We heard about the debt derivative crash coming from 2006. If you said it was coming people laughed at you and called you stupid, mostly Harvard grads.
Sure, some people heard about it in 2006. Not many, and even the people sounding alarms were called cranks up until the day after Lehman collapsed. However, right now a lot of social media is full of people basing the bubble’s “any second now!” metrics on emotional AI-hate arguments, not real data points. I also thought we had crossed the line at some point, and that was 6+ months ago. Since then the Big 4 have been getting large contracts, which isn’t exactly a sign of a hollow middle.
I’m sure we’ll see in a couple years who was right, but I only see this as a fractional bubble where pieces fail individually, not the whole system as one.
When there’s a bubble, at first you hear “hmm this is weird maybe it’s a bubble”. Then more people start saying ,”yeah it looks like a bubble”. Then more people start analyzing how it IS a bubble. All the while big investors are like, “ I know it’s a bubble but right now I’m making bank, so…”. Finally, after those investors decide it’s been a good run, they cash out and the bubble truly starts bursting.
So right now everyone knows it’s a bubble. What we’re seeing is the big investors trying to squeeze every last billion out of it.
Finally, after those investors decide it’s been a good run, they cash out and the bubble truly starts bursting.
This time they wasted so much money that they’re trying to foist the bad investments on retail investors with overblown valuations and IPOs before cashing out.
You seem to be talking about SpaceX, but I gotta point out that with the fast-track it’s not just the retail investors holding the bag. It’s anyone with a retirement fund.
it’s not just the retail investors holding the bag. It’s anyone with a retirement fund.
I was thinking retail investors — whether individually or through an index fund — covered both. If you have any control over your retirement funds though, you can use that control to get out of the stock market if you want. So it isn’t anyone with a retirement fund, just nearly anyone with a retirement fund.
He didn’t make it into the s&p 500. NASDAQ bent over and opened wide though.
Yeah, heard it all before, and I’m very familiar with the structural “curiosities” of the existing investment landscape.
Very few people correctly called the problems with 2007-2008. Not none, but few. And with soooooo many people mindlessly on the “it’s a bubble!” bandwagon so early, a lot of accuracy and legitimacy is lost months or years beforehand for no other reason than why conspiracy theory people say “we’ll get UFO disclosure this year!” Or “This year the Cubs/Arsenal/Red Sox will do it!” It’s just the thing they say until one time they’re right.
I’m not telling you it won’t happen in a sense… But it’s not going to happen how or when you think. IMO, you’re looking at a partial stuttering effect maaaaaybe late winter like Q1 2027, and that’s about it. There’s to much alternate demand for everything LLM companies are already buying up to create a full and similar bubble like the Dot Com bubble.
You’re only cherry-picking some panic-mongering bias-confirming reporting here. Honestly - Yahoo? NBC? CNN? Why not Grandma’s Facebook shares and the Babylon Bee?
Plus, did you even read the Forbes article? The opening paragraph is literally what I’m trying to tell you.
For example, one huge thing you’re missing this is that the large companies of the Big 4 with frontier models aren’t taking out loans for this. It’s all the startups that are trying to draft on them that are using loans. THAT is a danger, that tens of thousands of idiots will sink a corner of the financial system from the sheer weight of defaulting loans because ChatGPT said their shit sandwich idea was “revelatory, and honestly, a great idea!”
But that’s not going to tank OpenAI or Google. Google has cash money. OpenAI as a fair bit of cash money. Meta has cash money. Anthropic had cash and then Trump tried to sink them… but they might be OK in the long run. They’re doing great on the code side of things.
What you’re also erroneously assuming points to a bubble points to how OpenAI, Google, Whatever Musk calls his stupid company this week, and Palantir all are doing to avoid classic bubble economics of huge loans to pay back. You don’t pay back stocks. It’s equity. That’s cash trading hands, not loans that come due one day. Hell, Antropic is buying server time from Grok - that’s real cash trading hands to perform a service. That’s not a bubble, that’s the kind of thing that prevents a bubble. Like, bro, do you even bubble?
I don’t claim I know when the correction will happen but I wonder what massive alternative demand you see for the mountains of highly specialised server gpus in storage that will be obsolete in maybe 3 years time? For many of them that means likely before they will ever be turned on. The dotcom bubble created infrastructure that was, largely, not obsolete when the bubble bursted and made a lot of sense to salvage. That is a fundamental difference to inference infrastructure.
The WorldCom fiber layouts were akin to the railroad bubble in the 1840s, in that those were pathways with nothing to use them. I can see the parallels here, but the difference is GPUs aren’t nailed to the ground. They can be moved to demand, unlike railway lines and fiber lines.
GPUs process data. They don’t spoil or expire. Sure, they’ll lose value, but it’s not like they stop being useful, even if highly specialized. Hell, even selling them second hand to China with an export waiver would be a way to recoup value. So already, the premise is flawed in that, specialized or not, China will use them. Or the EU or universities looking for a deal and building out their own local processing.
Both rail and communication infrastructure lead to some useless connections but much of it was no useless, in both cases. GPUs are not bolted to the ground but they do become obsolete no matter if you deny it or not. The issue is that the real costs is in using GPUs is very different from these previous bubbles. Those obsolete GPUs will cause much higher operating costs than newer generations, to the point where they won’t be interesting to use even if you gave them away for free. To make matters worse, other infrastructure is much more flexible in its use, one can transport all sorts of things on railways, one can send all sorts of data on communication infrastructure. Those specialised GPUs aren’t very useful for anything other than a fairly narrow use case.
I think you do not fully appreciate the crazy amounts of GPUs we are talking about here. China has no massive real shortage of GPUs. They managed to get black market GPUs more or less directly from Nvidia just fine. Nor are European universities IT wastelands without compute capabilities. But even if they’d go crazy on expandig compute infrastructure with outdated power hungry GPUs, that would be barely more than a drop in the ocean. Nvidia does have to resort to circular financing to keep the boom cycle accelerating, with GPUs going just to some storage facility if they exist at all. That is not how healthy demand looks like.
If you are talking about GPUs being only a small share of the overall total sum, bad news that the supporting infrastructure is also to a large extend tailor made for that very narrow use case. No one else will need such huge data center facilities designed specifically for GPUs, that includes also the non GPU components. And the infrastructure is the only thing of substance of this bubble. The models aren’t it. Open weight models are on the heels of the closed models. As soon as they are good enough for common applications, the business case for charging billions is slowly evaporating.
You are also mistaken, I am not worried about GPUs. I am merely stating that they and their server infrastructure (which is tailor made for them) are rapidly getting obsolete equipment by their nature and while the clock is ticking they are largely not even being used. This is fundamentally different from the dotcom and railway bubble.
Nah, like a 5th of the market was tied up in dot com. Hundreds of start-ups that were all supposed to take over their sector. AI is not sustainable, but it’s nothing like that.
The problem is, we kinda just fell into the dotcom bust. The internet hit, most loved the internet, It made a lot of money and didn’t put people out of work directly. It burst when the investors decided they wanted to cash out and everyone jumped out at the same time.
The AI bubble is being tended to. They know how it works, infusing money here and there, they can keep it going for a long time. AS the mega rich are invested in it and they’re siphoning all the cash out of the middle and upper middle class, all they have to do it keep the engine running and suck it all dry.
You see them right now carefully stepping into IPO. Courting the right billionaires and trillionaire. There’s already clear indicators that these big entities need to be 10x larger to actually earn their valuations, nobody cares. Corrupt bottom to the top.
This one may not actually pop in decades if they can manage it
You’re talking about from buildup to crash, though. As if everyone just looking at literally any large investment and saying “it’s a bubble!” is dong anything other than being a broken clock right twice a day.
I follow conspiracy theories extensively, and people have always predicted a huge, massive economic collapse next year - every year. On Art Bell, it was a constant, reiterated prediction every year from 1994 until 2013. It’s only the ones that happened to say it in 2006 or 2007 that rode the credit of “actually predicting the 2008 crisis!” Even the ones saying it before the Dot Com bubble didn’t get it right because their doomerism made all predictions “end of the world” level.
As if everyone just looking at literally any large investment and saying “it’s a bubble!” is doing anything other than being a broken clock right twice a day.
Suggesting that something isn’t true simply because a lot of people are saying it’s true (with or without evidence, doesn’t really matter). “I keep reading about this being a bubble, so that means it can’t be true”
It’s like the inverse (converse? I forget. It’s been years since I took a logic course) of an appeal to the masses.
You’re not getting the full picture of the reasoning, or intentionally ignoring parts, I dunno.
Large groups of people are historically bad at predicting financial markets. Very few people ever correctly predict a bubble ending, and considering that a large group of people are traumatized by 2008 and can read Wikipedia well enough to see the Dot Com bubble, they’ve erroneously put 2 and 2 together and think all large investments in tech will equate to a bubble. Regardless of the structure underlying it.
Structural differences between Dot Com bubble and AI investments are numerous and extensive. Structurally, they’re similar anecdotally at best. Yes, there are problematic parts. Data center demand will never be met by anything other than a few janky fly-by-night centers and ramshackle kludge-hosts in Serbia or Brazil where they’re not regulated like the US or EU.
The circular investment issue isn’t just actual cash trading hands, it’s assets and stock as well. In previous bubbles the majority of the bad investments were over-leveraged financing. Loans. There’s actually very little in terms of loans going into these companies, which is a notable difference between this and literally every other bubble in history.
I think the bubble will be 2 or 3 smaller bubbles that falter, but the mass of the overall industry will fail to full tip over because there’s enough parts that can be scrapped and reapplied to other issues anyway, that demand won’t ever evaporate as it did for $2 million URLs in the Dot Com bubble, or railway lines to nowhere in the 1840’s.
This does not ignore or assume no problems from layoffs and job displacement. That’s a very real and huge threat, and AI will only enhance this problem by trying to claim it can manipulate and bilk poor people better than Google can.
I haven’t heard this much bubble talk ever. It’s not the same prediction made by the same people again this time. I don’t even know anybody irl who likes vibecoding (myself included) who thinks this is sustainable.
Even the ones saying it before the Dot Com bubble didn’t get it right because their doomerism made all predictions “end of the world” level.
I don’t know what you’re trying to say. People had bad takes about that bubble so all bubble scepticism is discredited? But it popped, which means all these investors had bad takes as well. So…
Nobody worth listening to thinks this bubble is going to be worse than the dotcom bubble. It’s simply not that big to begin with. I guess there’s some wishful thinking too, but what’s the alternative to this investors-expected AI growth? Everything except the AI market crashes?
Exactly. And you know who’s bad at predicting things? Large groups of people.
It’s a fractional bubble at best. Unlike the Dot Com bubble, which invested in things like URLs that no one wanted and WorldCom’s fiber layout, the buildouts and investments being done on spec aren’t of the kind that are single-use. Data centers are always in demand, anyway. Storage and cloud compute are always in demand. Electricity is in demand. If AI flops tomorrow, other than 3 over-valued companies employing…a few hundred people, and idiot investors in those companies, the entire economy isn’t yet entirely dependent on LLMs exactly because they suck at most of what they do anyway. Government contracts are stabilizing the whole industry anyway, something absent from the Dot Com era.
Edit: You know who IS a risk? All the dipshit startups that think putting a wrapper on a CustomGPT was a good business model, and took out loans for that rather than split equity. That’s going to be your first indicator to look for, and it’s wavering because, as it turns out, 99.999999% of those ideas are stupid.
History is the best teacher, and a detailed look shows these are only alike in that they are tech-related.
Yeah, been hearing this for a year.
Starting to worry it’s all… doomerism hype?
Nah.
We heard about the debt derivative crash coming from 2006. If you said it was coming people laughed at you and called you stupid, mostly Harvard grads.
Sure, some people heard about it in 2006. Not many, and even the people sounding alarms were called cranks up until the day after Lehman collapsed. However, right now a lot of social media is full of people basing the bubble’s “any second now!” metrics on emotional AI-hate arguments, not real data points. I also thought we had crossed the line at some point, and that was 6+ months ago. Since then the Big 4 have been getting large contracts, which isn’t exactly a sign of a hollow middle.
I’m sure we’ll see in a couple years who was right, but I only see this as a fractional bubble where pieces fail individually, not the whole system as one.
What nonsensical logic.
“I’ve been hearing this for a while so that must mean it’s not true”
Ah yes, the absurdity of consistently inaccurate speculation being consistently inaccurate speculation.
Chicken Little vs. The Boy Who Cried Wolf.
Where’s the flaw in the logic, again?
When there’s a bubble, at first you hear “hmm this is weird maybe it’s a bubble”. Then more people start saying ,”yeah it looks like a bubble”. Then more people start analyzing how it IS a bubble. All the while big investors are like, “ I know it’s a bubble but right now I’m making bank, so…”. Finally, after those investors decide it’s been a good run, they cash out and the bubble truly starts bursting.
So right now everyone knows it’s a bubble. What we’re seeing is the big investors trying to squeeze every last billion out of it.
This time they wasted so much money that they’re trying to foist the bad investments on retail investors with overblown valuations and IPOs before cashing out.
You seem to be talking about SpaceX, but I gotta point out that with the fast-track it’s not just the retail investors holding the bag. It’s anyone with a retirement fund.
I was thinking retail investors — whether individually or through an index fund — covered both. If you have any control over your retirement funds though, you can use that control to get out of the stock market if you want. So it isn’t anyone with a retirement fund, just nearly anyone with a retirement fund.
He didn’t make it into the s&p 500. NASDAQ bent over and opened wide though.
Yes.
Yeah, heard it all before, and I’m very familiar with the structural “curiosities” of the existing investment landscape.
Very few people correctly called the problems with 2007-2008. Not none, but few. And with soooooo many people mindlessly on the “it’s a bubble!” bandwagon so early, a lot of accuracy and legitimacy is lost months or years beforehand for no other reason than why conspiracy theory people say “we’ll get UFO disclosure this year!” Or “This year the Cubs/Arsenal/Red Sox will do it!” It’s just the thing they say until one time they’re right.
I’m not telling you it won’t happen in a sense… But it’s not going to happen how or when you think. IMO, you’re looking at a partial stuttering effect maaaaaybe late winter like Q1 2027, and that’s about it. There’s to much alternate demand for everything LLM companies are already buying up to create a full and similar bubble like the Dot Com bubble.
I mean yeah sure, if you choose to ignore all of the evidence.
https://finance.yahoo.com/news/very-troubling-ais-self-investment-spree-sets-off-bubble-alarms-on-wall-street-160524518.html
https://www.nbcnews.com/business/economy/openai-nvidia-amd-deals-risks-rcna234806
https://www.cnn.com/2025/10/07/business/openai-nvidia-bubble-nightcap
https://www.forbes.com/sites/greatspeculations/2025/11/28/how-the-10-trillion-ai-bubble-pops/
Specifically, the circular nature of the investment and funding is hard to brush off and ignore.
You’re only cherry-picking some panic-mongering bias-confirming reporting here. Honestly - Yahoo? NBC? CNN? Why not Grandma’s Facebook shares and the Babylon Bee?
Plus, did you even read the Forbes article? The opening paragraph is literally what I’m trying to tell you.
For example, one huge thing you’re missing this is that the large companies of the Big 4 with frontier models aren’t taking out loans for this. It’s all the startups that are trying to draft on them that are using loans. THAT is a danger, that tens of thousands of idiots will sink a corner of the financial system from the sheer weight of defaulting loans because ChatGPT said their shit sandwich idea was “revelatory, and honestly, a great idea!”
But that’s not going to tank OpenAI or Google. Google has cash money. OpenAI as a fair bit of cash money. Meta has cash money. Anthropic had cash and then Trump tried to sink them… but they might be OK in the long run. They’re doing great on the code side of things.
What you’re also erroneously assuming points to a bubble points to how OpenAI, Google, Whatever Musk calls his stupid company this week, and Palantir all are doing to avoid classic bubble economics of huge loans to pay back. You don’t pay back stocks. It’s equity. That’s cash trading hands, not loans that come due one day. Hell, Antropic is buying server time from Grok - that’s real cash trading hands to perform a service. That’s not a bubble, that’s the kind of thing that prevents a bubble. Like, bro, do you even bubble?
I don’t claim I know when the correction will happen but I wonder what massive alternative demand you see for the mountains of highly specialised server gpus in storage that will be obsolete in maybe 3 years time? For many of them that means likely before they will ever be turned on. The dotcom bubble created infrastructure that was, largely, not obsolete when the bubble bursted and made a lot of sense to salvage. That is a fundamental difference to inference infrastructure.
The WorldCom fiber layouts were akin to the railroad bubble in the 1840s, in that those were pathways with nothing to use them. I can see the parallels here, but the difference is GPUs aren’t nailed to the ground. They can be moved to demand, unlike railway lines and fiber lines.
GPUs process data. They don’t spoil or expire. Sure, they’ll lose value, but it’s not like they stop being useful, even if highly specialized. Hell, even selling them second hand to China with an export waiver would be a way to recoup value. So already, the premise is flawed in that, specialized or not, China will use them. Or the EU or universities looking for a deal and building out their own local processing.
Both rail and communication infrastructure lead to some useless connections but much of it was no useless, in both cases. GPUs are not bolted to the ground but they do become obsolete no matter if you deny it or not. The issue is that the real costs is in using GPUs is very different from these previous bubbles. Those obsolete GPUs will cause much higher operating costs than newer generations, to the point where they won’t be interesting to use even if you gave them away for free. To make matters worse, other infrastructure is much more flexible in its use, one can transport all sorts of things on railways, one can send all sorts of data on communication infrastructure. Those specialised GPUs aren’t very useful for anything other than a fairly narrow use case.
I think you do not fully appreciate the crazy amounts of GPUs we are talking about here. China has no massive real shortage of GPUs. They managed to get black market GPUs more or less directly from Nvidia just fine. Nor are European universities IT wastelands without compute capabilities. But even if they’d go crazy on expandig compute infrastructure with outdated power hungry GPUs, that would be barely more than a drop in the ocean. Nvidia does have to resort to circular financing to keep the boom cycle accelerating, with GPUs going just to some storage facility if they exist at all. That is not how healthy demand looks like.
In a $10 Trillion bubble, what percentage, exactly, are the GPUs you’re taking about?
Is it 10%? Are there a Trillion dollars worth of GPUs you’re worried about? Or less?
If you are talking about GPUs being only a small share of the overall total sum, bad news that the supporting infrastructure is also to a large extend tailor made for that very narrow use case. No one else will need such huge data center facilities designed specifically for GPUs, that includes also the non GPU components. And the infrastructure is the only thing of substance of this bubble. The models aren’t it. Open weight models are on the heels of the closed models. As soon as they are good enough for common applications, the business case for charging billions is slowly evaporating.
You are also mistaken, I am not worried about GPUs. I am merely stating that they and their server infrastructure (which is tailor made for them) are rapidly getting obsolete equipment by their nature and while the clock is ticking they are largely not even being used. This is fundamentally different from the dotcom and railway bubble.
Dot-com bubble took about 5 years before it burst, and that was crazier. Why would you think this one would pop quicker?
AI is bigger than dot com and debt derivatives combined.
Nah, like a 5th of the market was tied up in dot com. Hundreds of start-ups that were all supposed to take over their sector. AI is not sustainable, but it’s nothing like that.
The problem is, we kinda just fell into the dotcom bust. The internet hit, most loved the internet, It made a lot of money and didn’t put people out of work directly. It burst when the investors decided they wanted to cash out and everyone jumped out at the same time.
The AI bubble is being tended to. They know how it works, infusing money here and there, they can keep it going for a long time. AS the mega rich are invested in it and they’re siphoning all the cash out of the middle and upper middle class, all they have to do it keep the engine running and suck it all dry.
You see them right now carefully stepping into IPO. Courting the right billionaires and trillionaire. There’s already clear indicators that these big entities need to be 10x larger to actually earn their valuations, nobody cares. Corrupt bottom to the top.
This one may not actually pop in decades if they can manage it
You’re talking about from buildup to crash, though. As if everyone just looking at literally any large investment and saying “it’s a bubble!” is dong anything other than being a broken clock right twice a day.
I follow conspiracy theories extensively, and people have always predicted a huge, massive economic collapse next year - every year. On Art Bell, it was a constant, reiterated prediction every year from 1994 until 2013. It’s only the ones that happened to say it in 2006 or 2007 that rode the credit of “actually predicting the 2008 crisis!” Even the ones saying it before the Dot Com bubble didn’t get it right because their doomerism made all predictions “end of the world” level.
I wonder if there’s a name for this fallacy…
Suggesting that something isn’t true simply because a lot of people are saying it’s true (with or without evidence, doesn’t really matter). “I keep reading about this being a bubble, so that means it can’t be true”
It’s like the inverse (converse? I forget. It’s been years since I took a logic course) of an appeal to the masses.
Regardless, it’s fallacious reasoning.
You’re not getting the full picture of the reasoning, or intentionally ignoring parts, I dunno.
Large groups of people are historically bad at predicting financial markets. Very few people ever correctly predict a bubble ending, and considering that a large group of people are traumatized by 2008 and can read Wikipedia well enough to see the Dot Com bubble, they’ve erroneously put 2 and 2 together and think all large investments in tech will equate to a bubble. Regardless of the structure underlying it.
Structural differences between Dot Com bubble and AI investments are numerous and extensive. Structurally, they’re similar anecdotally at best. Yes, there are problematic parts. Data center demand will never be met by anything other than a few janky fly-by-night centers and ramshackle kludge-hosts in Serbia or Brazil where they’re not regulated like the US or EU.
The circular investment issue isn’t just actual cash trading hands, it’s assets and stock as well. In previous bubbles the majority of the bad investments were over-leveraged financing. Loans. There’s actually very little in terms of loans going into these companies, which is a notable difference between this and literally every other bubble in history.
I think the bubble will be 2 or 3 smaller bubbles that falter, but the mass of the overall industry will fail to full tip over because there’s enough parts that can be scrapped and reapplied to other issues anyway, that demand won’t ever evaporate as it did for $2 million URLs in the Dot Com bubble, or railway lines to nowhere in the 1840’s.
This does not ignore or assume no problems from layoffs and job displacement. That’s a very real and huge threat, and AI will only enhance this problem by trying to claim it can manipulate and bilk poor people better than Google can.
I haven’t heard this much bubble talk ever. It’s not the same prediction made by the same people again this time. I don’t even know anybody irl who likes vibecoding (myself included) who thinks this is sustainable.
I don’t know what you’re trying to say. People had bad takes about that bubble so all bubble scepticism is discredited? But it popped, which means all these investors had bad takes as well. So…
Nobody worth listening to thinks this bubble is going to be worse than the dotcom bubble. It’s simply not that big to begin with. I guess there’s some wishful thinking too, but what’s the alternative to this investors-expected AI growth? Everything except the AI market crashes?
Exactly. And you know who’s bad at predicting things? Large groups of people.
It’s a fractional bubble at best. Unlike the Dot Com bubble, which invested in things like URLs that no one wanted and WorldCom’s fiber layout, the buildouts and investments being done on spec aren’t of the kind that are single-use. Data centers are always in demand, anyway. Storage and cloud compute are always in demand. Electricity is in demand. If AI flops tomorrow, other than 3 over-valued companies employing…a few hundred people, and idiot investors in those companies, the entire economy isn’t yet entirely dependent on LLMs exactly because they suck at most of what they do anyway. Government contracts are stabilizing the whole industry anyway, something absent from the Dot Com era.
Edit: You know who IS a risk? All the dipshit startups that think putting a wrapper on a CustomGPT was a good business model, and took out loans for that rather than split equity. That’s going to be your first indicator to look for, and it’s wavering because, as it turns out, 99.999999% of those ideas are stupid.
History is the best teacher, and a detailed look shows these are only alike in that they are tech-related.
Except people did predict the crash, they could see it coming and they made bank out of it. It made a movie about it.
That movie was about 20 people copying one guy