It won’t disappear, but the business will drastically change, and the knock-on effects will be serious.
My pronostic of Q1 2027 is looking as good as ever!
Anyone thinking this means the technology will disappear will be sorely disappointed.
Yeah it won’t go away but my job will mostly go back to normal. Right now they force us to use AI for everything even the stuff it sucks at. Even if I can do a better job manually they force me to use it. It’s insane.
I want to use it to help me with the stuff I suck at and let me do the stuff I am good at. I can’t wait for that to start. That’s how I have used it in my personal life and it’s been actually helpful. Not life changing though just helpful
Agreed, but maybe we can hope it won’t be crammed down our throats quite so hard as investors stop demanding such big returns?
A girl can dream, anyway…
Let it brust, look what people do for money, power even to make their race first.
Still time to inflate more. This season is still building up to the biggest and baddest. At the start of this season we hear names like Mythos and Glasswing but they don’t mean anything. Now we’ve learned they’re a new and faster way to discover vulnerabilities in software. The foreshadowing is building. We have the date, we know the upcoming catastrophe. In July, they will make public thousands of new software vulnerabilities. The internet will panic, software companies will spend billions on ai service to handle the damage. Anthropic will have a record IPO, followed by other AI companies. It’ll be YUGE. Stay tuned for the cliff hanger
When is this burst gonna happen?
Knowing that would mean the ability to make lots of money off of it but nobody knows for sure.
Not soon enough.
Pop already I can’t wait to see the cryptoturds and the prompturds cry
I’d agree, except it’ll ripple out to innocent regular people as well, just like the 2008 Great Recession, if not worse.
When regular people lose a lot of money, the richest get richer or are largely unaffected.
When the super rich lose enough money to actually hurt them, their interconnectedness with and control of everything that regular people need to survive means that millions if not billions of people will suffer immensely, up to and including dying because of it.
Hurry! The government should buy 50% of its value like Bernie says.
Get ready for GFC #2.
This one will be a lot worse than the sub-prime mortgage crisis, as AI investment has left many major banks, index funds, and most of the top 10 most valuable companies in the world heavily exposed, and the world governments are already at historic levels of debt - meaning a bail-out even if desired by those in power, may not be possible as it was in 2008.
Also there is more than 1 bubble that’s pretty much fully inflated right now: for example, Realestate.
Further, household debt has never been this high and is well beyond 2007.
Then on top if this there’s the record government debts in some countries (most notably, the US) and the weakening of trust in the USD thanks to a certain Mr D. Trump which might result in it losing its Reserve Currency status much faster and event which would be massive, especially for the US Economy (it could very well trigger Hyperinflation).
When the AI bubble blows it will at the very least cause other bubbles to blow.
IMHO, this shit is going to be something of a level of the 2000 crash AND the 2008 Crash put together, possibly worse (especially in the US).
So on a scale of Great Depression to Dot-Com to 2008 Housing to Covid, where will this AI bubble burst land?
I would say it depends were in the World you are.
For one, the AI bubble (not necessarily AI as a whole, just the insane bubble around it) seem to be far bigger in the US than the rest of the World.
Also, I’m not so sure there’s quite as many lines of contagion between the US and the rest of the World for it. Granted, when the tide went out in 2008 it turned out there were things like German Landesbanken (regional banks) exposed to the subprime bubble in the US, so who knows who is actually exposed to the bubble in the US via indirect and more obscure channels such as loans to datacenter companies via the money markets.
My gut feeling is that in the US it will be close to Great Depression, in Europe it will be around the Dot-Com crash (possibly worse since most countries in Europe are deep in a housing bubble, though it depends of Europe’s exposure to the AI bubble in the US) and in places like China it will be more towards the Covid end of it (China’s investment in AI hasn’t been at all following the same Financial model as in the US).
That said, this is all a bit of guessing. I was in Tech in the DotCom crash and in Finance in the 2008 Crash so I like to think I’m a little better informed than average, but I’m still guesstimating:
The fundamentals look very bad (high consumer debt, overvalued USD juding by US prices, horrible P/E rations of most of the companies involved in the AI bubble, insane IPO valuations for the upcoming big AI IPOs and the whole shenanigans with indices that will push the losses to index funds and hence retirement funds - things which in turn might trigger a confidence crisis in US Markets - and so on), but who knows how tightly coupled things are or not with the rest of the Economy (especially outside the US, in the US there seems to be tight coupling with a lot of things via things like datacenter building and the impact of AI on corporate risk profiles and job markets), especially after the nasty experience some institutions had back in 2008 from things like recklessly exposing themselves to US Markets? It might very well turn out that by reducing trust in America Donald Trump was good for the rest of the World which won’t be quite as exposed to the US when shit hits the fan than they would otherwise.
Time will surely tell.
Let’s see how many governments will end up with a D rating. The USA are probably a given but this might set a lot of major companies on fire so who knows who else will run out of money.
Of course China is laughing all the way to the bank. Their economy isn’t super healthy right now but they aren’t reliant on semiconductor companies that chained themselves to the AI racket. So they might weather the crash mostly unharmed and we’ll all end up buying Loongson in the future because all of the x64 and ARM companies have folded.
Will it stop the invasion of data centers?
Wouldn’t it be neat of a ton of really rich assholes, suddenly woke up poor?
Oh no, I was a billionaire now I’m slumming it with 700 million…
More common: I am 65 years old and my retirement just imploded.
Yes, but they’ll socialize the losses.
That’s not gonna happen though. The rich will stay richer and the common pleb will be the ones carrying the weight of their failure.
If only this only impacted them.
The flow on effects of a major market crash are never isolated to just the stupid assholes building the bubble.
Well this poor bastard (me) will be waiting for the RAM, SSDs, and hard drives to come back down in price.
They won’t. Corporations will never shed profits like that. They figure, regarding the jacked up price, that ‘people have shown what they’re willing to pay’.
Except consumer demand is way way way down. The prices won’t go back to what they were but they’re going to have to drop considerably if the corporate money dries up. No one is buying it and they still need to sell it. Part of the reason things are so bad is they don’t want to build more capacity and get fucked by a huge drop in demand like has happened before where RAM prices bottomed out to the point they lost money on the RAM they were selling.
There’s always an optimal point between demand and price. Ignoring part of your customer base is a risky strategy. The gap will almost certainly be filled by competitors, such as the upcoming Chinese semiconductor industry.
The Chinese manufacturers will be happy to claim that gap in the market, and in a few years after they get established and ramp production they’ll start undercutting everyone on those high margin data center products they abandoned consumers to focus on.
As long as someone is regulating companies, competition should, in theory, reduce prices.
Yup, but also they need to have a stock for it.
Summary of the article, why and how?
The summary is “we’re not your LLM. It’s only 9 paragraphs. Read it if you want to join in the discussion.”
It’s literally the first two paragraphs lmao
While the index hit another record closing high, it was only 21 stocks that led it there — just one more than the 20 that propelled the dot-com bubble to its peak before everything came crashing down in 2000.
Other key red flags behind recent performance include what Hartnett called “speculative” and “exponential price action;” overvaluation of firms that have yet to produce earnings relative to their stock price; a high bull & bear indicator; extreme imbalance and over-concentration, with only 10 stocks comprising two-fifths of the index’s power; and the fact that the vast majority of S&P components (upwards of 330) are now sitting at 20-40% below their previous highs.
Basically the market conditions are similar to when the dot com bubble burst: few stocks made up majority of the index power, overvalued firms, and majority of stocks are 20-40% below their previous highs.
I don’t click on links because the articles are almost always clickbait with walls of irrelevant fluff text, generally.
Thanks for the conclusion at end cause I didn’t get the stuff above it lol.
Summary: bubble gonna burst, when not if
Why: it’s a fucking scam propped up by venture capital
How: as soon as companies start getting charged the actual token cost they drop their subscription and for some reason investors don’t like this
But the next hype is just around the corner. But this time it’s for realsies, promise!
Yup. Cost for copilot at my work just went up and the tone changed from, “Use it everywhere!” to, “Use it where it makes sense.” I mean, that should’ve always been the guidance but as usual the vendors gave them a good show with their shiny new tech, execs came in their pants, and the engineers were expected to make magic happen.
My work went from unlimited copilot tokens to $15 per person per month. It’s effectively useless for real work now lol
My teammates who got hooked on copilot are livid, it’s great
Good to hear.
Any more on the “when”?
Would like to see it pop already.
Need to look at the hardware cycle as nVidia is still making more efficient hardware to bring the $/token down. BoA dude probably got burned on some loser AI companies that don’t have enough compute to deliver before the bills are due and is extrapolating it to the whole industry.
First, Nvidia isn’t on a trajectory to bring cost per token down, that’s not how the finances of a bubble like this works. nVidia is enjoying near monopolistic status, as your choice to ignore options from competitors in your comment illustrates. Even if they had credible evidence that Rubin could reduce the overhead of a hypothetical datacenter by 10 million, the business will probably price it at 12 million more (the “value” of the savings plus the value of being able to brag about offering the latest generation). The cost optimization will only come after the bubble pops.
Incidentally, a significant leap in efficiency could also pop the bubble. The bubble is predicated on all this eventually being very expensive and high margin. If it becomes more accessible without gigantic investment, well the walled garden business won’t stand up. An abundance of supply can pop it just as much as a failure of expected demand. We are talking about the economics of the bubble, and a hypothetical improvement in the merits of the tech does not necessarily map to economic results and in fact commonly is opposed to it.
I heard google is shifting to per-token subscription models that are much more expensive, and other AI are changing their pricing models too?
The article gives no specific timeline, but given the amount of Ed Zitron peacocking lately I can’t imagine later than the end of the year. My uneducated guess.
With openAI, anthropic, and spaceX all going to IPO within ~6 months of each other, it’s absolutely going to be this year.
