Honestly, I wouldn’t be surprised if we see the ai bubble pop in the near future. The roundtripping that all the big American tech companies are getting into at this point beggars fucking belief. And in contrast to the .com burst in the early naughties, the infra that will be firesold has a 1-3y depreciation timeline, in contrast to the fiber lines back then, that were measured in decades, so nobody will come out ahead - except for the people who cash out before things tank.
This is not investment advice, just sharing a strategy: I’ve diversified my portfolio by shifting STRONGLY away from US ETFs and securities. I think I only have about 20% total left in that bucket at this point. The side benefit is that I’m actually keeping pace with inflation - on investments anyways.
The AI bubble is being supported by NVIDIA. They’re investing in the majority of the companies that are then buying chips or services from NVIDIA/Partners (that they’ve also invested in).
The demand for the chips is out-pacing the actual product, AI products & services. And the major players in this space are not making money. OpenAI would have to do a 10x minimum price increase to even begin having a chance to start reporting profits.
Unless some serious outside investments come in, some serious sales of AI services and products, or some creative scammy pivot (crypto?), we’re about to live through another market bubble collapse. Unless
I actually just looked up Nvidias historical value and they’ve gone from $100B in 2020 to $4.5T in 2025. They’re apparently worth as much as the US government earns in tax revenue per year. Roughly 15% of the US’s GDP alone. They’re probably not going to fare well when the bubble bursts (if it’s allowed to).
The top 9 companies are tech companies, mostly AI slop (with the possible exception of Broadcom). Those top 9 companies are over 1/3 of the market cap of the S&P. And that doesn’t even count the AI slop companies that are smaller.
When AI crashes, it will give the S&P a 25% haircut… (But don’t necessarily sell! For all I know, it will all double before it takes that haircut.)
None of said companies are exclusively AI companies though. They were profitable companies with established products and services already before the AI boom. That doesn’t mean they’re not potentially overvalued but it also doesn’t mean that market crash makes them go to zero.
Yes, they are all profitable companies with established products. But that part of their business is just a part of their valuation. AI slop is the rest. NVidia is trading at a P/E ratio of over 50. Do you think they can sustain that once people stop buying AI chips?
And those are just the largest companies. There are smaller companies it’s riding the AI bubble which will simply cease to exist soon (along with all the investment in them.)
The NASDAQ dropped something insane, like 80%, when the dotcom bubble crashed. The S&P is different and more diversified, so it won’t crash so hard, but I think 25% is as good a guess as any.
Honestly, I wouldn’t be surprised if we see the ai bubble pop in the near future. The roundtripping that all the big American tech companies are getting into at this point beggars fucking belief. And in contrast to the .com burst in the early naughties, the infra that will be firesold has a 1-3y depreciation timeline, in contrast to the fiber lines back then, that were measured in decades, so nobody will come out ahead - except for the people who cash out before things tank.
This is not investment advice, just sharing a strategy: I’ve diversified my portfolio by shifting STRONGLY away from US ETFs and securities. I think I only have about 20% total left in that bucket at this point. The side benefit is that I’m actually keeping pace with inflation - on investments anyways.
The AI bubble is being supported by NVIDIA. They’re investing in the majority of the companies that are then buying chips or services from NVIDIA/Partners (that they’ve also invested in).
The demand for the chips is out-pacing the actual product, AI products & services. And the major players in this space are not making money. OpenAI would have to do a 10x minimum price increase to even begin having a chance to start reporting profits.
Unless some serious outside investments come in, some serious sales of AI services and products, or some creative scammy pivot (crypto?), we’re about to live through another market bubble collapse. Unless
I actually just looked up Nvidias historical value and they’ve gone from $100B in 2020 to $4.5T in 2025. They’re apparently worth as much as the US government earns in tax revenue per year. Roughly 15% of the US’s GDP alone. They’re probably not going to fare well when the bubble bursts (if it’s allowed to).
Take a look at the S&P 500, by weight.
https://www.slickcharts.com/sp500
The top 9 companies are tech companies, mostly AI slop (with the possible exception of Broadcom). Those top 9 companies are over 1/3 of the market cap of the S&P. And that doesn’t even count the AI slop companies that are smaller.
When AI crashes, it will give the S&P a 25% haircut… (But don’t necessarily sell! For all I know, it will all double before it takes that haircut.)
None of said companies are exclusively AI companies though. They were profitable companies with established products and services already before the AI boom. That doesn’t mean they’re not potentially overvalued but it also doesn’t mean that market crash makes them go to zero.
Yes, they are all profitable companies with established products. But that part of their business is just a part of their valuation. AI slop is the rest. NVidia is trading at a P/E ratio of over 50. Do you think they can sustain that once people stop buying AI chips?
And those are just the largest companies. There are smaller companies it’s riding the AI bubble which will simply cease to exist soon (along with all the investment in them.)
The NASDAQ dropped something insane, like 80%, when the dotcom bubble crashed. The S&P is different and more diversified, so it won’t crash so hard, but I think 25% is as good a guess as any.