Technology

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 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

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.

Investments and income have been divorced from reality for a while now, bud.

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

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.

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.

Can you explain how we're beyond bubbles like I'm 5? Is it that there are gentler market corrections now?

A bunch of brain dead junior Devs who cannot think for themselves

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.

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

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.