Munching our popcorn (while we still have fuel to heat it up) & waiting for Trump to crash and burn ...
We've discussed before the AI bubble, its seemingly inevitable forthcoming bursting, and the system-crashing potential it might hold. Well here's something to give anyone pause:
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| Source: CHARTR / date from Bloomberg |
It's pretty remarkable to me that Uber needed such a long runway - surely its only major assets are software? Tesla looks pretty outstanding value & commercial discipline[1] by comparison - and Musk was shooting for the moon, with serious hardware involved, as well as software.
But why am I gazing at the foothills? Because then we step back and look at the mammoth on the mountain, and - wow! What type of revenues do they "forecast" - and persuade investors of - to make that even vaguely sane? And OpenAI isn't alone out there. What kind of economy can afford their products on the necessary scale?
Sometimes you have to look at something - a bullion price spike, a US president - and just tell yourself the obvious conclusion is the correct one. That Is Insane.
And the US economy[2] has been wagered on this? Hello China - the rest of the century belongs to you.
ND
PS: for something more edifying on AI, try this:
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[1] One would need to interrogate that tapering-off of the black bars: was it Tesla that bought X? Had greenie car buyers lost faith in Musk even before 2025 and his rogue DOGE behaviour?
[2] And I'm the one that has said, many times: in the long run, never bet against the US economy ...
2 comments:
@ND - Every Uber ride ran at a loss for years to undercut existing taxi firms, for the longest while it seemed profitability for them was a dream.
As for the bubble bursting, prior to that we're seeing an exodus from private finance of software companies, fearing AI will undermine them.
I still reckon the bubble will pop next year, although Trump looks to be accruing all the crises he can get before the midterms, so who knows.
CH
In the long run, we are all dead..... but you already knew that
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