Technology

The funny thing about people who say it’s not a bubble because AI has value is that the asset category having value doesn’t prevent valuation bubbles from forming.

Houses have value: you can live in them. Yet there was a housing bubble.

The internet has value: you can watch cat videos on it. Yet there was a dot com bubble.

Tulip bulbs have value: you can grow pretty flowers with them. Yet there was a tulip bulb bubble.

In my experience, whenever you start reading news stories asking if something is a bubble and quoting investment bankers say, “no, it’s not a bubble,” well, usually it’s a bubble.

NVIDIA really out here selling shovels in the gold Rush

Hold up everyone. It's not a bubble.

"So it is true that valuations are high but, in our view, generally not at levels that are as high as are typically seen at the height of a financial bubble," said Goldman Sachs strategist Peter Oppenheimer.

He's from GOLDMAN SACHS LOLOLOLO I THINK THEY WOULD RECOGNIZE A BUBBLE LOL ah fuck me our economy is gonna splode

There is definitely a bubble. But also what Nvidia is doing is smart. They have boatloads of cash. They are investing that cash in the companies that are using their products to create money making services. If one of them can create a killer app or viable service this will create demand for their products and they will have an ownership stake in it. Is this guaranteed or even likely? Probably not. We have reached the point where we were in 1996 where the chairman of the fed came out and said we are in a period of "irrational exuberance." That bubble took four more years to pop. This one may end quicker, but it is impossible to tell when it will end or what will come out of it from where we sit today.

Unpopular opinion but this will not as bad as housing bubble and we're way past bubbles actually popping in contemporary economy. Even China corrected for its massive ghost city housing bubble just recently and that was actually worse than ai tech overvaluation.

I see "gold rush" the company selling shovels is making out like a bandit, everyone else is make a profit on the previous gen but requires a 10x cost increase for the next gen. And thus 10x more shovels.. As soon as 10x more shovels stops giving 10x+ improvements this is the wrong investment.

Hints are we already reached this point.

Some AI companies will pivot and improve in other ways with more linear costs/results.. The ones hoping the line continues to the moon.. I think they overshot.. I just don't know when it will fall back..

If not for the banks investing hevily into it, i'd not be all that worried.

Every company in that list could shrink by half and we'd all be at worst back to covid times. Sure unemployment would suck, but do we REALLY need microsoft and NVidia to be as huge as they are?

It seems like the wealthy propping up their own bubble.

I don't think it's a bubble, first there is absolutely zero comparison to the housing bubble, which was a financial problem that caused housing prices to inflate, while the inherent value of housing stayed the same. This alleged AI bubble is mostly driven by companies that have lots of money, so it is not credit based, and there are underlying products that actually have increasing value.

The better comparison would be the dot com bubble, which was dominated by companies that didn't even have a product and didn't make any money. The frenzy is similar, but the fundamentals are different.

AI investments may cool down because obviously there is a frantic race in an attempt to get ahead.
But the reason I don't think the AI bubble will burst is because it is driven by companies that actually make money.
They may lose money investing too heavily in this, but the most companies investing in this can afford it.

I think the most AI bubbly company isn't even in the diagram, because that is Tesla. Tesla might actually go down, because Musk is insane.

But in general if it is a bubble, it is a very very long one, Nvidia value has been exploding since 2016 based on their AI product dominance. If this is a bubble, I think it will go down in history as the longest living bubble ever.

Is the market frantic? Yes absolutely.
Is the value of some AI companies extremely high? Yes absolutely.
Is it a bubble that will burst? No if it's a bubble, this one will be more like deflating to a less frantic level, because ALL the main players have the money to weather losses.
And the main AI companies have actual products that make money for them rolled out already. So it is not like the dot com bubble.