Mastodawn

Just like 2008 had "Subprime Mortgages (or "Dot Com" crash) that nobody understood, 2026 has "Circular AI Revenue" deals. Ex: Microsoft gives money to OpenAI, who gives it back to Microsoft for Azure credits, which Microsoft then reports as "AI Growth".

Microsoft and Nvidia fund AI startups that buy their own tech back to report "growth." With $600b burning in data centers in 2026 alone but no real revenue to back it up.

If that loop snaps, the "fuck up" will be massive.

nixCraft 🐧Feb 25

it is going to snap one way or other. that is all i'm saying.

Snuffleupadon Feb 25

@nixCraft not if but when. Even if "AI" somehow works out it will mean a huge shift in the workforce where there is NO plan in place. If it doesn't work out (which is more likely) then the government under Trump is 100% going to bail out these huge corporations. Everyone will simultaneously blame each other and claim they've done nothing wrong. There will certainly also be scapegoats. In either event, we all lose.

Adam MacLeod Feb 25

@nixCraft You're not wrong buddy. All economic data of situations that have developed like this points to an inevitable crash. Right now, its in the crackle phase. Things will then begin to snap, and then things will pop. Just like Rice Crispies, although, not exactly in the same order as Rice Crispies, LOL. The key is to be smart by diversifying, and remaining calm. Its the panic buying and firesales that bring down economies.

Ray McCarthy Feb 25

@adam @nixCraft Or a rubber band toy plane overwound.

bdf2121cc3334b35b6ecda66e471 Feb 25

@nixCraft they can only give away free hardware for so long

NoAIEver Feb 26

@nixCraft more like "crash and burn" 😁

Steve Downey Feb 25

@nixCraft
Collateralized Debt Obligations

DotCom was the 2001 crash just before and after 9/11.

Pseudo Nym Feb 25

Multi billion dollar game of "hot potato" or musical chairs.

Who is holding the debt when the music stops and they can't pass it on?

@pseudonym @nixCraft I would just look at any other Ponzi scheme.

Pseudo Nym Feb 25

@sraars @nixCraft

Not exactly.

Ponzi needs new suckers to buy out the previous generation. There is still a "holding the bag" when it stops problem.

But this one is circular. The same parties keep playing, due to the way the funds are accounted for.

Neo Ehproque Feb 25

@pseudonym @sraars @nixCraft more like a combination of game of chairs and Russian roulette. Pass the grenade?

Panic In The Darkroom Feb 25

@pseudonym @nixCraft oh don't worry, it's gonna be the CEOs and people who cooked it all up, I'm sure. No way that the general public is going to bail them out.

SirWumpus 👾🍁Feb 25

@nixCraft Looking forward to the snap, crackle, and pop when the AI bubble band collapse in on its own weight.

ROTOPE~1 ⭐️Feb 25

@nixCraft nah, this perpetual economic motion machine is gonna go to the moon forever

Quien Sabe Feb 25

@nixCraft Give me a 24 hour notice please! 😎

Chris Pitts Feb 25

@nixCraft “If”? 🤔 More like *when* it snaps.

The Incredible Laser Feb 25

@nixCraft oh, no worries, 2026 also has its own version of subprime loans, they're just called private credit now, but it's the same thing.

Sam Chavez (she/they/he) 🌈🤠Feb 25

@nixCraft
I call it the circlejerk economy

Bogdan Buduroiu Feb 25

@nixCraft what's gonna snap tho? The difference is that most AI spend right now comes from piles of cash big tech has, not debt.

@nixCraft * when

Illustrated at
https://bsky.app/profile/anthonycr.bsky.social/post/3lzj5pbfxxc2g?ref=wheresyoured.at
and discussed in more detail at
https://www.wheresyoured.at/the-case-against-generative-ai/#here’s-a-diagram-of-how-unbelievably-circular-all-the-money-in-ai-compute-has-become

(edit)

More discussion:
https://img1.wsimg.com/blobby/go/76c5f9c0-d1a4-4493-b204-bbbdd68fd910/downloads/89583079-d8c1-483f-8988-3c9f5d813d89/HoranAAJ2026LLMbubble.pdf?ver=1771954468213

anthony restaino (@anthonycr.bsky.social)

ah shit, I had swapped lambda and coreweave around to make the diagram more sane and forgot to move the super micro funding arrow from coreweave to lambda. fixed

Bluesky Social

Bret Mogilefsky Feb 26

@glc @nixCraft No need to complicate this.

(source unknown to me)

Nu Modular Feb 26

@mogul There seems to be a grave hole in your theory ;-)

chronic crashout dog [Viridi Vix]Feb 26

@mogul @glc @[email protected] if it's reported as GDP then someone's paying income tax on it... no thanks

Die Mad 🇨🇦Feb 26

@nixCraft Sometimes called “cheque kiting”. Write a cheque on Bank A, payable to your business. Deposit in Bank B. Next day, before the cheque has cleared inter-bank processing, write a cheque on Bank B for a like amount, deposit it in Bank C. Repeat with a cheque from Bank C to Bank A. Make the shuffle longer, you may be able to withdraw cash or pay third parties with funds that don’t exist. When a Bank finally catches on, apologize and say you will look into it.

diana 🏳️‍⚧️🦋🌱Feb 26

@bjornqc @nixCraft

Only billionaires are legally allowed the financial instruments of cheque kiting

Kurt Bearington Feb 26

@nixCraft love to read more about that 600 billion number you shared!

Sterling Feb 26

@nixCraft
It's all explained quite simply here:

https://www.youtube.com/shorts/pB7faDHkHJI

The Three Stooges of AI Finance

YouTube

@nixCraft this is now widely known for at least three months now? Where is the crash? There will be no crash until enough of "normal" peoples money is invested in it. If one man, fElon can keep the Tesla scam going for now over a decade, bunch of blue chip companies - it is not just two mentioned playing this game, along with vcs - will easily keep this charade until they want it to end.

contrasocial Feb 26

As long as we don't bail them out with tax dollars...we aren't going to bail them out....right?

@nixCraft not if, when.

Myza Nil Red Feb 26

@nixCraft "Expecting to grow to infinity, is like building a boat designed to sink."

theM0ntarCann0n Feb 26

@nixCraft The excrements are steadily progressing toward the propeller.

https://www.urbandictionary.com/define.php?term=shit+hits+the+fan

Urban Dictionary: shit hits the fan

The point at which "the shit hits the fan" is the point at which an already unstable situation devolves into utter chaos, often in spite of--or even due to--a higher authority's attempt to control it.

Urban Dictionary