bsmall2
> ... a key question is this: How much are businesses willing to pay for AI? Until recently, AI enthusiasts were touting the rapid growth in revenue. It seems a big factor in that growth was companies spending money on AI, even if they didn’t have a productive use for it, because they thought it meant their companies were at the cutting edge in technology.
> That sounds crazy, but even large companies can often do things that are pretty crazy, as noted above.
https://cepr.net/publications/ai-bubble-monitor/#june222026
#DeanBaker #AIBubble #CrazyCompanies #TechBubble #BubbleHistory
The AI Bubble Monitor

Is there an AI bubble? Some indicators point to one — and when bubbles burst, there can be massive shocks in housing and job markets that last for years.

CEPR
Jun 26 at 11:49pmWeb
Show threadbsmall21d ago
🧵
> ... there have been several reports in the media of companies “#TokenMaxxing,” where companies rewarded mid-level workers for using AI. This was not just small or midsize companies with poor management. Amazon, one of the largest companies in the world, had an AI leaderboard for their workers, where they could be rewarded for the amount of AI they used. Other companies were following similar practices... companies are... looking at their AI bills and deciding that it may not be the smartest.. to encourage employees to use AI as an end in itself.
Show threadbsmall21d ago
🧵
> ... If companies were just using AI to be cool, it is easy to go with the leading American companies, which would generally be Anthropic and OpenAI. The systems produced by these companies generally rank at or near the top by most measures.
> But they cost considerably more than the Chinese systems, the best of which are not far behind according to most ratings[...
#StatusSeekers #StatusSalami #SalamiAI
Show threadbsmall21d ago
🧵
> The Chinese AI also has the advantage that it is mostly open weight. This means that users can modify the models to better fit their needs. It also means that the systems can be downloaded and run on a company’s own computers. This allows companies to protect their data; they need not fear that they are handing it over to the Chinese government, although they may be handing it over to Elon Musk or Mark Zuckerberg with the US systems.
#ChineseAI #OpenWeight !?!?
#DataSoveriegnty
I bet it's still a waste of time, water, and energy.. #SalamiAI
Show threadbsmall21d ago

🧵
> Historically, stocks have given somewhere close to a 10 percent nominal return. (... expecting that return going forward.. doesn’t make sense, but most people invested in this market.. expect a return.. like that.) .. for a normal stock with real profits... putting money in #SpaceX .. betting on a company that is losing large amounts of money and run by a person with an affection for ketamine and neo-Nazi propaganda.. they expect a better return than.. 10 percent you can get from.. an airline or consumer products company.

https://cepr.net/publications/ai-bubble-monitor/#june152026

The AI Bubble Monitor

Is there an AI bubble? Some indicators point to one — and when bubbles burst, there can be massive shocks in housing and job markets that last for years.

CEPR
Show threadbsmall21d ago
🧵
> As a mature company.. say that in 2036... a price-to-earnings ratio of 20, still well above the long-term average for the stock market... it would have annual after-tax earnings of $680 billion. Is that plausible?
> The Congressional Budget Office (CBO) currently projects that, in the economy as a whole, after-tax corporate profits will be $4.1 trillion in 2036. That would mean that #SpaceX will have almost 17 percent of all after-tax corporate profits. That is several times larger than the share that any company has ever had.
#MrArithmetic
Show threadbsmall21d ago

🧵
> The current value of all corporate stock is close to $80 trillion, more than 2.5 times GDP.

If PE ratios fell back to their long-term average of just under 20, it would destroy close to $40 trillion in stock wealth, an average of almost $300,000 per household.

If the PE fell back to its long-term average, and the after-tax profit share of GDP also fell back toward their level of a quarter-century ago, then the loss of wealth would be even larger.
https://cepr.net/publications/ai-bubble-monitor/#june82026
#DeanBaker #PriceToEarnings #BubbleHistory

The AI Bubble Monitor

Is there an AI bubble? Some indicators point to one — and when bubbles burst, there can be massive shocks in housing and job markets that last for years.

CEPR
Show threadbsmall21d ago
🧵
> It is impossible to know the timing for when a bubble will collapse. A quarter of a century later, it is still not possible to identify any event that caused the 1990s tech bubble to collapse. It’s also not clear what caused the housing bubble to stop growing and start deflating.
> With that in mind, it is possible to track the bubble, looking at the growth in the prices of the most important stocks and changes in their PE. This is what the AI Bubble Monitor will do on a weekly basis.
#AIBubbleMonitor #SalamiBubble #BubbleSalamis #AIBubble