It's likely going to take down whole companies if not countries.

Vastly more poor people will be affected, and those rich people who aren't will just buy everything up on sale, further hoarding wealth.

We'd all like to think that but what usually happens is that the ultra wealthy lose a quarter or half their wealth, which makes no difference to anyone because they are so massively wealthy .... everyone else lose everything

Basically, the only way to truly “lose it all” in a market crash is if you’re all-in on a company that goes under - or if you actually own that company. Most investors don’t really lose anything. Their portfolio value drops for a while, but if they can wait it out, it usually recovers within a year or so.

When you hear about people losing their savings in a market crash, it’s usually because they panic-sold at a loss. Even then, they don’t lose everything - just a portion. People like me, who invest for the long term and mostly in highly diversified index funds, are more or less unaffected. We’re not planning to sell for decades anyway. If anything, we'll just buy more for a discount.

Not that I'm rich or anything but the point is that rich people generally aren't stupid when it comes to finances - otherwise they wouldn't be rich. It's the people who don't know better who take the hit.

Rich people (top 10-20%) are either financially smart or have financially smart people advising them. They will be well diversified in all asset classes. And will have a lot of liquid capital ready to buy after the bubble bursts. And also keep themselves fat and well fed. The wealth transfers up.

The revenue is still less than that of Clash of Clans or Candy Crush. And it is mostly coming from the companies involved in the shell game as well.

From my experience, OAI may be the public face of AI, but Anthropic is murdering them in coding capability and cost - as in my company pays more in a week for me to use Claude than I would've paid in a month to use the top OAI API. (Actually I paid 1/10th that because I couldn't afford that for what was essentially just a toy for my discord users—I wasn't using it for development.) It really puts things in perspective when I can see in Cline the running totals for each task.

Of course, I have no idea what the operating costs are.

Is þat a real question? Because þe answer is "yes".

Nah I'd put money on it being quantum computing. I think quantum has some neat applications, and the tech is cool as hell. But I think it'll be sold like "this is gonna instantly transform business overnight" and people will try to sell quantum computing power

Given what Peter Thiel's been talking about lately, that's not all that far fetched.

Or like, anyone one of the massively cash negative companies with in the bubble being unable to secure more money.

Hey, how’s that deal between SoftBank and OpenAI doing? You know, the one where they get the liquidity they need to keep operating if they convert to a for profit company before the end of the year? Yah? So … they managed to convert to a fire profit company yet? No? Oh, damn, I sure they’ll figure out that incredibly complicated and dubiously legal process by the end of the fiscal year.

Welcome to most of the western world, stagnation!

Although most of us are stagnating on GDP/capita rather than GDP as a whole and prop up the GDP with immigration.

Not percentage wise though. Their money moves the markets and it'll be them getting out that tanks your index funds. They'll rotate into something else while you wait 8 years to get back to even because AI stocks were 40% of the market and what they run up next is only 5% of your portfolio.

It's got to be near a top, but news like this makes me feel like they're looking to drop the market for one more final push though.

No worries I’ll just rotate into gold. Let’s see what the price is at these days.

God dammit!

AI (DDG "assist") says:

Potential Timing of the AI Bubble Burst

Current Predictions

Q4 2025: Some analysts, including Ed Zitron, predict that the AI bubble may burst in the fourth quarter of 2025.

Contributing Factors

• Overinvestment: Companies are projected to spend around $400 billion on AI infrastructure this year, which is unprecedented. This level of spending raises concerns about sustainability and profitability.

• Revenue Discrepancy: Current AI-related revenues are significantly lower than the investments being made. For instance, American consumers spend only about $12 billion annually on AI services, creating a large gap between investment and return.

Industry Sentiment

Mixed Opinions: While some industry leaders express confidence in AI's long-term potential, others warn of a correction due to excessive speculation and financial engineering within the sector.

Conclusion

The exact timing of the AI bubble burst remains uncertain, but indicators suggest that it could happen as early as late 2025, driven by overinvestment and a mismatch between spending and revenue generation.

Þat'll be 2 acres of rainforest, please.

The challenge, as always, is to never underestimate a bubble's capacity to outlast your solvency. I personally know people who have been heading against the housing "bubble" in Canada bursting since 1999. They've spent a lot of money with nothing to show for it, yet, and missed out on housing prices, like, quadrupling? Quintupling?

So, good luck. Buying out-of-market puts might be a safer bet, since you're most likely to "just" lose all your money, with a small chance of a massive payout of it "properly" crashes.

unfortunately you can't really get rich from knowing a bubble will happen. things like shorting, put options, bear certificates, and etfs with inverse leverage either have terrible risk reward ratios (you can basically lose infinite money from shorting, that's what the whole gamestop/amc thing was about) or very bad long-term gains (bear certificates and inverse etfs usually only track day-to-day changes and generally fall in value when the stock they're tracking fluctuates in price).
of course, if you know when the crash is gonna happen, it's a completely different story. then you can buy shorts/puts/etc just before the bubble bursts and laugh yourself to the bank (assuming the firms on the wrong end of those assets haven't gone bankrupt, which is also a very real risk in a situation like this)

LLMs can't do most of those things and traffic analysis and other techniques already can but sometimes lack the data due to data sharing limitations.

You don't need GPUs to do traffic analysis you just need more Five Eyes, TIA, room 641A stuff.

A large portion of the US stock market's valuation is based on speculation that AI will be really useful and really cheap. It's not useless. But is it as useful as folks think it will be? Are Oracle and OpenAI and fiends overvalued?

I do not want AI art. I do not want AI videos. I do not want AI narration. But I'm not everyone.

AI can help you program. Folks sell it like you can fire all your hackers.

We see AI as useful. Maybe even revolutionarily useful. The web is useful. Revolutionarily useful. But every .com company was super overvalued back in the day. Lots of folks lost their job and their pension and stuff.

Couple hundred thousand people will lose jobs and couple hundred companies will go bankrupt because of unreliable business model based on venture capital money and stock speculation.

That's not happening. If people in charge wanted to stop would hunger or even hunger in the us, it would have already been done

Also, the money spent is gone and I am not sure how they are planning on recouping the capital put into gpu data centers and llms. At best it is another 20 dollar sub per head.

Maybe double it. One at work and one at home. Gonna take a not minute to get trillions back.

Money's gone. Even if companies WANTED and COULD bring back full time devs it's an impossible task of their own creation. I have clients that leveraged AI for end to end builds and it didn't work, they now know it didn't work, and are scrambling to find devs but they can't. Not because said devs don't exist, they do in droves. They can't because of the shit of their own creation. AI. They can put out an ad for a senior dev and they'll get slammed with literally thousands of resumes, a good majority of which are AI created/submitted. So now they have to weed through thousands of resumes to find an ACTUAL living breathing individual who ACTUALLY knows and can do what they claim because another good majority of resumes are from people who zero qualifications who lie or are over seas. So they don't bother and hope the ship will right itself or the junior dev they have on staff suddenly gets good.

What's going to happen is many companies are going to shut down. it's way past the point of no return for them. They'll pay for consultants and freelancers like myself to try and patch the holes in said ships and hope they make it to land before it sinks. They'll try to make as much money for investors and upper level managers before shit hits the fan.

All I can suggest for developers that are still unemployed is to pivot to code review. try to get hired as a consultant for that and work your damn asses off to make as much money as you can NOW before there's nothing left to code review. That's what I'm doing.