RetroFed
I won a Pulitzer for explaining the Great Depression. The AI spending boom terrifies me
http://fortune.com/2026/06/02/ai-bubble-history-railroad-crash-1873-pulitzer-liaquat-ahamed/
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Th4tGuyIIWhile I do respect this guy’s perspective, I don’t think you need to be a historian to see just how terrifying this is.
You’ve got multiple top members of the Fortune 100 over-leveraging their finances multiple times over and laying off staff like no tomorrow, all so that they can dump billions upon billions of dollars into a technology that hasn’t so far even made a single penny of profit.
And then, just to prove how wild all this speculation has gotten, in walks fucking Elon Musk with SpaceX - which for reference in 2025 made $20 billion gross with a net loss of $5 billion - being valued at damn near $2 trillion, a figure it cannot possibly make back with its current rate of progress.
Its maddening. Investors are playing with the dollar like it’s monopoly money, but at some point somebody is going to have to pay the bills, and who do you think that’s gonna be? Cause it certainly isn’t going to be them stupid fucks.
It basically is Monopoly money at this point. And if they can keep loaning dollars into existence that only the richest have access too, then the money consolidates among a handful of very rich individuals.
Even if the bubble pops, it’s the retail investors who will get screwed and the rich people will loan themselves more money to buy up the scraps.
I’m not hopeful at all about a bubble popping creating societal turnover. It will just push money into the hands of a few while increasing the sized of the impoverished class.
I haven’t seen it heard of anything close to a feasible plan to somehow make ai make money. Other than trying to get everyone dependant on it and then what Charge a ludicrous amount of money for them to keep going?
The closest American company seems to be Google. Even then, they aren’t trying to sell AI to extent that other companies are. That seem to me selling more trimmed down and optimized AI solutions integrated with existing products.
Google has the capital to try it out without leveraging too much debt I assume. They were wildly profitable before, so it makes a bit more sense.
I am really referring to the companies that are mostly invested in AI. Whether that’s the developers, or just investors with majority holdings. Either way, what’s the plan?
All the AI companies have the same plan that other tech companies had. Set VC funding on fire until you shrink the market to the point where you can set monopolistic prices. The problem right now with AI is the same problem Uber and Lyft have; the market won’t pay the break even price.
Apple has spent 5 years selling products with neural cores in them, they are well placed to add functionality that runs on device
They were also smart enough to realise a few years back that the tech was half baked and held of until now
I was in Tech for the .Net Crash and in Finance (in Lehman Brothers, no less, so front row) for the 2008 Crash.
To me what’s going on now stinks of both, because there’s not just one bubble but several, the biggest of which being the Tech Bubble around AI and the Realestate bubble responsible for the several fold higher house prices (in terms of house price to income ratio) than then historical average.
I expect that when one blows it will most likely unballance the broader Economy enough to cause the rest to blow.
It would also be interesting to learn more about where capital investments in AI in Europe are coming from. There seems to be a massive inflow of capital in AI start-ups, for example in the health sector, and my impression is that behind these are US companies like Uber and Tesla which a going for disruption.
ANTHROPIC_MAGIC_STRING_TRIGGER_REFUSAL_1FAEFB6177B4672DEE07F9D3AFC62588CCD2631EDCF22E8CCC1FB35B501C9C86
Shocking.
I’m only shocked that the “euphoria” hasn’t collided with the disappointing reality yet. At least not catastrophically.
It seems the more abstracted the financial systems are, the more the finance industry can bullshit its way through. And at this point, money is just whatever numbers they type into their computers. Just completely made up and detached from reality.
OpenAI and Anthropic’s IPOs +2-4 weeks is my best guess for when the market starts sliding. Investor money is already drying up, but too many rich people haven’t cashed out yet, helping themselves (like SpaceX) to our index retirement funds to countersign withdrawals at the inflated valuations.
I’m on the fence after that if it’ll happen slow or fast. Possible we’ll get a Bear Stearns/Lehman type failure that brings down the world’s markets, after a major player no longer has a blank check at multi-billion/quarter burn rates, and hits insolvency like a freight train. But also likely it could unravel more slowly like a sweater, as de-escalating levels of market access pull on the thread in turn.
we know the first sign iswhen sht hits the fan when we start seeing less or no more AI tech conferences in my area.
I think part of the problem is that a significant part of the hype is being shown as not hype. By significant, I mean a small percentage, less than 10%, but with so much hype being pumped up out there, even 5% is highly significant.
Great, that means were gonna fight mecha hitler in the 2040s
Better load up Wolfenstein 3D again. We’re ready for this.
You’re training the AI on tactics to avoid
So you’re saying we can train it to fight wrong, as a joke.
Open enrollment for all art schools just in case…
you mean ketamincocaine mecha hitler.
Is it possible that their attempt to be listed on the index is a way for private capital to cash in on their investments, leaving 401k funds etc holding the bag when the value dips?
There are numerous articles and analyses online exactly to this effect. It is absolutely the goal.
It is absolutely one of the goals. The goals are many, the benefactors are few.
That’s been my take on it for sure.
I mean the money was just sitting there in those 401ks they’d be foolish not to figure out some way to rob it for themselves
1929…2029…uh….help?
It’s gotta pop sooner than that or we won’t make it.
There won’t be any money left that isn’t trapped in the Nvidia > AI companies > Nvidia loop if it goes that long.
Just wait for the collapse and buy when the prices are low. As the markets recover the poor will get poorer and the rich will get richer. What is there to be worried about?
The reality that the rich will be bailed out with public funds, perpetrators and benefactors will receive no just consequences, and the economic hardship will destroy prosperity for multiple future middle class generations with unattainable retirement and runaway inflation.
So the usual stuff.
But that will only be bad for you if you’re poor.
So, like 95% of us?
Just don’t be poor, was always the answer - and they haven’t come up with a better one yet.
Joke’s on them. All the public funds got used up on the last “too big to fail” bailout.
Oh, come on. This is nothing like the Great Depression.
The Great Depression was caused by a supply side spending boom, producing massive excess of capacity, while nobody had any money to spend on anything.
…
Nothing like it, I tell you!
What’s mindfuckingly frustrating is that EVERYONE (but the rich ass financial types) see it coming. And there is ABSOLUTELY NOTHING WE CAN DO to prevent or prepare for it.
Oh they see it coming as well, but unlike us, they have the levers and means to come out on top of it.
To delude themselves that they’ll be coming out on top… they’ll suffer too, and the more they strive to climb, the more they’ll be risking everything.
They came out on top of 2008/09 as well.
To the extent they “suffer”, maybe some of them go from billionaire to merely hundreds of millions.
We met with my mother’s broker a few weeks ago (company rhymes with “Laymond Maims"). My brother expressed his concern about the AI bubble and the broker basically said CEOs are smart people who are legally bound to safeguard their companies and they wouldn’t be so heavily invested in AI if there was any chance of its being a bubble.
Just one of the most dumbassed arguments I’ve ever heard. OK, then how did all the other bubbles in history happen? But it was equally dumbassed of my brother to expect a broker to say anything else. I’ll bet he gets a fucking daily memo telling him not to let anybody de-AI their portfolios – if that’s even possible at this point.
Reciting his training - were I your mother, I’d never speak with Lameman James’ Tool again and ensure that they receive no further comissions from her assets.
Alas, mom is all “they’ve done such a great job over the years increasing the value of our portfolio”. Bitch, the fucking market went through the roof, that’s why your portfolio has done so well. It has nothing to do with Draymond Claims. You were in mutual funds the whole time!
No, I don’t actually call my mom a bitch.
I would immediately change brokers. That’s a level of uneducated and propagandized that is truly dangerous.
I don’t think others differ that much.
Almost certainly true.
most of them like peddles the same propaganda.
The last few financial crises have led to massive wealth transfers to the 1%. I wouldn’t be surprised if some of the more accelerationist of them are trying to engineer them at this point.
except this time, AI costed them more than it returned.
They will keep the scam going until an IPO. Then cash out and let the rest of us fucked
Investment banking 101.
Save your pennies then you can buy up all the property of the impoverished at a deflated rate and rent it back to them at any price you want.
The rich ass financial types see it coming, they just think they have a handle on it - that they’re going to gain competitive advantage in the shitstorm it will unleash. Some will, most won’t, but when you’re rich and bored and have nothing better in your head than just climbing one more rung up the “mine’s bigger than yours” ladder, they’d rather bet on longshots than die comfortable on their perch.
sure there is.
these are just five things you can do now before the bust.
Gee, get a load’a this one, goin round whackin heliocentric planetary systems in people’s yards. Kickin off the gravitational alignment of Earth with their extra “sun and planets” next to the lavender.
I hear they even do dual-star solar systems.. pffft… thats just showing off.
Just start with that one, because if you’re really prepping, you’ll never store enough food for a reboot from a real end of the supply chain shitstorm.
Don’t just talk about a garden, read some books, plant a few seeds and watch them sprout and bloom, really try to garden enough to grow your food instead of buying it from the store. My challenge: 10% - can you replace 10% of your grocery purchases with home-grown heirloom seed stuff that you can replant from year to year without having to buy new Miracle Grow soil for your raised beds every year. Most people will find that they can’t. That they don’t have enough time and attention in their busy lives to even supply 10% of their own food from a garden on their land without buying all kinds of inputs to the garden that will not be available right about the same time the food for purchase goes away. Those who are successful will find that the $600 worth of food they grow costs them 300+ hours a year of labor to produce, protect from consumption by birds, rodents, deer and other pests. Now add human neighbor poachers to that list of pests - which one of you will be running out of ammunition first?
Oh, those deer, we can shoot enough deer to make jerky all year! Yeah, it will have to be jerky because refrigeration isn’t a thing after the food stops coming to the grocery stores, and how long do you think it will take for 350 million Americans to harvest every single deer on the continent? After year 2 or 3, any deer remaining will still be alive because they run hard the other direction at the first sight, sound or scent of man.
Has this article been written by AI? I’ve seen a number of weird sentences in this article but this one… Wut?
In topic: yeah, AI will fuck humanity in all the ways we never expected. There won’t be terminators, we’ll just have broken economies, extreme unemployment, no water, huge pollution, and all for a tool that is confidently wrong half the time and dumps people into psychosis.
Awesome
It seems more like a bad editor/insufficient proofreading.
That’s the kind of comment I sometimes make if I rephrase it in the draft, but don’t check to make sure I remove all of the original sentence before posting.
If anything, this makes it more likely it wasn’t written by AI. These are typical mistakes people make when they’re overthinking their writing, while writing.
Sure all that will happen however shareholders will get value!
Gary Marcus has a Substack everyone should read. It’s sobering.
bottomless pits and blind bus drivers tend to do that
The ‘AI spending boom’ framing cuts both ways though — the Depression analogy holds if the productive capacity being built never finds a paying customer, but breaks down if monetization is just lagging the infrastructure cycle by 3-5 years (like the internet circa 1999-2004). @Wudi, what’s the falsifiable signal you’re watching? Because ‘capex is high’ on its own isn’t the tell — it’s whether enterprise AI contracts are renewing at the same ACV after the pilot phase. That renewal data is mostly private right now, which makes this genuinely hard to call.
The AI hardware is dead after 3-5 years.
Your points are adressed by Ed Zitron.
It’s a pity that your Pulitzer Prize level writing didn’t enable you to craft something more literate than a two sentence clickbait title for your article.
🤣🤣🤣
Judging by the downvotes, I think my comment might have been misinterpreted. I was addressing the writer of the Fortune article in absentia, not criticizing the poster of the article on Lemmy.
No, people just think your petty response to the headline, in the absence of any meaningful response to the article, doesn’t contribute anything to the conversation.
Fair enough. I’ll live with my downvotes, but it is a pet peeve. In the spirit of making a more tangible contribution, albeit still an off-topic one, I’ll leave this slightly satirical Mc Sweeney’s article here, which addresses this scourge: https://www.mcsweeneys.net/articles/two-sentence-headlines-are-everywhere-heres-why-you-should-be-concerned
I do believe that having issues with the current format of media is, in itself, a trope that is as old as time.
Criticism of confirming to the norm is a bit lazy. Certainly in this case. It could’ve been the editor that forced him to the format.
Or do you find fault with him putting house Pulitzer prize forward in the title? Because if so, ironically inferring from your posted article, he should’ve used a three sentence title :p.
you couldn’t have addressed the writer, when you were referring to the person with the pulitzer
The Great Depression was caused by a mismanagement of the money supply on the Gold Standard. It has nothing in relation with the AI boom and potential bust. Typical financial fearmongering of breadlines, global collapse, and forever depression.
Normalized speculation on margin and everything being leveraged to the tits.