> As a bystander directly immune to the fortunes of AI going up or down

Sorry to break it to you but you are neither immune nor a bystander to the fortunes of AI going down. You are part of it all whether you like it or not.

It is like being in a city where Edison wired up lights.. and people are like..well I guess electricity has played out!

We have only begun to extract the value of commoditized intelligence. Sure there are arguments on local models and pricing power.. but I think we will be compute constrained for the near future.

I think it's the magnitude of the situation that is more concerning than how close we are. We might not know when it pops but when it does, the dominos are in a pretty precarious position.

> Which makes it tempting to believe it's probably closer to inning 3.

Yeah, this is what I'm thinking. New ways of productizing the technology are still be defined as people are using it. The pricing models are evolving in real-time as the providers figure out what the market will bear.

Can you convert that analogy to European?

Right - black swans are by definition things that the majority didn't see coming.

Ever since the 2008 housing crisis, people have been predicting the next bubble-burst/black-swan event.

The one that really crushed the markets was the one almost body saw coming: Covid-19.

Maybe inning 9 game 1 of the series.

inning 9 of the money/hype train, i think it's still inning 3 of the overall technology.

Fiber and railroads don't depreciate after 3 years of use like AI chips.

Fiber and railroads don't need tens of billions of dollars in continuing yearly maintenance expenses to keep them from going stale.

I worry that all this talk about "China can't be allowed to beat the West on LLMs" is a setup to saddle the public with a bailout in the name of national security.

Is there any evidence to suggest that we won't be? I'd argue that's been the status quo for decades now, so I wouldn't expect anything else (as much I hate the current state of affairs).

this would be the real travesty

I think the stock wipeout would itself trigger a recession.

If the hyperscalers needed to wipe out most of their income on interest expense they’d lose a large amount of their market capitalization. This could drop the stock market a huge amount, and a lot of spending is driven by the “wealth effect” of households feeling wealthy.

"people are lending to them" is doing a lot of heavy lifting here. e.g. https://prospect.org/2026/08/03/ai-bailout-could-be-baked-in...

> "hyperscalers are borrowing an enormous amount and so far people are lending to them. Other people are worried that this will stop"

You say this as if when "lending stops", it isn't a big deal. What you're describing is a concern for a collapse in finance markets.

Historically speaking, when the lending spigot is turned off it happens suddenly. But hey, it will be different this time.

My future's so bright I gotta' wear million dollar shades.

From the lender's standpoint they can repossess the data center.

It's not like their collateral is a bunch of NFTs.

The number is large - but I'm not quite sure it's existential. The hyperscalers have been making a ton of money and I'm not quite convinced that 200B of debt for Amazon is "world ending".

A lot of people want to see AI fail/collapse.

A lot of publications pay attention to that.

A lot of people love reading things (often only reading things) that make then feel right/correct/justified.

A lot of publications live or die on ad views.

And just like that we have a viable media business model!

the fact fortune magazine is the one ringing the alarm bell here is arguably more useful information than any attempt at a "mathematical proof".

I mean, it is. Coreweave for example is very clearly a sacrificial lamb.

FWIW Enron was also a „sophisticated company“ at the time

> I have seen countless articles and exposes about the hidden debt.

eh trolling for clicks. It's just not on the balance sheet (if i have my terms correct) so you have to look in a different report to find the numbers. If it was truly hidden then discovery of the debt would trigger lawsuits from investors. Major investors know about it already that's why no one is getting upset over it except for laymen. btw, laymen in the stock market (retail investors) just serve as red meat or cannon fodder for actual traders with real money and real information.

edit: there will def. be significant winners and losers, the stakes are very high and the dollar amounts are very large.

> Has anyone seen a definitive mathematical proof of this? I have seen countless articles and exposes about the hidden debt.

There's an old WSB saying: the market can remain irrational longer than you can remain solvent. The AI craze is that but on 'roids.

> These are incredibly sophisticated companies so presumably they wouldn’t let themselves get into a company ending bind.

The problem is, company C-levels don't care about the long term health of the company. They only think about next quarter (in a misguided interpretation of "shareholder duty/fiduciary duty") and their bonuses tied to their KPIs.

> But what are the chances this is actually an MBS type situation where the system is truly overloaded and a few sacrificial lambs are needed?

The system definitely is overloaded to hell and beyond after well over a decade of ZIRP. That money never got deflated out of the system in a healthy way and now everything is looking to fall apart.

Unfortunately, such events are already "priced in". VC essentially is built on 1 of 100 investments striking it big and 99 going bust. A market correction won't hurt the big guys, but it will definitely hurt all the small guys.

People were saying this about the Lehman Brothers and the entire financial sector at the time, right up until their bankruptcy and the great recession. Some predictions turn out to be correct. And with the benefit of hindsight, obviously so, though how much of a hindsight is needed to make it obvious is up for debate. I would argue for the AI bubble, very little indeed.

I currently pay for $20/m ChatGPT/Claude subscription. I currently put about $20-30/m into my OpenRouter account.

I find this to be a pretty good split for all my side projects. A real developer wouldn't find this sufficient I would imagine but with the recent discounts on ChatGPT 5.6 Luma and Deepseek Flash V4 0731, I tend to have plenty of left off.

I might be an odd case, tech stuff is my hobby so I enjoy playing with these tools. I do not have any media subscriptions (no Netflix, Amazon, etc) but 20-50$ a month isn't bank breaking.

I'd buy and run an open Chinese model before I ever paid for monthly access to any of these AI assholes.

My AI recommended that a chuckle at this comment would be a great balance of engagement, humor and foresight.

chuckle

South Korea had an extremely large population of retail investors investing in options and leveraged ETFs, to the point that 3% of the adult population has now been margin-called.

That setup isnt true for the US, not even close.

money printer is takin' a break

> And unlike earlier periods of heavy debt, the Federal Reserve is no longer a big buyer of Treasuries, placing a heavy burden on private-sector investors.