Especially since ai is just treated as outsourcing 2.0
Comment on A tangled web of deals stokes AI bubble fears in Silicon Valley
sanpo@sopuli.xyz 13 hours agoCountries? Don’t be ridiculous.
And any company that made itself so dependent on unproven bullshit kinda deserves it.
teawrecks@sopuli.xyz 8 hours ago
The Mag7 are the 7 giant tech companies currently propped up by the AI bubble. These companies represent upwards of 34% of the marketcap of the S&P500. The other 493 companies are also intimately tied to the success of AI and/or the Mag7. Not just everyone’s retirement accounts, but a huge amount of the world is invested in the US S&P500 thinking they’re diversified across 500 successful companies.
So to be clear, yes, we’re absolutely poised for a worldwide economic recession. I wouldn’t be surprised if smaller nations who rely on USD are completely bankrupted, but one thing is for certain: when AI pops, the fallout will not be limited to the US.
HK65@sopuli.xyz 13 hours ago
Companies, totally.
The only country it might take down is actually the US, as it might be the spark to start some shit in the current tense environment. I mean that I could see the bubble pop be Franz Ferdinand to a 2 Civil 2 War.
megopie@beehaw.org 8 hours ago
I mean, given that 1/3rd of the s&P 500s value is in 7 companies who are all heavily invested in AI compute.
I’m sure that the 10% wealthiest who’s consumption makes up over half of consumer spending won’t drastically cut back their spending if they lose a third of their wealth that’s in index funds.
And I’m sure private equity firms that are also heavily invested won’t start trying to liquidate their other assets at the same time.
No way this could see a massive decrease in consumer spending.
teawrecks@sopuli.xyz 8 hours ago
The mag 7 is 1/3 of the S&P500, but that doesn’t mean the loss will be limited to 1/3. A those other companies are also dependent on AI and the success of those 7.
megopie@beehaw.org 6 hours ago
They’re dependent on it indirectly. Like, most of the rest of the economic growth that has gone on in recent years has been from the wealthiest 10% of Americans increasing their consumption of various goods, or continuing consumption even as prices rise while wages stay stagnant.
That 10% has felt comfortable spending money due to the value of their assets growing, being able to liquidate some here and there or using them as collateral for loans.
If they lose a significant portion of 1/3rd of their assets in stock, and no other investments are showing rapid growth, they’ll probably pull back on their spending, which will in turn hurt the rest of the market. That won’t be as quick as the panic around “AI” companies, nor as disastrous.
It will be a slow thing, as companies that have moved towards the high margin premium side of the market see sales dry up on their most profitable products.