Technology

Yes! The problem is that we won't accept the full correction that is actually required. We print money, we buy securities, we find ways to prop to reduce the pain but we end up shifting the weakness to other areas of the economy.

Is it just me, or are the bubbles coming closer together these days?

Yes and no.

Yes in the sense that we have a lot more "fad" economies. There is something new so that needs to be EVERYTHING and the market course corrects, often at the cost of hardship for many.

But "no" in the sense of what "bubbles" tend to refer to. Things like the Japanese Bubble Economy where it causes (I forget if it is officially one but) recessions and even depressions.

The AI Bubble is not going to do that (on its own...). Yeah, a LOT of companies are going to be left holding the bag when they realize LLMs can't solve all problems for them AND manifest a Cyber Stana Katic to give them a blowie while it does that. But what will they be left with?

1. A LOT of "prompt engineers": This is bad because that is going to be a LOT of people who, increasingly, went to school to get a degree in something with very little utility. That said... Art History majors have been showing us how to do that for decades and at least they did something they loved on their way to service industry jobs.
2. For the companies that gutted their workforce over the past few years: A need to rapidly hire talented workers who don't require ChatGPT to do their job: This is REALLY good for the people who have been hurting and should actually lead to a lot of job mobility... for the old hats who predated this fad
3. For the companies that purchased hardware: A lot of edge computing devices are going to be of questionable value. But for the folk who "just" bought a shit ton of GPUs from Daddy Jensen? They have a shit ton of GPUs they can either sell for cheap (not horrible) or repurpose (good)

Don't get me wrong. There is going to be upheaval and it is going to be bad. But it is also important to remember that drawings like the above are actively misleading and bordering on manipulative. Because basically all the biggies, except OpenAI, have non-AI uses. Oracle ballooned massively because of the OpenAI injection but... they are still god damned Oracle. Same with nVidia who, when they aren't powering every LLM on the planet, are also one of the companies that makes all the cards that power stuff like computer vision and the like in cars and what not.

Because... remember the dot com bubble? Remember how basically the entire world still runs on The Internet? It was just a case of rebalancing and pivoting for the most part.

All that said... the US is in a really bad way because the fascists have been increasingly gutting the economy and stopping basically any industry that involves manufacturing or communicating with external countries. We are gonna have a massive stock market crash when OpenAI et al pops...

Yes, you absolutely will be effected.

In a general way, the plebs always do the heavy lifting - a universal truth since the dawn of time.

More specifically, your pension / 401k will lose a heap of money.

As the economy contracts there will be lay offs.

That means loan defaults, et cetera.

I don't know the answer, but during 2008 onwards (seems like the economy didn't fully recover until the end of Obama's presidency), every industry slowed down. Was hard for me to get a fast food job or consistent minimum wage assembly line work through temp agencies. Things can go into vicious positive feedback loops during downturns (investors afraid to invest due to bad economic outlook -> factories and such don't get built or expanded -> unemployment rises -> people spend less -> companies start laying off -> economic outlook worsens -> investors selling and moving to "safer' assets -> ...). The entire banking system pretty much imploded during 2008; I don't know how much exposure banks have to AI (commercial real estate is another thing to worry about though). With any luck the AI crash would be more like the dot-com crash, which mostly just hurt one industry (but I remember my father talking about factory layoffs during that too).

One thing people didn't mention is that I'm pretty sure the top 10% of Americans by income make up 50% of consumption because of the heavily K shaped revovery that has happened. These Americans have a large percentage of their wealth in stocks, and if the stock market crashes, they will feel less wealthy and less willing to spend, decreasing their spending, tanking the US economy.