I mean funny enough there is stastical proof that shows that massive pullbacks usually occur around September and both the great depression and the 2008 great recession, while technically having started earlier, fully exploded in September.
I think its probably the sudden rise in costs of kids going back to school and people feeling less summer happy/free-spending but yeah, could be the beginning of the plunge or just a normal fall retraction.
Also, gotta start to tighten the belt in Q3 so the Q4 numbers can look good for the shareholders
Oh, actually yeah. Markets rarely even respond to consumer seasonal spending these days anyways until it’s beyond a problem. But that usual pullback is probably entirely based on that holiday bump looking better after and the spending loss on marketing looking bad right before.
I wonder if the history of recessions kicking off then in Sept is the predictions in sales being lower and people realizing they won’t get their good looking Q4.
They freak out pull their money and basically a bank run of our wealthiest.
Not this year. CoreWave is literally Microsoft outsourcing hardware if you read their s1.
For the years ended December 31, 2023 and 2024, our largest customer was Microsoft, which accounted for 35% and 62% of our revenue, respectively
https://www.sec.gov/Archives/edgar/data/1769628/000119312525044231/d899798ds1.htm
Oh I highly doubt it’s anywhere near over yet. This may be the first bubble to pop but the frothing frenzy is still accelerating and with all the trillion dollar tech giants still attempting to boil the oceans with the massive resources they’re putting into this it’s not going to collapse anytime too soon, unfortunately. It will inevitably though, small comfort though that may be. As the saying goes, the market can stay irrational longer than you can stay solvent, and the market is highly, highly irrational for AI right now.
The market for AI is not a valid product. It’s the highest level we’ve ever gotten for snake oil. And for some reason the top businesses are all grabbing the bait, I guess for fear of being left behind if it actually becomes a real thing. Or maybe corporate America is really that stupid. I can’t tell.
The profits. They know current AI is LLM but the goal is to drastically increase computing power to crunch your data against you and dynamically price your life against you. Ad revenues aren’t growing anymore and they need another way to make more money off the massive piles of data they have.
So what you are saying is that the AI/DataMining bubble is all that is stopping the Advertising Bubble from popping and destroying al of Corporate USA.
Bring it on!
It really is that stupid, yes.
It unfortunately won’t be, as we still have too many CEOs that invested heavily into forcing AI workflows and they rather let the company burn than admit a mistake.
But it could be an early sign for non tech savvy investors that are still wondering if they should invest in AI or not.
If the market gets spooked, it doesn’t matter what CEOs do. The companies burning is the bubble popping. See the dot-com or the prime-mortgage bubbles.
It always starts with a little wobble that causes investors to pause and wonder if all the hyper optimism is maybe unfounded and start to look at the fundamentals. Then they realize the emperor has no clothes and the bull turns into a bear.
Not saying that Coreweave is that wobble; many analysts and pundits will try to sweep it under the rug to maintain the irrational exuberance, but once sentiment starts to turn, it can happen fast… pop!
If the market gets spooked, it doesn’t matter what CEOs do.
That’s true, but when a CEO forces a company the size of Microsoft to use AI for all tasks, regardless of effectiveness, you can bet safely on AI companies selling their product because demand is literally being fabricated and forced into existence.
True. I’ve been on an extended sabbatical from work in an industry heavily impacted by LLM use, and I’m not looking forward to returning and being forced to use it, especially when it doesn’t benefit my productivity.
Still, even with this forced demand, spending is vastly outweighing the revenue generated. Venture capitalists seem to have an absurd amount of money to spend, but even their resources are finite, especially without ultra low interest rates.
Then again, I expected cryptocurrencies to implode years ago, but even after FTX it stabilized enough that the bubble has kept growing. It hasn’t had to weather a real recession yet and I expect that will apply a lot more pressure when that finally happens.
Between those two bubbles and the tariffs finally starting to take effect, it feels like we’re in for a really bad time. I really hope I’m wrong.
Edit: Forgot to mention that Intel seems to be thrashing. Their current CEO seems to be slashing the people he needs to recover from their current conditions and shutting down construction on fabs that represent their future. Never thought I’d see a day when Intel was facing an existential threat, but here we are.
I think that Microsoft, Apple, Google are too big to fail, regardless of how terrible they are being managed.
Exactly the same as GM, Ford and Chrysler were too big to fail during the last GFC.
My optimism: this will be the last tech bubble.
So… Death of capitalism then?
Because I know you’re not thinking people will learn the lesson.
They’ll learn. The next bubble wouldn’t be in tech. Maybe biotech.
I don’t know. I’ve been through three or four tech bubbles already.
The thing is, there’s no lesson for them to learn. They still walk away rich. A bunch of suckers lose their money, sure. But to them, that’s the purpose of suckers.
Probably if they can manage to make that brain-computer interface.
As long as there are investors with more money than brains there will be bubbles
A lot of those investors are going to be cleaned out with this bubble burst.
They were in 2001 and then again in 2008, and then a lot of then got cleared in a big crypto bust…
It doesn’t seem to take too long for them to be back in the saddle. A key ingredient is they get to play with other people’s retirement money, and when things get too scary and they might actually be bankrupt, the government floods them with money to keep them happy.
The bubble profiteers have children they leave their fortunes to. They, in-turn, want to hit it big. The grift continues.
Bet
Do you mean that; TechBros will be more responsible in the future? Or Society will collapse?
I mean that bubbles will happen somewhere else.
I was thinking of the Einstein quote about WW3 and WW4.
https://www.snopes.com/fact-check/einstein-world-war-iv-sticks-stones/
No it will be cursor that goes down first.
Doubt
It doesn’t matter when it pops (notice I didn’t say if). The stock market isn’t the industry.
The Internet bubble popped in 2000. It didn’t change anything for anyone unless you happened to be a CEO of a dotcom with millions of shares.
I very much beg to differ. I remember it very well, as the company I worked for laid off almost all of their workers and it was impossible to find a job. All companies froze hiring. People lost fortunes (including retirement accounts). The nasdaq went from 4800 to 1840. There was a major recession.
The amount of malinvestment in AI is so much worse than the Internet bubble. It’s basically the only reason the US economy didn’t contract hard the last few months. Making data centers for AI has been creating a lot of construction jobs.
It’s going to be painful when it pops, and it needs to happen sooner rather than later.
Indeed. It’s masking how bad the US economy actually is. I read recently that about a third of economic activity in the US is currently a few big tech companies pumping each other. Take that away and the underlying picture is ugly.
Thats disgustingly horrifying.
Hopefully a lot of those data centers can be repurposed for cloud data and web hosting.
I only know a little about data center buildouts, but my understanding is that GPUs and web servers aren’t built out the same way. That said, I’d expect GPUs just need that much more power, and having more power than you need for a web server is fine.
The dotcom bubble destroyed a lot of retirement accounts people had no ability to choose the companies invested in as they were often generic, broad, investment portfolios. It also killed a lot of lower end white collar jobs, and damaged a lot of local government investments, leading to steep declines in those services. There are numerous other ways non-tech people were affected, but I don’t feel like writing a bunch.
I am interested to know how old you were when that dotcom bubble popped, though.
The Internet bubble popped in 2000. It didn’t change anything for anyone unless you happened to be a CEO of a dotcom with millions of shares.
Or you were close to retirement and your pension fund just cratered.
Stop looking at the business class. Those assholes have each other’s backs. Look down to the ordinary people and see the damage done that nobody bothers reporting on.
maybe you didn’t live in a city that had a lot of the Internet start-ups, but the Internet bubble was felt by millions of people. I lived in Seattle and it had a lasting impact on everything.
The dotcom bubble pop took out a lot of funds and a lot of businesses. A lot of things you could buy on the Internet stopped being available online for a bit as so many vendors tanked. Ultimately the equivalent of almost everything you would have remembered came back, but there was a retreat.
