market will look completely different in 20-30 years anyways so it's not worth worrying about.

nvidia500

This is fine 🐶☕️🔥

Everyday Ai

IS there a mundane, everyday Ai ?

License plate readers? Facial recognition? Speech recognition?

Christ, I thought Everyday AI was going to be yet another stupid AI company.

Unpopular opinion, but every nascent industry looks like a bubble. What makes it a bubble is if and when it pops. It anything, LLM AI might deflate and stabilize, but it's also here to stay. In that case, what pops NVIDIA is when they can't expand any more and they go against geopolitical interests that begin stealing and making viable alternatives for the price.

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.

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.
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.
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

Anyone notice how far crypto dropped? I think Tesla's next, then maybe AI at same time or right after

Zoom out past a week? 5-10% swings are not uncommon.
Crypto had it's black monday.
The fall may have been accelerated by portfolio insurance hedging (using computer-based models to buy or sell index futures in various stock market conditions) or a self-reinforcing contagion of fear
Algorithms and feedback loops gummed up all the crypto exchanges and liquidity disappeared.
The crypto tide went out and we all saw who wasn't wearing any shorts.
Isn't crypto being massaged by trump atm, so erratic is kinda the new normal? (And, not erratic from trumps view)
Wasn't that just a temporary drop so that some whales could get richer on shorts?

So the real problem with calling it a bubble is that countries can't stop investing in it. It definitely has bubble like qualities, but we have hit a point where we can't stop investing in it. It's more an arms race then a bubble.

Who is paying? If every workplace needs a $100 or even $1000 per month license then those values are justified.

The people using the AI are training the AI. In 2 years, no competitor can enter the market because they don't know what to do.

Only Nvidia could be overvalued because at some point, OpenAI can design their own chip.

They're all paying each other. That's literally the point this image is trying to express.
What's especially insane is that the companies that are actually providing the service to end users, i.e. Coreweave et al, are not the ones seeing massively inflated prices, contrary to your point about the monthly fees justifying the higher evaluation.
- Why should the fronts have inflated prices? The AI companies can squeeze them at any moment.
it's not AI, regardless of how many idiots repeat that bullshit. It is machine learning with glorified pattern recognition.
Why would anyone want to enter the market? It has no practical use that justifies the energy consumption. Because it is not targeted, for every individual application, there are much more efficient ways to accomolish the same/better results for much less energy.
- It's good enough to answer most questions and it will only get better. Even if it is not AI it is a tool that knowledge workers use and will need to stay competitive.
  And looking at the size of EU investments, only China will build competitors so these companies will own the market.

Look at all those not market related bubbles