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.
I think the biggest difference between this bubble and the ones that pop are whether the valuations were built by debt. In this case - no. So when their products turn out to be less useful than they claim, it will devaluate. But the debt issued to build the bubble wont go through a sudden correction that is amplified and causes an even bigger collapse like in 2008 or the dotcom bubble.
Well argued. Also, even if it is a bubble, it’s arguable that most technology innovations are preceded by necessary bubbles which are important for directing investment into emerging technologies. The railroad mania in the 19th century or the fibre optic rollout in the late 1990s, during the dot com boom, benefited humanity long after the froth and excitement subsidied.
Its not a bubble but most people here dont think for themselves. They dont even seem to understand the connection between what news is put out, which analysts they choose to give attention, and for what purpose.
Imagine living your life and just believing whatever someone says in the news just because he has the title of analyst. And never thinking about who profits from that specific guy being on the news at that specific time. Who picked that guy to say what he does and why? Its not random.
Being able to influence the market is key to making a lot of money. How do people think they influence the market? This is how they do it. How else?
Sometimes they probably lose money too, specially when orange man opens his mouth and says something very stupid, like last Friday. But then they position themselves for the coming uptrend and make their money back, maybe even more then they had before, since they have giant pockets.
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.
In bicycle repair terms it is called a slow leak.
Last I looked, the big AI companies are all hemorrhaging money.
It’s perfectly normal for a growth business to invest more than they make, I didn’t say they were profitable yet, but they are making money.
Citation needed.
the only company making a profit is nvidia. everyone else is losing.
Not true, plenty of AI companies are in the green like Midjourney. Not everyone is hermorhagging money like OpenAi to curb out competition.
I think the biggest difference between this bubble and the ones that pop are whether the valuations were built by debt. In this case - no. So when their products turn out to be less useful than they claim, it will devaluate. But the debt issued to build the bubble wont go through a sudden correction that is amplified and causes an even bigger collapse like in 2008 or the dotcom bubble.
If it doesn’t pop, it’s not really a bubble, it just looks like it.
Well argued. Also, even if it is a bubble, it’s arguable that most technology innovations are preceded by necessary bubbles which are important for directing investment into emerging technologies. The railroad mania in the 19th century or the fibre optic rollout in the late 1990s, during the dot com boom, benefited humanity long after the froth and excitement subsidied.
Its not a bubble but most people here dont think for themselves. They dont even seem to understand the connection between what news is put out, which analysts they choose to give attention, and for what purpose.
Imagine living your life and just believing whatever someone says in the news just because he has the title of analyst. And never thinking about who profits from that specific guy being on the news at that specific time. Who picked that guy to say what he does and why? Its not random.
Being able to influence the market is key to making a lot of money. How do people think they influence the market? This is how they do it. How else?
Sometimes they probably lose money too, specially when orange man opens his mouth and says something very stupid, like last Friday. But then they position themselves for the coming uptrend and make their money back, maybe even more then they had before, since they have giant pockets.
If people think it’s a bubble, then it’s a bubble! (Self-fulfilling prophecy.) Google Trends is a decent gauge of public sentiment. That said, the fundamentals are pretty flawed too.
Especially your first paragraph is probably spot on. Short attention span.