All of that seems too neat to me. My simple view is the AI hype is a massive bubble, unlike anything seen before, with most assets pushed higher by unhinged deficit spending by the Government, corporations, and individuals.
I'm of two minds on AI. There is hype and irrational exuberance, so at some point this thing will grow too big and pop. But at the same time, AI represents a step change in society, much like the early development and adoption of the internet, and the attendant dot-com boom and bust. I've written before that I'm convinced this thing will burst, but I have no idea how long it will run first. Could be months, could be years. I'm inclined to believe there are 2 to 5 years left in this AI bull before the top blows off, but I'm reminded how I felt just before the dot-com crash. I foresee a white knuckle ride that will be very rewarding for many people, and disastrous for many others. At some point...
Is there a chance that AI has.... wait for it.... a 'soft landing'?
Could it just start cooling somewhat, slowing it's rate of growth, correcting gradually?
Excuse my bluntness, but I don't think we have any idea how this will play out.
Something as relatively simple like whether or not we were going into recession within the coming months was massively wrong, against virtually all predictions. Remember? Agip and his reports every day how the analysts were WRONG.
I think the fear of bubble bursting, though, is a good thing and the caution is warranted. I just am not willing to commit how it will ultimately play out.
Dariocpx, and probably you as well, doesn't understand cash flow. I can find my own reasons for why a stock or the market is over priced. I don't need some idiot like Dariocpx. Just look at his example, from Q ending 1/26/25 to Q ending 7/27/25 cash on hand increased over$3 billion. NVDA increased US Treasuries and corporate bond holdings over $10 and a half billion. Yet they spent over $27 billion on buybacks, dividends, etc during this time period! Also spent almost $4.8 billion on capex, acquisitions, and purchases of non-marketable securities. They didn't issue any debt.
For me, what stands out and is very concerning, NVDA has a profit margin of over 50%. Is this sustainable? If it is, what are the implications for a market economy going forward. There are political considerations to this as well.
The thing all you 'AI bubble' folk might be missing is that every new worker replaced by AI means that OpenAI or whoever, and usually Nvidia as well, effectively gets a share of the salary that was being paid to that person. Massive future revenue is not even dependent on AGI being reached. Even if AI doesn't progress much, people will figure out how to automate millions of jobs with it. If AGI is reached, there's nothing to stop the big AI companies (or maybe even just one of them who got their first) from spinning off their own companies that would dominate each sector.
Ok, so I gather you are saying that AI results in the replacement of workers, and if fully realized, may even result in replacing their companies as well.
What do you think we should be doing about that?
Make sure we provide more free stuff for people. No need for anyone to work anymore. I see no downside to society. Fat happy, alcohol, and drug induced stupor. :-)