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- Hacker News
- Pretty much. Given the levels of investment in capital and research if AI companies actually hit what they're aiming at they'd have to collapse the labor market to recoup, bricking the economy in the process. Given the levels of outside investment inflating valuations, if the bubble pops it's 2008 all over again. There's this incredibly narrow window of "just useful enough to extract rents" where everything doesn't go to shit.
- Extract rents? I don’t think you’re using the term rent correctly here.by senordevnyc
- Yes now that everyone’s equity is tied to overvalued assets, it’s a problem because it can have economy wide effects like in the subprime mortgage crisis.by SilverElfin
- We are 81 years away from the end of World War II. The baby boomers born after are the ripest target of financial sharks aiming to get a chunk of their retirements. People will be liquidating to settle estates, to pay inheritance taxes in large numbers. The AI boom feels like a stealthy rug-pull from other assets that are likely to tank from retirement withdrawals and into something that may last a little past the boomer assets wave.by dzink
- How do you prepare for such thing? Do you sell all stocks now? Then what?
- I sold in May. I'm in the largest cash position (t-bills) I've ever had. I might be completely wrong. I just looked at the situation with the oil crisis, and without any obvious way to end it, I just figure, if there was every a more obvious "sell in May and go away" year, this is it.
Maybe I miss out on some gains and buy back in December or January. Maybe I'll increase my Berkshire position. I don't know. But companies tend to push the bad news till the end of the year, and boy, howdy there could be some bad news this year.
by scoofy - Wishful thinking has it that we rally our representatives to let OpenAI and consorts rot. The last thing people should do is bail these delusional people out. Let them have it worse then WeWorks and let’s see if their self crowned AGI can help them out of their misery
- Surely this time we'll learn our lesson and disempower the parasites that create these situations, right? Right guys?
- Yes, and then you'll build a communist paradise. It's just one purge away.by weregiraffe
- It’s a different crowd this time. Instead of bankers and traders with fin instruments its Silicon Valley growth first sane economics later playbook just scaled up to dangerous levelsby Havoc
- Which parasites?by Alex_L_Wood
- Increasingly more prominent is this new genre of activist hacker who thinks all big tech guys are bad parasites and if only they didn’t exist and we would have world peace and prosperity. That’s about the biggest virtue they know to signal.
The took the antithesis of the “great man” theory and ended up believing in a nonsensical version of it - every great thing in the world was done by normal people working 9-5. This is a kind of crude Labour Theory Of Value.
So you see these kind of comments signalling hatred in an attempt to show solidarity. But ultimately it is simply a signalling thing, a way to LARP as an activist because what else might one do as a simple rank and file employee. One wants to have a greater purpose to life and being an activist is a path for it.
by simianwords - Next time it’ll be different thoughby rubyfan
- Not this time. This time, we'll bail out them out because they are too big to fail and they need the money and assets. Next time we'll definitely get them. Pinky promise.
- >"I have a feeling in a few years people are going to be doing what they always do when the economy tanks. They will be blaming immigrants and poor people." -Mark Baum, The Big Short
The scapegoats for this plan never change and have never changed in human history.
by Mistletoe - Always loved this from The Big Short (movie): "In the years that followed, hundreds of bankers and rating agency's executives went to jail. The SEC was completely overhauled, and Congress had no choice but to break up the big banks and regulate the mortgage and derivatives industries.
Just kidding.
Banks took the money the American people gave them, and they used it to pay themselves huge bonuses, and lobby the Congress to kill big reform. And then they blamed immigrants and poor people, and this time even teachers. And when all was said and done, only one single banker went to jail."
Edit: I see I'm not the first to quote The Big Short in reply - such a good movie (and book)!
by red369 - no matter what, success or not the bubble is going to bust, it has inflated so much, the risk of it deflating slowly is a pipe dream. if AI doesn't turn into AGI, global financial crash. if AI turns into AGI and tons of people are out of work, global financial crash too.by segmondy
- > it has inflated so much, the risk of it deflating slowly is a pipe dream. if AI doesn't turn into AGI, global financial crash
Whether overvaluation can deflate gradually or suddently has to do entirely with debt and almost nothing to do with magnitude. AI is, currently, mostly equity financed.
- It's going to be a lot worse if these companies IPO before the crash.
The US gov should dissolve Anthropic and OpenAI tomorrow. Failing that they should block them from going public.
- My guillotine & rope startup is going to make a killing (no pun intended).by infamouscow
- I'm not usually for arguments of "this money could have been better spent elsewhere", but here's a thought experiment. Lets say instead of injecting $2 trillion and counting into a few AI companies, we instead injected $2 trillion dollars into things like infrastructure (real infrastructure, not GPU warehouses), education, helping out communities ravaged by globalization (I doubt most people on Hacker News venture outside of coastal areas, but if you want to make a REAL difference as an entrepreneur why not look at parts of the country that are struggling and figure out how you could make a difference there? You know, instead of trying to just ruin the economy for the sake of the already-obscenely-wealthy). I'm not saying all those ventures would succeed, but I think that amount of money put towards boring-but-real problems would make a much bigger positive impact for everyone.by overgard
- China is showing the world how it's done. Check out how many nuclear reactors they have built in the last 10 years. Turns out having a government that plans long term and actually delivers what they said they would makes a huge difference.by neonstatic
- It won't make much difference. The US has a lot of problem, but "not spending enough money" isn't one.
The US government spend a lot on healthcare ($5.3 in 2024)[0]. More than most European countries per capita. But many people still feel that the US hardly has healthcare at all. Pouring more money without a full structural overhaul will likely make things worse.
And the $2T you mentioned is investors' money, which means that your plan is actually to increase tax by $2T and pour it into a system proven inefficient.
[0]: https://www.healthaffairs.org/doi/10.1377/hlthaff.2025.01683
by raincole - It all sounds great, but unfortunately human nature is that money attracts corruption, so how could a $2T injection be managed in a way that ensures everything is square, without adding significant overhead to the spending?
Governments are often just as bad at this as private entities are.
by anonymousiam - People invest in what would get them the highest ROI. No one is really thinking about “improving the world”* when they invest.
What’s scary about the AI boom is people over investing and not being able to recoup their investment which will lead to knock on effects - companies going bankrupt and people losing jobs, savings gone, … etc.
* As ESG has shown, not everyone agrees on what is considered “improving”.
- For context, the US alone spends annually a bit more than $2T on Social Security, Medicare, and Medicaid. That money is widely dispersed both geographically and socioeconomically. $2T is not as much as one may think. I think we should let investors put their private money where they wish.
Also, as an aside, the benefits of globalization on the balance far outweigh the drawbacks. Globalization has been the primary force pulling 3rd world countries out of poverty over the last 80 years.
- > we instead injected $2 trillion dollars into things like infrastructure (real infrastructure, not GPU warehouses), education, helping out communities ravaged by globalization
Even excluding military spending, US governments spend $2 trillion every 10 weeks.
by rayiner - My understanding of injecting money in education is that it's proven to be extremely ineffective at improving outcomes.
Schools just hire more administrators and build nicer gyms.
- This is 100 manhattan projects. Lots and lots and lots of things that can be done. Reminds me of the quote "water water everywhere not a drop to drink" ==> Money, money everywhere, not a cent goes towards something remotely useful.
1) Could've added nifty features to roads (rf beacons?) and make it super easy to build autonomous vehicles. This would've solved so many problems, but most importantly 45,000 lives every year and millions of accidents.
2) Could've given the money to farmers who are getting ethanol subsidies today to add panels, supply tons of power to the grid, creating permanent income to the farmers instead of handouts every year.
3) Could've built many Universities permanently free which is feasible with an endowment that large.
4) Could've built walking/biking infrastructure in most cities, which would help reduce healthcare expenses. Most of the expenses today are lifestyle/metabolic diseases.
5) Could've switched the entire country to clean energy, exporting ALL of the oil and create a sovereign wealth fund.
6) Could've built a city for homeless people with homes, excess energy production (solar) providing the function of a UBI, a massive hospital with health and mental health facilities, de-addiction centers. New city in the middle of nowhere where land is dirt cheap. Army corps of engineers could execute this.
7) Rehabilitate prison (not like George Carlins suggestion of Kansas: https://www.youtube.com/watch?v=PkMrFIv_QHk), but more like nordic countries.
8) Build solar over all the interstates.
- Is there any comprehensive list of historical warnings from central bankers?