So, what's your backup plan? Are you diversifying your investments to protect your assets, or are you pulling your money out entirely and going full "under the mattress" mode?
So, what's your backup plan? Are you diversifying your investments to protect your assets, or are you pulling your money out entirely and going full "under the mattress" mode?
21 comments
I like Claude Code. I think it's the best thing that's happened to software development in a long time, actually. Other similar tools are probably good too, I just haven't used them yet. But I'd hardly call that a transformational technology ushering in a new era of civilization.
It took decades for electricity to transform the way we live. Same with computers 100 years later. I suspect it will be the same for AI.
Dot Com was real hype. The usage of internet and PC with Internet as well as user's usage pattern simply wasn't there. AI usage is real and is building on Smartphone platform as well as PC. Even PC, Internet and Smartphone all three in their era didn't get as quickly adopted as AI. Considering Government or business is very slow to adopt to new technology, but CoPilot literally widely deployed from Government to Fortune 500.
I dont believe in AGI or ASI. But I also dont think we are currently in an AI bubble.
Regarding bubble bursting, there have been market protections put in after 2008/09 so I don't know that we'll see major stock crashes. Its more likely that companies may miss targets, products start plateauing on features, etc.
If a crash were to happen, I read in a book (Intelligent Investor maybe?) there are usually macro indicators of patterns to look for, I forget what they are but its things like GDP, jobs, CPI, major indices falling X out of Y weeks in a row and other things like that. But that was all from a book looking in hindsight at prior crashes, prior to 2008 and whatever changes they've made since then.
Unlike metrics like operational cash flow and net income, statements like "30% of our code is now written by AI" cannot be audited so leaders can't really be called on the veracity of such statements. As long as decreasing opex can be tangentially linked to "AI innovation", they're golden.
NVDA and cloud providers that are highly staked in AI would likely take a hit if a 70B model could do what Sonnet4 does.
But overall, AI is here to stay even if the market crashes, so it’s not really a AI bubble pop, more like a GPU pop.
And even then, GPU will still be in demand since the training will still need large clusters.
Land/real estate Gold/silver Art/Collector items/vehicles
Savings bonds and the like are also very safe places to put some money.
The values of none of the BigTech companies that are overweighted in the S&P 500 have seen their values rise because of AI. Their fundamental business value and revenues are mostly the same sources - ad revenue (Amazon, Google, Facebook), retail sells (Amazon), cloud hosting (Amazon, Microsoft and Google (?)), enterprise sales and services (Microsoft) and device sales and services (Apple).
The bubble bursting will affect VC and private equity and mostly private companies.
Instead, short the stocks of overvalued AI players and ride them on the way down to something closer to reality.
I think this is probably safer than pulling out of index funds, as you can afford to hold these shorts long-term. I wasn't aware of any obvious AI frauds that IPOed, but didn't really research it.
Just short the NASDAQ 100.
See "SQQQ.
But any AI meltdown will hurt the major public companies too. NVDA being probably the largest with the most to lose.
See "NVDQ".
If you can get a six figure worker to be 20% more productive for a grand a month, you're going to do that. That's a huge market!
Don't listen to the hype about AGI and world changing tech, think about the new market that might make every white collar worker 20% more productive.
The market can stay irrational longer than you can stay solvent.