Bluesky

Let me just correct one thing here - market cap is NOT the same as GDP.

I didnt say that it was. I listed both their actual contribution to the GDP and their market cap and the relative value compared to the GDP to point out how massively bloated the market cap is.

When their valuation crashes, it's not going to stop the world economy. They will still keep making chips like they used to. Because we still need chips post bubble yes? Yes.

I also didnt say that the companies would cease to exist or to function post crash. Most, if not all, would continue on without a ton of outward change. That doesn't mean the crash will not have a stupid wide ripple of negatives on any number of industries not directly related to AI.

If a company like Microsoft overextends into AI and sees nothing for it, when the bubble pops, we'll still have Microsoft. They'll still make, sell and support Azure, and Bing, and Windows, and all their other products. But if their bet doesn't pay off, they'll have to rebudget, reorganize and likely end up laying off hundreds or thousands that were expected to be used and paid for from the AI work that is no longer coming. They may reduce orders with or cut ties with Vendors they were expecting to need things from to serve their AI work. They may close offices making businesses that depended on those employees for revenue see sudden drops in customers. Big sudden market shifts WILL have a lot of negative effects and chaos come with them. It is inevitable.

Also, I didnt say that their loss will crash the world economy. I dont think it will. It might not even have that big of an effect on the US economy. I'm actually in favor of letting them take their losses.

But the Trump Administration will not let that happen because they are prioritizing competition with China above everything, with AI being a particularly major area for that competition right now. They'll bail them out to prevent this crash, and to make sure the US remains competitive in the race against China. I think the companies involved know this, and that's why they are taking these IOUs from a non-profitable company with not substantial plans for a revenue stream that will come even close to what they would need to pay off these debts. I think they are all counting on Trump's administration as a guarantor on these debts, and are expecting their money to come from the American tax payer. I say fuck them. Let them take their losses, tank the US economy if it does, and the ones that are responsible can be charged with tax fraud among other crimes, I'm sure. To do otherwise is to guarantee it will happen again and again. But Trump won't do that.