Stay well diversified, keep investing each month, and take a nap.

There are almost surely severe bumps ahead for the AI space and that will likely spill over into the broader market. But unless you’re retiring in the next few years don’t worry about it. You can’t time the ups and downs and the only proven strategy is to just keep investing in a broad indexed portfolio and just ride out. You’ll take a short term hit but also end up buying on the dip because you don’t stop investing.

Hold short term debt (e.g money market funds or SOFR ETFs). Then you will have cash in hand if either stocks fall or yelds raise.

Never buy derivatives as a non institutional investor.

I thought that a year or two ago. Thankfully I did not. I have no idea how long the music will keep playing.

I am not a financial advisor.

Assuming you are the average person, and not a financial professional, using actual financial hedging instruments properly is unlikely, and far more likely to just increase risk and lower expected return.

A realistic way for an American citizen to reduce risk in the current market is to have a globally diversified portfolio that under-allocates to the US.

> What's the best way to hedge against this, considering many of us have significant savings in the market?

honestly, if you're >= 10 years away from needing that money (retirement or whatever) then the best hedge is to ignore the news and just keep contributing to your investment as always. I got caught up in a couple moments (tarif drama April before last was one) where i panicked and sold and then it only took a few months to get back to even meanwhile 18% of my capital gains were now due to the taxman. I wrote a check to the IRS for 10's of thousands for no reason except over reacting and ignoring every financial advisor's advice.

if you're going to need your investment money within 10 years then you need to get advice on how to start reducing risk (and therefore reward) because you don't have time to survive and repair from a crash.

#1: Great question, and I would love to hear the answers (And am learning from the ones posted)

#2: What I've done so far: Haven't bought stock in a year. Have moderate short positions on Palantir, SpaceX, and Tesla. Have big short positions in the most popular Quantum computing companies. (Scams IMO). I have sold most of my positions ("profit taking"?) in stocks which have gone up a lot in the past year. (Nvidia, Broadcom etc), and am no longer using margin; about 1/3 of my brokerage value is now "cash", generating ~3% interest.

Wouldn't it be wiser to get out of the market into fixed rate assets like government bonds? Maybe have some into puts on SPY (or QQQ since tech would probably have bigger losses) too, but mainly getting out of long positions on what seems a really overvalued stock market

Bogleheads would say to stick to a three headed portfolio, maybe a bit more biased towards bonds. So that's what I'm doing.

Bet on Chinese tech sector to eat everyone's lunch with cheaper, faster, smaller, open-weight models?

Just sell all your ETFs and buy them again when the market goes up or down. You're very likely to lose money with options and you will definitely lose a lot of money if you buy enough options to hedge your full exposure.

What's the best way to hedge against this, considering many of us have significant savings in the market?

I dunno.

"The market can remain irrational longer than you can remain solvent"

Is there really any answer to this kinda thing other than having a diversified portfolio and just riding it out?

So you want to pay back the gains you make for the next year or two? Sounds like a good strategy

Reminder: Serious people have been predicting a market crash "within the next 3 months" for 3 years now. In that time, the "market" has gone up around 70% (66%-86% depending on the what part you are looking at).

A friend of mine and I go out to lunch every 3 months and talk about, among other things, investing. We've made a trope of it, calling out the people who are predicting an imminent market crash every time we have lunch.

I'm not saying that it doesn't look like it's going to crash, but I'll also say that there's also a very sizeable downside potential for getting out of the market.

Gold maybe? (no investment advice)

It's tempting to sell a bunch, but then you've got cash. What do you do with cash when the government keeps printing money and assets are all overpriced?

> savings

> market

These are two different things.

Because there are instruments that make market exposure easier, doesn’t make market exposure correct 100% of the time.

Dogs of the Dow

>A few puts on SPY dated a year or two out?

You think the hedge funds selling SPY options don't have this priced in already? Of course, you can still make money on this bet, just like you can win money at a roulette table, but unless you think have some special insight that hedge/quant funds don't have, buying options should be negative EV.

Doesn't Nvidia's success depend hugely on AI money pumping up demand for their products? If/when AI companies run out of money to keep investing in data centres, the bottom will fall out of the market and hopefully we can go back to buying reasonably priced graphics cards.

I think he's saying that if one company panics or fails, all of the other AI companies will quickly pull out, and it will be a race to not be holding the hot potato at the end when the bubble bursts. Lots of analogies there! This is where we get the phrase "the stock market takes the stairs up and the elevator down". It crashes quickly and hard, and can be triggered by one event.

Without the massive investiment in GPUs, what is the excessive IaaS going to support?

Other than having a nice management UI, what does Virtualbox do that qemu doesn't these days?

A financial bubble has almost nothing to do with how good the product is. It's about how much of the value the company can capture, and what the ratio of that capture is compared to the investment.

It doesn't matter to investors if OpenAI or Anthropic can build AGI if a year later 10 competitors have similar models and eat into the revenue. OpenAI and Anthropic needs years, if not decades, of significant market dominance, post-enshitification, to justify their investment spend.

This:

> Everyone in the tech and media world is dead set on this being a bubble.

is completely orthogonal to this:

> Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer.

The industry being in a bubble or not is irrelevant to the tech being good or bad. The dot-com bubble popped (and was a bubble) even while the tech was fit for purpose.

I think the "bubble" is more about return on investment and not usefulness of the technology. So much money has been invested on the assumption that so much return is going to materialize. The more money going in the bigger the expectation of return, that's the bubble.

> Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer. Teams can and will shrink.

If that's true or not, it's a bit irrelevant. Maybe teams won't shrink because of Jevon's paradox, or maybe tech debt will catch up.

But it doesn't matter because the people calling this a bubble mostly believe that the companies burning money cannot have the return on investment needed. This can be for a variety of reasons, but my favourite one is just that open source AI models are good enough, cost a fraction of what the frontier ones do (with predictable costs), can be fine tuned, and can be relied upon (no orange tweet banning your acces to the model you've been using). So for me OpenAI and Anthropic will really struggle to merit their valuations.

And then companies like Oracle are just a dumpster on fire. GPU hosting is a commodity business; expensive one, for sure, but there's no way in hell they'll make actual returns on the money burned with zero moat. And things are even worse when you consider the political involvement of the CEO and his nepo baby, which can easily burn good will.

Yes, but all bubbles (except the tulips...) have a real, valuable, new technology at their core. That it's amazing technology doesn't stop the financial side of it being a bubble. In fact it all but ensures it is.

Meta had Llama, which set a lot of things on fire in a good way, and then disappeared from the scene as tech advanced.

What does Microsoft have?

Not sure SpaceX counts. Nobody sane uses Grok. It's untrustable due to reality-distorting political bias training, and it's strongly associated with CSAM production. Not what you want in a reliable corporate utility.

Google's "IPO" is an extra raising round

Is Meta even in this race anymore?

If you don't count the autosummary/gen answer at the top of googling an answer I would say so. Outside of the more technically inclined crowd I think the sentiment is if you aren't at the forefront (opus/fable/chatgpt) then your last or at least indistinguishable from all the rest of the lesser models.

If you're selling deterministic output, just use traditional code. If you product is inference, it has to be the best inference. This becomes more apparent when you bounce between powerful models and smaller cheaper ones, the cheaper ones _feel_ worse to use.

They get all of the ad revenue, but really don't sell as many money-losing monthly subscriptions as the other guys.

Also, even knowing both what will happen and when is a separate thing from having access to capital. You can't really tell that someone posting that hasn't already also taken the biggest leveraged position they can (unless that person is so rich that doing so would itself visibly move the market, which most people who might post comments are not.)

Then you don't know it's impending

Bingo

ROI on bank loans to Oracle and corporate bonds. Those will have interest rates and returns.

If Oracle is highly leveraged or betting the farm on AI, then their credit worthiness goes down.

Alternatively, if money floating around to make loans is drying up, companies have to offer better terms to attract the dwindling supply

> The exit plan is to offload overpriced shares, that they paid billions for, onto the public market. If they don't IPO, those investors get nothing.

I keep seeing these unsubstantiated claims. They’re out to get us and just pump and dump on public markets!

Yet, before they IPO they have to go around and do what? Who sets the IPO price? Who buys the shares? If the shares tank, the valuation of the company goes down and locked up shares lose value. It’s not really in anyone’s interest for IPOs or investments to fail and while pump-and-dump schemes certainly exist they are not the norm. The conspiracy theory level of distrust and cynicism is not healthy and makes one a very poor investor.

If individual investors are buying shares and getting blown up, that’s their problem. Invest and due your own research. Broad market funds exist and have so for decades. Most financial advisors even will put you in to those funds and corporate 401k plans while increasingly allowing for more investment flexibility (freedom is good) default and educate employees by default on target date funds and index funds. There is a wealth of information out there.

Similar experience. It was surreal coming from the (relatively) simple waters of Azure and Digital Ocean.

We host more than 200 customers in OCI (because we have to). Its terrible. The service is terrible and they are breaking stuff all the time. Amsterdam down for a few hours today alone. We spend millions with them and can’t even get someone to join a bridge. It’s baaad

Zoom ran on OCI some time ago; not sure if they still do. (They got a shitload of free credits iirc)

Many companies use OCI for their Oracle DBs, as I believe they get some sort of discount when run this way.

TikTok for US users

Keep in mind that Oracle can be deliberately nebulous about what their cloud offering is (pun intended).

Any hosted service can be bent into the shape of a cloud. Large parts of Oracle Cloud balance sheet is probably just hosted PeopleSoft and similar.

They have this in common with IBM which, at least on paper, have a large cloud business.

> I can't name a single thing running on Oracle Cloud

CrowdStrike and Uber

> Hetzner

I don't know of any upper market EMEA customers on Hetzner. I've met Scaleway, OVHCloud, and even STACKIT users but never Hetzner.

zoom. uber. airbnb. openai. bunch of banks. samsung, apparently..

For the longest time they were a piñata for free compute with people making multiple accounts for their free ARM instance, but with the AI crunch they're clamping down.

I'm guessing they don't care if actual business gets caught up in that because from their POV actual business comes from an account manager, and self-serve is just them cargo culting AWS/GCP

Enterprise companies typically don’t just add credit card forms, they push you through a sales process and don’t care much for small accounts.

Not if the goal is to get you into a sales funnel with a sales exec to juice the contract value. Oracle doesn’t give a single shit about someone spending $500/month

All "shady sites" happen to belong to business created in 1949?

That's quite the coincidence.

I don't think Zitron's argument is that AI is useless so much as that AI in it's current form is unsustainable and maligned with what's good for society long-term (which I agree with).

well, I've been working on the Zig compiler lately, there you have to swear off using AI in any capacity. even your tab-complete, yes. I find that yes, I'm a little slower with regexes instead of GPT mini/Luna models as a find/replace engine, but I am quickly getting grasp of it, and I see the future where I'm faster with Neovim and ripgrep than Codex. the structure of the standard library is super-logical and the code is eye-wateringly readable. I don't even feel the need in, or will to, use Codex in any capacity when working on such a great project. DVUI is also great to work with.

that said, I also used to work in environments where even Claude Opus tripped over itself when trying to untangle its own slop. that made me looking forward to AI going bust and folding back into tab-complete. that bubble revealed a lot of projects that always were slop, even before AI. the LLM policy became a great proxy of the quality standard the codebase and the community upholds itself to

It’s not interesting to talk about per HN rules, but I expect your downvotes are because your comment doesn’t add any substance or interesting new details, not because people disagree with you. Votes here are different than Reddit (oh you have 94k HN karma! You probably know that then)

The narrative that superintelligence is imminent is partially at fault here.

There are competing definitions of what intelligence even is, and the one that I find most striking is from Francois Chollet which is that intelligence can be boiled down to skill acquisition efficiency. This type of definition makes intelligence more akin to polishing a ball than growing a watermelon.

The superintelligence doomers warn that the watermelon is going to start growing exponentially and crush everyone. But what might actually be happening is that we are not growing a watermelon but rather polishing the ball until its really smooth and shiny. There's a point where you can get it to micron levels of polish but for most tasks (white collar text domains tasks), it's smooth enough! You will be able to go to the ball store and buy a low cost made in china ball for most tasks.

The real challenge is actually branching out domains and modalities to tackle things like blue collar labor. Over time, white collar work automatable or able to be made hyperefficient by LLMs will see LLM commoditization.

Observationally, for people that /aren't/ using models to code but to just do their white-collar job, claude.ai /is/ AI, now. The entire perspective for how to use AI is through claude skills, claude projects, claude cowork, etc. They've massively won the corp buy-in at the moment I believe.

I guess I’m thinking a lot of companies seem to be getting Claude code subscriptions. It usually takes some time and effort for an org to switch away from one solution. In the meantime a lot of workflows get more and more tied to Claude in particular.

It’s not much of a moat, but it’s more than a lot of orgs have.

obligatory correction: the semiconductor layer is still owned by TSMC and Samsung. Google sketches chip designs for them to implement - that's the lowest layer they control. I am not denying that this is impressive.

> That's a losing proposition for any token provider

The specialized models for targeted verticals being discussed may well not be sold by tokens, but instead be behind the scenes powering dedicated packaged solutions where the customers don't have raw access to the model. Token providers still won’t have a moat, but AI isn't just selling tokens.

If matrix multiplication isn't the main primitive, I think we have a lot of pain coming our way.

Sure, but fundamentally they’re acting as a distributor of someone else’s product in the form of the frontier models. That’s a classic middle-man.

No value judgement. I think this is a fantastic strategy.

Weights are worth far more than data centers.

AMD is held back by their interconnect and firmware disadvantage compared to nvidia. They’ve been trying really hard to create their own cuda, but rocM and HIP still aren’t very popular especially for research.

Have you ever actually had anyone work with these chips? Developer ux on amd is terrible.

Google would have to start selling them (the real ones, complete with interconnect) to third parties. If google does that, though, Nvidia is done.

Unlike AMD, Google can actually ship software. AMD has never shipped good software other than drivers (maybe) in the entire history of the company, including both ATi's history and true AMD. They have always relied on Intel to provide the software.

Can concur. I hate them with a passion, but corps love them, and I hate to say it... with good reason.

They're the only player in the Identity-Document-Email-VM-Storage space that's even remotely unified.

The administration isn't fully immune to public opinion yet.

> They'll give a bribe to Trump, they'll offer up 5% of the stock to Chairman Trump as the People's Stock now that the US is basically a bizarre oligarchy form of communism, and Oracle will be declared a state enterprise that cannot lose money.

A little bit dangerous for a US administration (any US administration) to do a bailout of unloved companies just before a midterm.

Not that Trump won't do it, just saying that he'll think twice about it if he wants to hold on to the power that the American people have given him. It's one thing to boast that he can shoot someone in the street and the public won't care, quite another to tell the masses that he's funding their upcoming unemployment using their tax money :-)

> They can rent out their AI infra to The Hyperscalers.

I can't tell if this is supposed to be sarcasm or not :-/

Aren't all the token providers right now over-provisioned? They aren't trying to use up all their capacity, they're selling it to one another.

I think the hyperscalers are smart enough to not let Oracle be their landlord.

xAI financials are public, and OpenAI financials leaked a short while ago.

That's the best possible interpretation of them.

The other possible interpretation is that they are manipulating the numbers (that they have to show to investors) and inference isn't actually profitable either. If they are not manipulating the numbers right now, both companies have a serious case of uncontrolled operational costs that they have to solve too.

Well there is clearly also a lot of non-GAAP style “trust us bro” things going on too which generally boil down to “if you ignore all the reasons why we’re not profitable then we’re profitable.” It’s WeWork’s “community adjusted EBITDA” messaging repackaged.

I remember one thing that struck me when skim reading that the first time:

it only "works" if the government actively does everything in its power to support the boom. No restrictions on new power sources, on pylons and transformers, on new factories to make power sources and compute, on data centres.

This was never going to be the world we live in.

Still surprised by the admin actively punishing politically incorrect power supplies (renewables) and then starting a stupid war with Iran, but even without that nonsense, we were never going to see the US do a command economy pivot, and even if we had something would've broken like it usually does with noobs (and even most politicians are noobs) trying a command economy pivot.

> yeah.. https://ai-2027.com/

That site is too funny :-)

> [mid-2026] But China is falling behind on AI algorithms due to their weaker models.

This AGI silliness is predicated on a flawed "Platonic" view of epistemology. The notion that there is some well-defined "idea space" and therefore superintelligence can explore that space faster than any human. In fact, there is no such space. There is a "token space" that can be explored, but that has only fleeting overlaps with reality.

If/when the AI bubble pops, this website will be really funny. I guess it's already funny. This is what it shows for Apr 2026:

> Reliable Agent copies thinking at 13x human speed

Still waiting for a reliable agent to think at any speed.

Don’t forget Big Data!