Baldur Bjarnason“Opinion | I Predicted the 2008 Financial Crisis. What Is Coming May Be Worse. - The New York Times”
If anything, this downplays the risks as it seems to assume that there has to be something to "AI" to warrant calling it a "boom".
Open Risk@baldur He mentions the extreme market concentration in US bigtech but doesn't seem to specify some causal chain that could precipitate a financial crisis as a result. The link to private credit has been examined in some depth (I believe it was FT's Alphaville) and was not deemed sizeable enough to become a systemic risk.
One scenario that could bring the house of cards down is changing political winds. Bigtech enjoys total monopoly valuations. Outside the US this status may not persist forever
The private credit discussion
https://www.ft.com/content/742edb09-a856-41ad-aea6-207862cfd952
@openrisk Big tech has other risks than private credit. The “AI” promise is largely bullshit. Costs are much too high. Much of their business comes from their own investment (I.e. they invest in cos that then buy cloud services/hosting). Their stocks are overvalued. Much of their income are monopoly/oligopoly rents dependent on government inaction worldwide. Code quality is in a decline.
Etc etc.
@baldur all true, but they have incredible staying power due to monopoly status. E.g., Meta burned vast billions on VR with nothing to show for it, would have bankrupted a normal company but they simply shrugged and moved on to spending billions on "AI". Their insane valuations also reflect this extraordinary chokehold on basically a large fraction of the world economy.
@openrisk The big tech cos were heading towards a stock price correction before they inflated the "AI" bubble with false promises and nonsense.
And much of their revenue comes from other tech cos. So if the sector is hit hard by a bubble pop, their cloud services will get hit hard as well.
Add to that current politics giving the entire world massive incentives towards getting off US software.
Basically, they probably won't go bankrupt, but their stock price and finances might take a big hit
@baldur the weak link for a bankruptcy was Twitter but with all manners of financial engineering shenanigans, first shoving it into xAI, then both of them into SpaceX (considered too critical for the US to let it fail), that fate seems to have been averted.
It's a grotesque timeline, but how it all will unfold is anybody's guess. Imho the world should seriously commit building alternatives. Banish the TINA argument...