AI investment has helped keep markets and economic growth ticking along, but the IMF fears the boom could quickly turn to bust if the promised profits fail to materialize. With tech giants borrowing billions and investors piling into the same handful of companies, a selloff could leave more than just Silicon Valley nursing a hangover.
If so, the technobros did this. The technobros should receive most of the consequences. There should be dire consequences but we all know who will receive most of that. The system is broken.
in a sane world. in this world, where the system is working as intended, tech bros will reap rewards at our expense. hopefully the working class response will be of a scale commensurate with the scale of the injustice.
I’ll stand with you! ✊
Sorry. The techbros will get bailouts. Its the pensioners that will starve.
It’s the pensioners who made most of the money from NVDA and MU price graphs going vertical anyway. Friendly reminder that people over 55 own 73% of the US, much of it via index fund based retirement funds and such. Isolating just the boomers, they own 8x more wealth than billionaires (though there’s a fair bit of overlap of course, with a lot of billionaires themselves being boomers). Total over 50% of the US (including everything from cash to real estate to stocks) is owned JUST by the boomer generation.
Which is not to say the techbros aren’t the problem, but in absolute dollar amounts, they’re not actually the biggest beneficiaries - only per person did they make more money off this. Not as a class.
Remembet that they don’t have the money to do it. It’s also investors to blame.
Oh absolutely, investors doing no due diligence on their part is complicity.
That’s why the techbros made sure to buy the politicians.
This will be like 208-2012 but this time around it’s the techbros businesses which will be deemed “Too big to fail” and get saved with public money and the central bank printing money to buy their bonds, whilst everybody else pays for it with Austerity.
*Techbros
Techno-bros raving at the club
you will have to dish out those consequences otherwise it won’t happen.
“Greedy shitbag tech bros pushed it. Greedy shitbag investors threw every penny at it. So whoops, the whole world is held hostage. Sorry fuckos, you, John and Jane public, are going to pay to save the global economy. Greedy fucksticks aren’t allowed to lose.”
…can’t wait.
The whole AI bubble is just one big bet: “AGI is around the corner and will replace all white collar jobs”
Now, LLMs get slowly better but aren’t AGI and it’s unclear if our current approach is even capable of reaching AGI.
Sadly the US went ‘all-in’ on the bet and everyone except the ultra rich will feel the pain.
The lack of progress is one thing.
The value for money is another: AI companies are still burning through vast sums of capital, while users are indeed using the products more and more… but still nowhere near at a price that would even cover the companies’ costs, let alone be profitable. If each token costs a few dollars, demand is likely to shrink significantly again… because as long as the systems operate stochastically and, logically, produce erroneous results, it may take a very large number of tokens to obtain a result that’s actually usable (this is especially true when using AI to replace workers whose tasks and skills you actually have no clue about).
So even if the bet materializes, we lose. If it doesn’t, we also lose because the economy implodes. Fun times.
Best thing about this whole AI bubble is that the mask is off and everyone can see. The rich will dump us in a instant.
AGI will never happen with LLMs, but if you think in terms of a human brain out can be effective language and output and image recognition module. But there’s no there there. Something else entirely is needed for true thought and sentience. But llm ai is already sufficient to translate machine thought into language sentences. You just need the spark of life that can actually think for itself.
You just need the spark of life that can actually think for itself.
I know it’s probably not intentional but you make it sound as if “just putting a spark of life” into the machine is easy
It may be easy. The issue is that nobody knows what that even means.
No, the spark of life implies something magical or unknown that you can’t make. Like a human can never make a spark on their own, you need something from the outside to make it or happen.
like god? \s
They know climate change will take down capitalism. They are hoping for AGI to save them.
if the promised profits fail to materialize.
What profits? Nobody has money to spend and llm companies lose money on $200/mo subscriptions.
They lose money on those $200 a month subscriptions, but e.g Anthropic won’t let you use the sub outside of Claude Code, so for anything that would use their API, $200 gets you less usage than one 5-hour session of that subscription.
Which doesn’t stop them from losing a bunch of money to training though
don’t stop, i’m so close
Removed by mod
It’s not just sustainability. Dicks who think they can rule the world need a reminder of thier mortality.
Buffett Index: total stock valuation vs. GDP
1928: 130%
2007: 130%
2025: 220%
Now guess where most of that stock growth and GDP came from? I’ll give ya three guesses, but you’re only going to need one.
unexpectedly good churro sales?
The Legend of the Whopperito™?
I can’t believe it’s not salsa?
Propane and propane accessories?
Yeah the “business” tycoons do that every decade or so. Some busts are bigger than others. Not much any of us can do about it unless we tax the hell out of corps and wealthy so that they can’t build enough self serving shit to then dump the economy once they’ve scraped as much money as they can in the current cycle.
I’m convinced at this point the goal is to just not use money. Why do we have to be tied to this shitty fiat currency that isn’t directly tied to physical worth?
Yep, that’s the point at which people will recommend gold (which I’ve never trusted, either) or real estate so you’re not homeless when everything goes poof.
The economy as it stands is a house of cards built on promises no one keeps but enough people believe.
I have never claimed to be an expert on anything but the moment you let the fate of something rest on the guess of how much it will cost if everything goes the way you think it will, when the other half of the room hope it goes the other way seems mad.
please.
Could???
Find out by tuning into the next season of The Economy!
Good.
COVID took the global economy with it.
Losing AI would be like… I don’t even know, insignificantly small compared to that.
If AI up and disappeared tomorrow when I clocked into work, it might actually make my job easier. I could be even more productive without having the slop floodgates open every day.
The problem is not the “losing of AI”, it’s the loss of human and physical resources that went into AI and will ultimatelly yield little or no Economic value when they could have been gone into productive Economic activities.
The human part is similar to COVID - people’s time that could have been used in Economically productive activities was lost and will never come back - however the AI bubble differs in that actual physical resources have been wasted (mainly building and equiping datacenters) whilst during COVID fewer physical resources were used (mainly in vaccines and PPE).
Also the AI bubble is mostly concentrated in the US, whilst COVID was global, which means that the damage of it blowing up will probably be worse in the US, whilst that of COVID was much more diffused.
But the really big things is not even the AI bubble blowing up per-se - it’s that there are other bubbles which are ready to blow (such as realestate Worldwide and auto-loans in the US) plus a worldwide Oil crisis caused by America’s war against Iran, so the Economic shock of the AI bubble blowing will be amplified by the latter and will likely make the former blow up, almost certainly adding up to even more damage that the 2000 and 2008 Crashes (possibly as much as both put together).
COVID was a slowdown of Economic productivity, this shit will probably be the Find Out stages all on top of each other of years of Fuck Around misallocating resources in multiple Economic domains.
If profits are what will make it fail. It is going to fail. They need everyone to subscribe to their premium tiers at this point.
Wouldn’t matter. The cost to execute the tokens is greater than the subscription. It’s all VC funds that they’re burning every day. It’s inevitable to fail unless they can convince every day users to pay $2k a month
I’d pay them 2k a month for every month they pay me 10k for. Ofc I need to be paid first because otherwise I won’t have the money to pay them and still comfortably live.
No that’s kinda the point. If AI charged for actual cost, no one could afford it. It’s all subsidized now. Basically a money shredder
I know, I was making fun of them by suggesting a “give me your money and then I’ll give you some of my money”-circlejerk because that can never be sustainable in the long run.
API costs start to approach the operating costs of these systems. The ultra premium subscription tiers still lose money.
Tech has high market value because there’s the potential for growth, and the cost to grow is minimal after the initial startup costs. Adding a subscriber to a newspaper costs, say $0.20 for each subscriber; adding a Facebook user has a cost approaching zero as the user count grows. The problem with GenAI is that the inference cost grows linearly with usage, and the constant creation of new models means the training costs are also not recouped.
The debt the datacenter builders are taking on are being traded as junk with high interest rates already, and they’re going higher. They’ll never generate the income that the rates demand much less recoup the cost of building.
The problem with GenAI is that the inference cost grows linearly with usage, and the constant creation of new models means the training costs are also not recouped.
probably even slightly more than linear at this point as they use up so much electricity and other resources that it becomes more and more expensive to serve more users. User 1 is easy, that’s just the existing data center. User 1 million, well, you need a new datacenter and drive up hardware prices, but it’s fine. User 10 million, you need to build/rent gas power plants, figure out where to get water from, RAM and everything costs 5 times as much as it used to, bribe local politicians to build despite backlash etc.
Burn it all down!
