The "public" is completely unharmed as long as they stick to broad market index funds. Only the gamblers are harmed.

> the ones who are expected to use it at work tend to resent it

And the population at large really resents it. I have not talked to a person under the age of 30 and outside of tech who has anything good to say about AI. That's a group that doesn't vote very reliably but if AI concerns motivate them to do so, they could have an overwhelming impact.

I can’t imagine a machine that solved navier stokes and a bunch of other outstanding problems in math being called “nothing more than a wet diaper fart”

I don’t know if/when AI will ever become indispensable to normies but it’s clearly making a difference in fields that are highly technical.

That is fair but he is definitely right that Anthropic is not releasing a real set of numbers on their business

We are still waiting for at least one time of the day.

It’s hard to argue against what Zitron is focusing on, as it’s just numbers and simple analysis.

What Dan Luu is doing with that post is an act of misdirection (if not clumsy attempt at character assassination): avoiding the entirety of Zitron’s numbers and analysis (which can’t be refuted) and instead narrowly focusing on “predictions” that one can spin a hundred different ways.

If that’s convincing to the extent that you are dismissing Zitron’s numbers and analysis, you have a major critical thinking problem.

It always seems smart to be a contrarian/bear, but historically, betting against technology and technological progress is dumb.

Not only is he not a shareholder, but based on his opinions, he clearly isn't a user of modern models either. Somehow he still thinks they are party tricks and that "They will never be AGI," with no elaboration on _why_ they _can't_ be AGI, and why that actually matters for these companies (hint: it doesn't really matter much. As it turns out, you could replace a lot of humans with a modern LLM and have a reasonable comparative advantage in doing so, even though the models are ostensibly not "AGI.").

His predictions have also historically just been bad (https://danluu.com/zitron/). Even AI 2027, which is basically semi-fictional, is more accurate and worth paying more attention to than this guy. And the superforecaseters which actually made AI 2027 and actual futurists are generally higher signal.

It's not speculators, it's groups exporting to china where they're moving the chips to new cards for use in data centers. [0][1]

Probably related, china banned imports of the 5090d in may.

- https://videocardz.com/newz/heres-why-rtx-5090-costs-5000-ai...

- https://videocardz.com/newz/inside-chinas-mass-conversion-of...

No, it's not. GPUs deliver value, real value, compute is the new oil(tm).

But also, it is. You can resell them.

I find it mind boggling that either AI is a bubble or AI is the next industrial revolution and no other options can be considered because reasons(tm).

Token costs are dropping, yes they are, but how much of that is better software and algorithms vs better hardware and that's too galaxy brain for the simpletons trying to predict what's next.

So what's next? IMO more tokens and lots of disappointment that more tokens alone neither cures cancer nor brings the apocalypse and further waves of innovation. AI continues apace.

Apparently a good chunk of 5090s have had their chips ripped off to make frankencards for those who can't get DC cards.

The GPU poor have zero access to the datacenter cards. But they can make some of it up in volume with multiple consumer cards because NUMA.

Think of it more in terms of market cap. Google is worth 4.3 trillion dollars. They're spending on AI to protect that and others are spending on AI in the hopes of becoming that. The golden goose is serving ads and the fight is over who gets to do that.

It matters if the debt they're attempting to originate doesn't math at elevated interest rates. For a personal example, how long can you last maxing out your credit cards at 20-30% interest on your wage income? Your earnings will support the debt load until the debt spiral eventually races ahead of your earnings.

In this context, debt load and interest costs continue to increase due to bond market fundamentals while earnings are not.

Bloomberg: It Won’t Take Much to Burst the Stock Market Bubble - https://www.bloomberg.com/opinion/articles/2026-08-20/us-sto... | https://archive.today/O9sQE - August 20th, 2026

> First, the favorable impact of the artificial intelligence investment boom on economic activity and earnings will likely diminish significantly in 2027. That’s because what’s relevant for growth is how much investment is increasing, not its level. The increase in investment in 2026 will almost certainly be the peak. There aren’t sufficient resources — construction workers, electrical generation capacity, or chip manufacturing capacity - to increase investment by the same magnitude in 2027. Nor are the dominant hyperscalers likely to have the free cash flow and balance sheet capacity to sustain a bigger increase in investment in 2027 compared with 2026.

> Second, as the growth of investment spending slows, the growth in earnings of hyperscaler suppliers will falter, profit expectations will diminish and price-earnings ratios will shrink. The “picks and shovels” providers will suffer a double whammy - slower demand growth and profit margin compression. On the way up, higher demand leads to wider profit margins that sustain equity market valuations. On the way down, the outlook for earnings deteriorates quickly as the shortfall of demand relative to expectations is exacerbated by a collapse in profit margins.

> Third, as the investment cycle matures, the focus will shift to the returns that the hyperscalers are expected to earn on their massive investments. I suspect it will be difficult for the AI hyperscalers to generate sufficient revenue ($2 trillion or more per year) to generate the returns needed to justify an AI capital base that is likely to reach $5 trillion.

(I'd encourage you to read the entire piece, it was written by Bill Dudley, a former president of the Federal Reserve Bank of New York, and is too much to quote in its entirety)

Raising rates will have one main effect. Raising prices.

Most of the drivers right now of inflation are in-elastic demand. Raising the cost of borrowing, will not deter that spend.

What it will do, is actually drive up the cost of all business, and worsen employment simultaneously. You can typically see a rise in prices (inflation) following a rate hike. Even when it's needed to combat regular elastic demand side inflation, it takes time to have a positive effect. If the main driver of the inflation is inelastic, or rate insensitive as much of the driving force right now is, hiking rates will actually increase inflation.

The AI boom doesn't care what rate it has to pay, it will pay it, and keep driving things up.

What's needed is a significant policy shift, to make room in the markets again for things society needs financing for (ex. building homes, productive revenue generating businesses)

The way I see it it's the other way around, rates need to be raised to adjust to the situation. If the actual yield of treasuries is higher than the rates set by the fed due to AI bonds flooding the market and investors requiring more pay from countries running a 5% deficit While in a boom cycle AND strong economy AND high inflation both with and without energy and food in the accounting then the fed just has to hike to not lose their credibility.

Now, I don't expect them to hike too much beyond what the markets price 1-2yr bonds at, that would, like you say do nothing as a lot of inflation comes from the oil disruption.

Never comes back for various reasons (structural demographics and savings glut having been drained, broadly speaking). Easy to see this based on forward curves of various sovereign debt durations.

https://www.ustreasuryyieldcurve.com/

From a Savings Glut to a Savings Shortage - https://www.apollo.com/wealth/insights-news/insights/daily-s... - September 12th, 2026

Not investing advice, but you're potentially better off paying more towards the principal with excess cashflow versus waiting for lower rates that are unlikely to arrive.

https://www.hsh.com/prepayment-refinance-calculator.html

Great comment. Additional downstream impact is that those who feel wealth ("wealth effect" [1]) from an inflated SP500 will no longer feel as wealthy and will reduce spend accordingly when a correction occurs, further slowing an economy at stall speed without AI capital investment.

[1] https://en.wikipedia.org/wiki/Wealth_effect

I agree, but also the housing market is already pretty dead because current owners have very low rates on their mortgages.

> Rhymes with "1800s railroads".

If you had to redo one of the most expensive parts of laying all that track in order to use it, yeah.

Hardware that's specialized for building LLMs or for running LLMs isn't same sort of hardware you'd use to -say- serve up newegg.com.

I knew of the "Great Depression" but you made me learn much more interesting detail

* https://en.wikipedia.org/wiki/Panic_of_1873#Factors

It is possible I was being too subtle. If the management and owners truly do believe that AI is the beginning of the end of the current ecosystem, then change in rates won't change that much, because it will be pushed through regardless.