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.
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 evaluations 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.
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.
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 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?
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.
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.
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?
The Boy Who Cried Wolf is literally a cautionary tale about fallacious reasoning.
The people in charge of protecting against wolves should not have ignored the person crying about it just because they had been wrong previously
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 evaluations 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.
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.
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 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?
Except people did predict the crash, they could see it coming and they made bank out of it. They made a movie about it.
That movie was about 20 people copying one guy
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.