Anyone notice how far crypto dropped? I think Tesla’s next, then maybe AI at same time or right after
Everyday AI looks more like the '08 housing bubble
Submitted 6 months ago by n7gifmdn@lemmy.ca to technology@lemmy.world
https://lemmy.ca/pictrs/image/00f953ec-388d-4e84-8b1c-02608aa424b3.png
Comments
LustyArgonianMana@lemmy.world 6 months ago
Knock_Knock_Lemmy_In@lemmy.world 6 months ago
Crypto had it’s black monday. 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.
Alaknar@sopuli.xyz 6 months ago
Wasn’t that just a temporary drop so that some whales could get richer on shorts?
TomArrr@lemmy.world 6 months ago
Isn’t crypto being massaged by trump atm, so erratic is kinda the new normal? (And, not erratic from trumps view)
maus@sh.itjust.works 6 months ago
Zoom out past a week? 5-10% swings are not uncommon.
BC_viper@lemmy.world 6 months ago
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.
plyth@feddit.org 6 months ago
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 Nvidea could be overvalued because at some point, OpenAI can design their own chip.
vithigar@lemmy.ca 6 months ago
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.
plyth@feddit.org 6 months ago
Why should the fronts have inflated prices? The AI companies can squeeze them at any moment.
raspberriesareyummy@lemmy.world 6 months ago
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it’s nit AI, regardless of how many idiots repeat that bullshit. It is machine learning with glorified pattern recognition.
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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.
plyth@feddit.org 6 months ago
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.
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pinball_wizard@lemmy.zip 6 months ago
They do look like bubbles.
Gork@sopuli.xyz 6 months ago
It’ll crash when there isn’t enough electric power to fulfill all those contractual obligations.
SaharaMaleikuhm@feddit.org 6 months ago
They will just cut power to people’s houses. What are the Americans gonna do? Rise up and rebel? lol
Kyle_The_G@lemmy.world 6 months ago
nvidia500
adespoton@lemmy.ca 6 months ago
Looks more like the dot com bubble to me.
Is it just me, or are the bubbles coming closer together these days?
NuXCOM_90Percent@lemmy.zip 6 months ago
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…
MonkderVierte@lemmy.zip 6 months ago
Global economy has inflation since what, middle of the last century? Since slavery and colonies stopped being a thing?
henfredemars@infosec.pub 6 months ago
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.
architect@thelemmy.club 6 months ago
Yep so now when it hits it’s going to be really bad.
WanderingThoughts@europe.pub 6 months ago
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.
Reverendender@sh.itjust.works 6 months ago
Like tax paying individuals
FlashMobOfOne@lemmy.world 6 months ago
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%.
Cethin@lemmy.zip 6 months ago
Basically, Dutch Disease.
Valmond@lemmy.world 6 months ago
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.
queermunist@lemmy.ml 6 months ago
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.
jabberwock@lemmy.dbzer0.com 6 months ago
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.
dragonfucker@lemmy.nz 6 months ago
Can the AI bubble please suck up all the housing investment?
TeamAssimilation@infosec.pub 6 months ago
Specially when those companies are valued in TRILLIONS. Nothing is worth trillions, somehow these surreal numbers have been accepted as hard fact.
IllNess@infosec.pub 6 months ago
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.
ILoveUnions@lemmy.world 6 months ago
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 fo a long time
jerebear39@slrpnk.net 6 months ago
Yep it’s such a fragile situation
gravitas_deficiency@sh.itjust.works 6 months ago
Hahaha this is fine, I am fine with this, what could possibly go wrong
JustJack23@slrpnk.net 6 months ago
Look at all those not market related bubbles
vermaterc@lemmy.ml 6 months ago
So how dangerous that really is? 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 loose money selling cheaper than thy bought. Then AI unicorns will start to loose funding and closing their business laying off people.
But will I, a person who do not work in AI industry and did not invest in AI companies, be affected by this?
scarabic@lemmy.world 6 months ago
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.
teslasaur@lemmy.world 6 months ago
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.
Passerby6497@lemmy.world 6 months ago
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.
Redex68@lemmy.world 6 months ago
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.
Lucelu2@lemmy.zip 6 months ago
I think the top 10% are author of more than 50% of the spending/consumership. That is about to become larger.
1984@lemmy.today 6 months ago
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.
Knock_Knock_Lemmy_In@lemmy.world 6 months ago
Boo hoo. Rich people become less rich.
null_dot@lemmy.dbzer0.com 6 months ago
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.
msage@programming.dev 6 months ago
Pensions in the stock market are the hostage, and are being used as an excuse against regulations.
Fuck all of that.
cyberwolfie@lemmy.ml 6 months ago
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.
sobchak@programming.dev 6 months ago
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 negative 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).
Lucelu2@lemmy.zip 6 months ago
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).
InFerNo@lemmy.ml 6 months ago
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.
umbrella@lemmy.ml 6 months ago