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Everyday AI looks more like the '08 housing bubble (lemmy.ca)
submitted 10 months ago by to c/technology@lemmy.world
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[–] 203 points 10 months ago (5 children)

It's objectively a bad thing when a country's entire economy is being propped up by seven companies and the vast majority of consumer spending is concentrated in the top 1%.

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  • [–] 84 points 10 months ago (2 children)

    Specially when those companies are valued in TRILLIONS. Nothing is worth trillions, somehow these surreal numbers have been accepted as hard fact.

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  • [–] 73 points 10 months ago* (1 child)

    Nothing is worth trillions,

    There is things worth trillions. Like full countries, and the largest pension funds and social security funds. Having a single company be comparable to those massive collections of people is insane, and it's because they think it can replace workers--when it can't, not yet, and not for a long time

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  • [–] 0 points 10 months ago

    Production must equal Consumption plus investment.

    An excess of production leads to companies closing down.

    Reducing consumption (via getting rid of workers, reducing wages, etc.) will lead to an imbalance that must correct itself.

    This can be forestalled by private debt, government debt or exporting the surplus but this is unsustainable.

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  • [–] 27 points 10 months ago

    Evaluations of everything is crazy. Net worth of celebrities with make up lines in particular is crazy. Look how many celebs are worth a billion dollars. To be worth that much, they should be selling at least $50 millions a year of product with no prediction of winding down.

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  • [–] 45 points 10 months ago (2 children)

    The most optimistic take I've seen: AI is a drain on the entire economy that sucks up all investment and this is why the rest of the economy is basically in a recession. Once the bubble pops, investors will flood back into the real economy and correct the problem.

    I'm not optimistic.

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  • [–] 13 points 10 months ago (1 child)

    Can the AI bubble please suck up all the housing investment?

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  • [–] 23 points 10 months ago

    The way to make a big dent in that is to tax unused housing, with peogressivwly increasing amounts as they continue unoccupied. And limit or outright deny ownership by companies and investment firms.

    We have more than enough housing for everyone, but a large portion of it sits unused. In many cases only because no one will/can pay what some of these companies are demanding monthly for them.

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  • [–] 8 points 10 months ago (1 child)

    I'll play devil's advocate here: agreed that the rest of the (US) economy seems to be slowing or shrinking but remains buoyed by AI / Mag 7 stocks. That said, a lot of the investment reflected above is in data centers and hardware (Nvidia, Coreweave, Oracle, Microsoft).

    The bubble pop will hinge on whether there is value in this data center buildup beyond AI. Unless everyone starts paying fistfulls of cash for AI chat, these companies may be able to find another use for all that compute and avoid a total crash. That could be a target for all that investment you mention.

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  • [–] 3 points 10 months ago* (last edited 10 months ago)

    The hardware is specialized for chatbots, it's not just something they can plug-and-play for other use cases. That means using it for other computing tasks is even less efficient per kWh and per litre of water, which will make it hard to justify the resource requirements.

    Surely some of this hardware can find new life, but assets will be stranded.

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