'It's going to be really bad': Fears over AI bubble bursting grow in Silicon Valley

[Mr. Sparkle]

Source: BBC

At OpenAI's DevDay this week, OpenAI boss Sam Altman did what American tech bosses rarely do these days: he actually answered questions from reporters. "I know it's tempting to write the bubble story," Mr Altman told me as he sat flanked by his top lieutenants. "In fact, there are many parts of AI that I think are kind of bubbly right now."

In Silicon Valley, the debate over whether AI companies are overvalued has taken on a new urgency. Sceptics are privately - and some now publicly - asking whether the rapid rise in the value of AI tech companies may be, at least in part, the result of what they call "financial engineering". In other words - there are fears these companies are overvalued. Mr Altman said he expected investors would make some bad calls and silly start-ups would walk away with crazy money.

But with OpenAI, he told me, "there's something real happening here". Not everyone is convinced. In recent days, warnings of an AI bubble have come from the Bank of England, the International Monetary Fund, as well as JP Morgan boss Jamie Dimon who told the BBC "the level of uncertainty should be higher in most people's minds". And here, in what is often considered the tech capital of the world, concerns are growing. At a panel discussion at Silicon Valley's Computer History Museum this week, early AI entrepreneur Jerry Kaplan told a packed audience he has lived through four bubbles.

He's especially concerned now given the magnitude of money on the table as compared to the dot-com boom. There's so much more to lose. "When [the bubble] breaks, it's going to be really bad, and not just for people in AI," he said. "It's going to drag down the rest of the economy." However, at the Stanford Graduate School of Business, which has minted its fair share of tech entrepreneurs, Prof Anat Admati says while there have been many attempts to model when we're in the bubble, it can be a futile exercise. "It is very hard to time a bubble," Prof Admati told me. "And you can't say with certainty you were in one until after the bubble has burst." But the data is concerning to many. AI-related enterprises have accounted for 80% of the stunning gains in the American stock market this year - and Gartner estimates global spending on AI will likely reach a whopping $1.5tn (£1.1tn) before 2025 is out.

Read more: https://www.bbc.com/news/articles/cz69qy760weo

[EYESORE 9001]

1. Can we train AI

to recognize a frickin’ tech bubble? The humans in charge are too full of hubris.

[IronLionZion]

19. Humans like money

so spewing lofty promises helps them get more money from investors. MAGA politics works the same way

[EYESORE 9001]

21. I'm reminded of a story about capturing monkeys in the wild

It involved a jar full of rice with an opening just large enough for the monkey’s hand to fit, but too small to allow the monkey’s fistful of rice to exit the jar. Monkeys would maintain their grip on that precious thing in their grasp, even as their captors approached and placed the animal in real restraints.

[mwmisses4289]

2. Who didn't see this coming?

Oh, right, the tech oli's who overvalued their tech.

[OldBaldy1701E]

4. They saw it coming

They did not care.

[Bernardo de La Paz]

8. Nonsense. They do care. It's money. It's a lot of money.

They knew / know there is a risk of a bubble, but they feel they are in a mad scramble to avoid having their company left behind. To some extent they are right, they could easily be left behind. But yes, there are hucksters taking advantage and along for the ride.

I think the bubble has formed and is large enough that it could pop at any time now. However, it could go another year or more before popping. My best guess is sooner rather than later, because economic conditions and stock markets are depending on everything going just right. Labour is tight (low hire, low fire, and fewer migrants for workers on the low end). Earnings per share are at market top levels. There's a lot of business uncertainty and supply shocks (leads to stagflation).

One example that strikes me as frothy is Rick Perry's (yes, the politician) company Fermi which just went public in an IPO valuing it worth several billion dollars while it has no sales and few assets. It wants to build infrastructure for data centers and data center power.

[OldBaldy1701E]

22. They knew they were being crazy with their ideas about growth and income and damage caused, and they still did it.

So, they knew what they were doing.

Yes, they care about money. That is all they care about. Otherwise, none of this would be happening. The fact that they are still more concerned with making money rather than the social and environmental damage that they are perpetuating in their quest to 'not be left behind' is why I say that they don't care.

Greed strikes again. If we could just stop with the idea that Gawd favors those with the biggest bank account...

But, we all know we can't do that. We are too programmed to keep on doing what we are doing, regardless of the damage or the outcome.

That is why I say that they don't care. They know that we will do little to stop them, because making lots of money is the American Way*. (*Certain Restrictions Apply)

Which is why it keeps on happening. I am occasionally surprised that most of the country is still livable, considering how we just don't care about any of it when the money is rolling in.

[Igel]

36. Sure, they knew what they were doing--making claims and asking for funding.

Lots of people make claims and ask for money. Most of them don't have people shoveling money at them hand over first and no more cause bubbles than the crazy guy on the street corner pushing some lunacy.

Who caused it? Not all the people around the edges praising it and saying how wonderful and glorious it will all be and how it'll be truly, truly awesome. Most of them just talked (but some chucked government subsidies at the local, state, or federal government) at them.

I guess we could blame board members who authorized a lot of corporation support for other corporations. But they just used monies that they had gotten from outside their corporations from the truly guilty.

And that would be the investors. Maybe money market funds in our 401s or 503s. Maybe state and federal pension fund managers, with their trillions. Maybe private pension managers or other fund managers. Maybe the occasional wealthy person that has a financial guru actually guiding their investments in specific stocks.

Bubbles may be promoted by talk but they are caused by money. A few "influencers" can say how brilliant the crazy guy on the corner is, but unless people believe them the crazy guy on the corner only affects a few similarly crazy wannabe influencers. But once the crazy guy has a large number of followers, *they* can do some real damage.

[dweller]

3. Maybe it's time

For A I to enslave mankind and take over the world as promised ?

sorta



✌🏻

[UpInArms]

5. When AI can actually do something, I will applaud

But, until it can plow snow off a highway

Pick up garbage from the streets

Weld a broken machine back together

Prepare dinner for a family and set the table

Do the laundry and hang it on the clothesline

Plant a garden and pick weeds
….


I will just call it a toy that peeps can play with

[Bernardo de La Paz]

6. "Until cars have rear view cameras they are just toys. Only good to play with."

AI is being deployed much more than you realize. It is much more than a toy. You are interacting with it every day or at least using the fruits of its labour in products and services.

What you are talking about are humanoid robots. And that is a very high standard you set. It's as if you were in 1925 and said "I'm not going to buy a car until it has cruise control, electronic door locks, a rear view camera and air conditioning. Until then I'll just call it a toy."

"peeps"

[yardwork]

13. This conversation illuminates why it's hard to predict winners and losers.

There's a wide range of understanding, from one extreme to the other. Supposedly smart commentators and investors aren't necessarily smart or informed. (In a thread yesterday DUers discussed an opinion column in WaPo by a British "financial writer" who had predicted that the iPhone would go nowhere and was a Brexit promoter. Yesterday he was promoting Trump's tariffs and mocking economists who were "wrong. I imagine that guy makes a lot of money going around being wrong most of the time.)

AI is on the edge of changing just about everything - including medical research. (I think the billionaires recognized that and that's one reason NIH is being obliterated. They want all the new drugs and discoveries for themselves to sell. They don't believe in the common good.)

But there's also a lot of garbage. Garbage companies, pump and dump schemes, lots of cons. And most of us don't have a clue which is which. There will be a crash like there was with the housing market in 2008, but houses didn't go away then and neither will AI.

[Bernardo de La Paz]

18. Yes. You share a good perspective. . . . nt

[yardwork]

20. Zuckerberg, Gates, and many other billionaires have been funding medical research.

They've been soliciting grant proposals from every medical researcher in the world for 20 years. They noticed the revolutionary potential for AI in drug discovery. That potential made a huge leap forward in the past few years for reasons I couldn't begin to explain.

I suspect that is why it became urgently important to put a moron in the White House with moron sidekicks like RFK, Jr. who would be easily manipulated into eliminating public support of the research. In real time this summer I'm watching brilliant scientists leave academe and go to work in industry.

Follow the money. Who will benefit from forcing research into the private sector. Who will own the intellectual property. Who will control who gets to buy and use the new tools and products.

It's a human tragedy. Discoveries that would have been in the public sector are disappearing into private industry and China.

[hunter]

34. The scientists who intuitively "know" how to use AI to make medical discoveries will be rare.

The rest will be a bunch monkeys pounding away on typewriters hoping to recreate the works of Shakespeare.



https://en.wikipedia.org/wiki/Infinite_monkey_theorem

[yardwork]

43. It's much bigger than that.

Nanotechnology and AI are making it possible to discover effective therapeutics 1,000s of times faster than before. Five years ago it might have taken a computer program 10 years to assess millions of compounds. Soon this will be possible in seconds.

It's a truly revolutionary change. We're on the edge of a change comparable to the invention of the printing press, for instance. Its more than just using ChatGPT. It's bigger than the invention of cars and planes.

[hunter]

63. The notion that humans are infinitely repairable machines is absurd.

We're not like the automobiles in Jay Leno's garage where even the exotic stuff like Chrysler turbine cars can be repaired.

From an evolutionary perspective humans who had fully functional grandparents around, biological or adopted, were more likely to survive. Longevity beyond getting our grandchildren to reproductive age was mostly irrelevant. After that we humans become less functional, eventually suffer some fatal system failure, and get recycled into the biosphere.

I don't think there is any magical way to sidestep that reality. I'm not saying it's not worth trying, but not to the extent that people already living are deprived of necessities and comforts.

The end point of medical progress is that is we all die of our own unique diseases or highly improbable accidents. As we approach that limit medicine becomes increasingly difficult. If we haven't hit the point of rapidly diminishing returns yet, at least for the more affluent members of society, we may be getting close.

I tend to associate this line of thought with the Fermi Paradox. In this universe certain things may not be possible. Faster-than-light travel might be one, time travel another. It's also possible that the longevity of naturally evolved intelligent beings such as ourselves is constrained in ways we do not understand and could not change even if we did. It may be impossible to maintain complex systems such as ourselves and the systems required to sustain us across light year distances at sub-light speeds.

In any case there's no point in building environmentally destructive and expensive supercomputers to find new drugs if that environmental destruction and economic displacement these supercomputers cause kill more people than any potential medical discovery would help.

[yardwork]

69. Those are all very good points.

However, most babies used to die before their 5th birthdays. Vaccines changed that. My friends and relatives with breast cancer are grateful for new treatments that mean they can survive until their children are adults.

To me, it's never about trying to be superhuman or live forever. That's a fool's dream. Public health and medical research has made the lives of ordinary people better, though, and I think that's a good thing.

My mother died a slow agonizing death from dementia. I would give a lot for her to have had effective treatments. She wouldn't have asked to live a longer life, just a better life for those last five years. She literally asked me to kill her. It was that bad.

Now we're going backwards. Children are dying of measles and diphtheria.. Prisoners are dying of TB. It breaks my heart. There's a better way.

[customerserviceguy]

50. Business loves AI for one reason

They know it is a tireless huckster, which will pry into every possible area of your life, in order to pitch overpriced, underperforming crap at you that you don't need, and probably can't afford.

[Bernardo de La Paz]

51. Yes, "tireless huckster". But no, there are lots of reasons for AI that have nothing to do with prying. . . .nt

[thought crime]

70. So, Robots. They're on the way.

They will also do all the work and send us their paychecks.

[Blues Heron]

7. 6 fingered ai portraits and they think it's going to run the world? Do they know humans only have 5?

It’s just fast computers, garbage in, garbage out.

[Bengus81]

10. LOL..how many toes did Traitor Green have in that picture of her months back?

[Bernardo de La Paz]

11. Maintain that attitude and you will be overtaken by events.

Maybe when personal computers arrived you said something like "nah, just a way to collect recipes", like Ken Olsen did according to legend. He got overtaken by events and lost a large computer company.

In 1977, referring to computers used in home automation at the dawn of the home computer era, Olsen is quoted as saying "There is no reason for any individual to have a computer in his home."[12][13][14][15][16] Olsen admitted to making the remark, even though he says his words were taken out of context and he was referring to computers set up to control houses, not PCs.[14] According to Snopes.com, "the out-of-context misinterpretation of Olsen's comments is considered much more amusing and entertaining than what he really meant, so that is the version that has been promulgated for decades now".[17]

Now homes have computer controlled HVAC systems, computer controlled security systems with remote telemetry, computer controlled communication systems, computers in the solar panel system and the electric car charger, computers running entertainment systems, computers in the microwave, fridge, and dishwasher.

Quantity (hyper-scaled artificial neural networks for example) is not the same as quality, but scale (high quantities) creates new qualities.

[Blues Heron]

12. Let me guess, you have ai stock

[yardwork]

14. Anybody who has a retirement fund is invested in AI.

If you have an IRA, pension, or any kind of mutual fund you are invested in AI. It permeates the stock market. It's everywhere.

[Blues Heron]

16. No wonder your into it. Divest now while you can, before the bubble bursts

[yardwork]

17. Ok, that made me laugh.

Thanks for a much needed chuckle.

[Igel]

39. And do what? Keep it in cash, losing value through inflation?

Even high-interest savings accounts wind up invested in risky things, because they may only fund loans but the value of those loans and collateral depend on the overall market.

The only real reason to hold a lot of cash is (a) short-term because you think that the market's too unpredictable and turbulent and you're just waiting to see what happens in the next few months; (b) because you suspect deflation is around the corner, where your cash gains value as a result.

Even the 6-year annuity I put have 1/5 of my retirement in (I think it's about to start year 4) could run into trouble if it's paying a guaranteed 4.9% while the company behind it is hemorrhaging cash. And my teacher's pension is the same kind of critter--it's probably underfunded (but not nearly to the extent that some other state's teacher unions are).

Heard a nifty report yesterday--don't have 100% confidence in the source, which has a distinct partisan bias and therefore probably weighs what they think as valid based at least in part on their and the source's partisanship--that the current US financial data showing slow growth would show no or even slight negative growth if you subtracted AI, it's having just that big an effect on the overall economy.

[Bernardo de La Paz]

42. As to the report, I've heard versions several times on CNBC and I think it is the truth

Not sure about the quantity, but maybe it is about 1.5 % of GDP, where overall growth might be 1.5% to 3.8% depending on the analyst.

It makes sense because there is massive construction of data centres which means a lot of copper smelting, ditch digging, cooling systems, gas turbines for power plants, rack manufacturing, rack unit circuit assembly, etc. Salespeople are selling AI, corporate types are bringing staff up to speed, etc.

The Magnificent 10 (7 + 3) companies hold 40% of the stock market's value. NVidia is worth more than the Russell 2000 midcap stocks all taken together.

Your points about investing are good.

[yardwork]

44. I've seen those same reports about AI buoying the U.S. economy.

And that it's temporary buoy that is covering up the worst impacts of Trump's crazy actions.

The bottom line is that we don't have a lot of choice in how/whether to invest. We're literally along for the ride, especially now that inflation is back. I remember the 70s. And the high interest rates that followed.

My pension is one of those underfunded ones.

[Cheezoholic]

26. And that's a problem. Many have no choice how their retirement is invested. AI company bubble bursts and bam

The economy gets slammed along with retirement accounts. If you were retiring when it happens your screwed. I commented before on the tech bubble in the 90's and how devastating it was to a lot of peoples retirements. The greed of investors who get peoples retirement funds to play with and skim off the top is fucking problem in my eyes. And the fact that an actual AI bubble could crash the markets and drag an already sluggish economy into a recession is bullshit because you know who walks away away smelling rosie? Those money market managers and hedge fund managers who invest and supposedly divest peoples retirement accounts. Dont say no, it happens every time. The regular people get fucked while those Wall Street fat cats slide away with their pockets stuffed. Its all a fucking scam when a single sector of "business" that employs so few people but is also making very few people uber billionaires can wreck EVERYBODY'S lives for half a decade or more if a so called bubble bursts. Its pure greed and theft. Just another way to funnel cash upwards of the many ways the average citizen gets mugged financially every day. This system needs fixed, it's broken. At least for the people.

And the people who get hurt the most are the poor, the elderly and those who planned retirement when this shit happens. I cant stand the it always comes back excuse. What about the suffering and misery going on "waiting" for it to come back? Wall Street Fat Fucks aren't suffering, I guarantee that.

[yardwork]

46. Agreed. Human greed is a problem.

There's a reason they were named the seven deadly sins. They're deadly to us all as a society.

[Bernardo de La Paz]

15. You can't attack the message, so you attack the messenger by alleging corruption (self-interest)

It wouldn't matter whether I was in AI stocks or not. But FYI, I am completely out of stocks since January. The market is too risky.

Further, I am considering shorting some AI and AI-adjacent stocks or running bear option strategies.

We are about to enter another AI Winter, but it is will be relatively brief (say three to five years) and relatively shallow (because the sector is so advanced). When I say it is advanced, you ain't seen nothin' yet. Currently the sector is having some success with Large Language Models but they require huge data centres and massive power supplies. That will be reduced and the capabilities will increase. AI of 2035 will be as different from now as smart phones of 2009 were different from flip phones of 1999.

There were two major AI "winters" approximately 1974–1980 and 1987–2000,[3] and several smaller episodes, including the following:

1966: failure of machine translation
1969: criticism of perceptrons (early, single-layer artificial neural networks)
1971–75: DARPA's frustration with the Speech Understanding Research program at Carnegie Mellon University
1973: large decrease in AI research in the United Kingdom in response to the Lighthill report
1973–74: DARPA's cutbacks to academic AI research in general
1987: collapse of the LISP machine market
1988: cancellation of new spending on AI by the Strategic Computing Initiative
1990s: many expert systems were abandoned
1990s: end of the Fifth Generation computer project's original goals

[MrsCheaplaugh]

25. My little quibble:

[they require huge data centres and massive power supplies]


Humans (and life on earth) require a livable planet. After this much-ballyhooed Artificial Stupidity sucks up all the resources, will we have one?

[delisen]

28. Interesting Observation.

AI entities do not need certain features of a human-habitable environment.uh oh.

[ratchiweenie]

32. It's my quibble too and it's not a little one. They are building these massive data centers everywhere and

consuming tons of electricity. Destroying the environment for money for nothin and increasing people's power rates all across the country.

[Bernardo de La Paz]

38. This massive use of power is a temporary phase. Ten / 20 years from now it won't use so much.

A human brain uses about 50 watts of power. A data centre: gigawatts.

Early steam engines used massive amounts of coal and made two or three horsepower. But that was enough to get the industrial revolution going. Now a tank of gas will put out hundreds of horsepower for an hour.

[Deminpenn]

45. There is push back on these big data centers

planned to built in certain communities. There's a current story in the local western PA news media of a local community that's very skeptical of the plans to build one near them.

One example: https://www.post-gazette.com/news/politics-state/2025/04/23/pennsylvania-puc-data-centers-ai-shapiro/stories/202504230064

[moniss]

37. But at the heart of the matter is that with all of the bells and whistles

we have today on cars, in homes etc. we are a society where an ever larger proportion of the population cannot afford food and shelter for example. We are run and controlled by people who know the price of everything and the value of nothing. It is not sustainable. All of this tech is going around in a capitalist frenzy and not, as people point out, as a thing of the commons.

I am not saying we shouldn't do research and development. That development in medical care is valuable but keeping in mind that application and availability is at the mercy of capitalism and/or political favor. But what I am talking about is that for the general population to have all of the gizmos we have a strong objective case can be made that we are worse as people because of most of it.

It is the folly of human beings to look at a highly tech oriented and involved culture and think it is "ahead" of a culture in the Amazon for example. It is in fact ignorant arrogance. One is a frenzied, always needing more, stressed, judgemental society pushing itself and it's members to constantly consume and want more and more while the other is a culture that sustains itself without all of the tech gizmos and by any measure of happiness and satisfaction with life the simpler culture wins. Until the other culture comes along and disrupts them, takes from them, kills them off etc. But that takes us into a digression.

Simply put I make the case that we are worse off as human beings by flooding ourselves with tech. Our society may find itself awash in medical advancements but it is more obese, more stressed and less healthy overall than 40 years ago. We are less connected to family and we have deemed "social interaction" to be reading or sending an e-mail or text message. We have waiting rooms full of strangers who immerse themselves in their phones and ignore social interaction with the person next to them. In fact they do so many times to specifically avoid the possibility of an actual face to face interaction.

[Bernardo de La Paz]

40. Fine points, but I was refuting the simplistic idea that "garbage in garbage out" means that AI is useless. . . nt

[moniss]

47. Understood and I agree that AI is not useless but

the push for unfettered application isn't a good thing. We find ourselves in 2025 at a point where we cannot as a society find a way to get along but we can unleash the tech gurus to flood us with ever increasing amounts of tech. Our problems and answers are in our mirrors.

[Bengus81]

9. You big tech guys going to ask Trump for a refund of the millions of $$ you foisted on him?

FAFO is coming to you too!

[barbtries]

23. it should be.

AI is not the answer to the world's ills.

[infullview]

24. Good.

AI is such a scam and is doing nothing positive for our youth to help them learn. Just one more crutch. Half the people driving today couldn’t get from point A to B without a flashlight (GPS) to tell them which way to turn. Not to mention people who are too lazy to drive their own car and rely on self driving mode.

[delisen]

30. Quibble:

A lot of driver assist aids are allowing older and disabled individuals to still live typical lives. I hope you do not see us as lazy.

[infullview]

49. Lazy doesn't include you.

Lazy are the people who buy a Tesla and fall asleep at the wheel or take their eyes off the road and let the car take control because they can.

[Oneironaut]

71. I hope, after the crash, AI focuses more on stuff like this.

Right now, we're using AI in the most inefficient way possible. AI videos, AI music, and AI art don't help our society. AI used to help people with disabilities would be a good thing.

[hunter]

27. Please. Let it be a hard, hard crash.

There's already too much gibberish in the world, most of it spewed by humans.

[Pachamama]

31. It will be hard

Even a 5000 point drop in the Dow coming soon will be “Gentle”.

I am fully expecting it to be ugly.

[bucolic_frolic]

29. Email was going to be free forever too.

The biggest and most diversified companies will survive. META, MSFT, and those that benefit from AI. But pure plays not so certain. It's all about the revenue stream.

[Clouds Passing]

33. The economic terrorists are working to destroy the economy of California. .

[Bernardo de La Paz]

52. Nonsense. . . . nt

[Clouds Passing]

54. Just wait and see

[Bernardo de La Paz]

59. I'll wait and see about things that are explained and not simply eleven-word blurts.

A much better investment of my time. The more extreme the proposition, the more explanation is required. Yours is extreme and I see no evidence for it.

The economic terrorists are working to destroy the economy of California.

[Clouds Passing]

74. Call it following the path of past behavior. Educated guess. Doesn't take a genius to see where it's going.

Antagonizing others is not a good look, just stop.

[Bernardo de La Paz]

76. That is not the past behaviour. I'm not a genius and you are educated, so explain it. I don't see where it is going.

I see multiple paths but I don't have your certainty about what path will be taken. Some are filled with incompetency and idiocy, but NONE of them are based on any belief that the WH self-styled economic genius or the California oligarchs are working to destroy the California economy terroristically or otherwise. That includes the numerous oligarchs behind or adjacent to tRump. tRump doesn't like California and his oligarchs don't like California politics, but both know that "destroying" the state's economy would destroy the US economy, which doesn't help any oligarch and is the last thing tRump wants as his legacy. So your thesis fails though you might resuscitate it if you explain it.

There is much too much eleven word hand-wringing and dooming on DU and the doomers expect everyone to just knuckle under and accept their say-so. Dooming others is not a good look, just stop.

[Clouds Passing]

80. That is the reichwing trajectory, to take over the 4th largest economy in the world.

It doesn’t mean that trajectory can’t be changed. It just means that’s the course it’s on now. So doom and gloom can be upended if we can change the prevailing wind.

That is their point to destroy the US economy for the people while stealing everything for the small cadre of billionaires. Their goal is to take from the government all existing programs and privatize every function of society. It’s in P25. CA is an integral part of that plan.

To not see what is haplening before our eyes is foolish.

Go pick on somebody else.

[Bernardo de La Paz]

81. I agree, the oligarchs want to tighten their strangle hold on wealth & income, but not that way

They want to privatize as much as they can, but destroying either economy is simply not the plan and not in Project 2025.

Their actions may have the effect of destroying, but that is not their intention.

Clearly understanding intentions and not attributing intentions erroneously is important for understanding the opponents and their actions. Accusing them of dramatic but non-existent plans might be warm fuzzy internal propaganda but it is not effective at advancing forward.

[kimbutgar]

35. Everytime I hear of AI I think of Hal in 2001 space odyssey

And how it turned against the crew and took over. Scarily as AI gets more powerful it could cause a lot of damage to our country.

[GreenWave]

41. And if AI suffers its demise...

Sympathy?

Not a chance

[Deminpenn]

48. AI is certainly over-hyped

For looking up information, it's just a glorified search engine.

For programmers and coders, it's very likely made a commodity of their once unique skill set.

AI cannot anticipate the future since it's based entirely on the past; past is prologue which it often isn't.

What AI will turn out to be is a useful tool to supplement, not replace, human experience and knowledge. A few weeks ago, The New Yorker had a fascinating story of how AI interacted with doctors diagnosing patients. Well worth the read.
https://www.newyorker.com/magazine/2025/09/29/if-ai-can-diagnose-patients-what-are-doctors-for

[Bernardo de La Paz]

58. Very interesting article. Agreed: well worth the read. Thanks! . . . . nt

[WSHazel]

53. Venture bubbles are usually isolated

To the venture and technology industries when they burst. It may bleed a little into the broader economy, but it will be mild. The rest of tech is pretty healthy, even as AI spirals into insanity.

That said, the venture capital industry will take massive losses when this bubble bursts.

[SamuelTheThird]

56. The dot.com bubble caused a mild recession

This is looking to be significantly worse, and will occur in a time of major instability anyway

[Bernardo de La Paz]

60. This may be worse not bc of bubble bigger, but bc of Trumponomics in the background being propped up

This time, there is a stock market bubble on top of massive national debt explosion on top of economic disruptions (labour supply and tariff taxes and uncertainty). The background economic sickness caused by the genius of the stable is bigger than either bubble (this AI or 2000 dot.com).

[C_U_L8R]

55. This generation of AI is pretty limited.

Maybe they can figure out something more useful and valuable to do.
Like curing cancer. Or getting rid of spam and phishing.
Enough of this generative nonsense.

[Diraven]

57. Also the data center issue

I just read another story about the scramble to build and operate data centers for the big AI companies. It's projected to cost close to $500 billion per year just to keep them all running. Meanwhile the entire AI industry is generating only $20 billion per year in actual profit. And there is no foreseeable path to make them 25 times more profitable than they are today. So very shortly these companies are going to run out of enough investment capital to make payments on the massive loans taken to build these data center monstrosities and the whole industry will implode.

[Bernardo de La Paz]

61. We are approaching that point. There is circular financing now

NVidia has taken a stake in a company that is going to use the money to buy NVidia chips.

[flashman13]

62. AI - A whole lot more canned hot air for sale. I suggest you read J.K. Galbraith's The Great Crash.

It is a quick read in clear language.

Everything old is new again.

[hunter]

75. I attended a Galbraith lecture in the later 'seventies and a discussion afterwards.

I recall the the future Ronald Reagan voters created a bit of a ruckus. Maybe I'll dig up my notes one day when I'm feeling brave. ( My personal life then was an ever-evolving catastrophe... I don't like to reflect on it too much. )

Chinese economists paid close attention to Galbraith and other Keynesian style economists, not the clowns of the "Reagan Revolution," which is one of the reasons China is a superpower today.

Much like AI, economic theory is prone to bizarre feedback loops that make it prone to hallucinations.

[flashman13]

77. Me too! Early 70s. He had the most wonderful and distinctive speaking style.

[flashman13]

79. And an incredible dry wit that would cut through the most inflated ego.

[Glorious bastard]

64. Not as bad as the global bitcoin bubble which is sure to eclipse the AI bubble

[flashman13]

65. I suspect they will both explode more or less simultaneously. One will trigger the other.

What could go wrong?

[Glorious bastard]

66. That's a very likely possibility.

Like an atomic bomb: A relatively small charge bringing all the elements together to trigger a nuclear explosion.

[mdbl]

67. So our stock market is just unbridled bubbleism?

[flashman13]

72. Correct!

[littlemissmartypants]

68. I can't wait. It's going to be spectacular. ❤️

[LudwigPastorius]

73. The bubble isn't going to burst (if it does) any time soon because...

AI research is now, rightfully, seen as a national security issue.

China isn't about to step down its research, so the U.S. has to keep up. It's an AI arms race at this point. If private venture capital funds start to run dry, the government will take up the slack.

[Bernardo de La Paz]

82. It will be less of a national security issue if AI "research" (corporate exploitation) hits a wall of reality.

AI scientists and engineers will of course dust themselves off and pick up again.

I say "if" because, although there will be fits and starts, there may be points where fundamental rethinking and realignment become necessary for advancement. That is a characteristic of the several prior AI winters but we don't know where they are until we have been in them for a bit.

I say "a wall" because it will feel like a wall to the bubble pumpers and stooges at some point. I think we might be at a point where returns (increased productivity) are drying up or will require extensive corporate retooling to obtain. Some companies are seeing few if any gains from deployment, partly because, for example in customer relations, AI agents require some human customer care to fix up its mistakes. Another: in programming, a significant amount of time is spent fixing up bad generated code and gains are seen mostly in "greenfield" projects or stages.

We might be getting on to a plateau for a few years while current gains are consolidated and some of the exuberance evaporates. That is not normally a "problem", but for stock market bubbles it is definitely a problem.

Even though AI is a national security issue, a nationwide mad scramble to build data centers may not be the best way to deal with it. Much better would be R & D on AI that doesn't need such big bombing targets, to mention just one aspect.

[discntnt_irny_srcsm]

78. Don't want it, don't need it, would rather avoid it.

Dave Barry's worry about his bathroom scale telling his fridge not to let him in is here.

[raccoon]

83. We've had a bubble and burst economy for some time.