The entire US economy is currently being propped up by growth in the AI/tech sector. And I am convinced that LLMs are fundamentally incapable of delivering on the promises being made by the AI CEOs. That means there is a massive bubble that will eventually burst, probably taking the whole US economy with it.
Let’s say, for sake of argument, that I am a typical American. I work a job for a wage, but I’m mostly living paycheck to paycheck. I have maybe a little savings, and a retirement account with a little bit in it, but certainly not enough that I can retire anytime in the near future.
To what extent is it possible for someone like me, who doesn’t buy into the AI hype, to insulate themselves from the negative impact of the eventual collapse?
I do wonder…
With most economic crashes, the rich get even richer. This time it’s different, though.
Right now, the top 8 richest men in the world have as much wealth as the bottom 50%. Homelessness world wide is at an all time high, and a huge swath of people can’t afford all the basic necessities anymore.
If an economic crash happens now, will the 99% of the people finally wake up and just TAKE the resources from that 1%, like it or not?
What do billionaires think will happen to them once shit really hits the fan?
They all have been building bunkers.
they would have to staff them, and pay them, i doubt they thought that through. thats probably why alot of them are into trafficking.
What do you think would happen to billionaires in that scenario? The richest people in the world, who all own their own islands and mega yachts and can easily pay anyone enough money to do whatever they want?
No one is “taking” what they want from them lol.
This time it’s different, though
How? How is this fantasised about economic crash different?
When you have 10000 people to 1, a lot can be accomplished with some organization. You don’t have to get to them on their islands if you take back the mainland. Cut them off. Eventually they’ll run out of supplies, and since they’re used to getting whatever they want whenever they want, they’ll run out of something they’re accustomed to getting within days.
You act like billionaires are some smooth brained Neanderthals who will lose their mind in a few days if they can’t get their favourite smoothy lol
Wen you’re accustomed to privilege equality feels like oppression. And that’s just for us regular folk. These people live a life of luxury we’ll never understand, and they never get told ‘no’. So yeah, as dumb as it sounds, when you’ve lived a life getting everything you ever want finding out you can’t have that smoothie can have an effect.
I’m not saying that first smoothie would be the trigger point, but the idea is lack of access. Cut off the new sewage drainage from billionaire island. Cut off deliveries of any kind. They’re used to lobster and caviar at the snap of a finger. Kraft Dinner will be unacceptable. Lock them in their utopias and see how long they last.
How long until their smart homes break down and they can’t bring in IT to fix it? These things can absolutely have an effect.
You’ve got absolutely no idea how the real world works lol. This reads like some fanfic erotica for people who hate billionaires.
In a world like you’re talking about everyone would be out for themselves, not just billionaires, and at that point billionaires will have even more power because they could pay people to shoot-on-sight anyone that comes near their property, and they could just seize the means of production of whatever they wanted to. They can afford to buy whoever they need to, to get whatever they need to.
This entire conversation is based on what the op asked. Would the 99% take what the 1% has. You suggested they couldn’t take it, I suggested they wouldn’t have to they could just cut them off. The entire premise is based on the 99% standing up and uniting. It was an interesting question dude, no need to be insulting.
And I’m saying they couldn’t just cut them off lol.
This time it’s different, though.
Why?
Homelessness world wide is at an all time high, and a huge swath of people can’t afford all the basic necessities anymore.
I highly doubt your homelessness stat. If it is at an all time high by any metric, it is almost certainly a statistical artifact from (1) increased homelessness in developed nations, where tracking is decent and (2) improved tracking in developing nations. Meanwhile the people who can’t afford “basic necessities” are, again, in developed nations - places where the notion of what constitutes basic necessities would be considered grand opulance in many parts of developing nations.
Instead, the majority of people in the world have seen improvements to their quality of life over the past 20, 40, and 60 years. Improved water and sanitation systems, more robust and resiliant food systems, greater access to life saving medical care, huge drops in infant mortality, hugely increased access to technology and education.
If an economic crash happens now, will the 99% of the people finally wake up and just TAKE the resources from that 1%, like it or not?
This is, quite frankly, a ridiculous fantasy. The wealth of the top 1% primarily exists not in vaults of gold bars, but in the ownership of what are intangible human constructs. Particular segments of land (lines on a map); businesses (organized structures of people); intellectual property (literally just ideas).
Elon Musk, for example, has a large portion of his wealth in Tesla. Of course, Tesla has physical assets in its factories and such. But most of the value of the company is speculative - people expecting Tesla to be wildly successful in the future. The next part of its value comes from IP - the exclusive ownership of its various inventions and innovations. And another part comes from the organizational structure itself and the knowledge and intelligence of the individuals who make up that structure. At its root, the value of Tesla is the goose that lays the golden eggs (Musk’s cult of personality and the expertise of the individuals that make up the business) and investor confidence that the goose will continue laying golden eggs. In your glorious revolution, presumably Musk will be beheaded, and all the Tesla employees will scatter to the far winds as the proletariat storms their offices. Without the stable interaction of these technical experts, no more innovation happens, and investor confidence dries up (assuming the investors weren’t also beheaded). The wealth of Tesla, then, does not go to the people, but goes up in smoke.
A revolution premised purely on taking assets from the rich has a predictable ending: in the slim chance that the revolution succeeds, even if the tangible wealth is equally distributed to the people (also a slim chance), the engine that generated that wealth has been destroyed and, deprived of the ability to generate new wealth, the people eventually spend away their windfall and are left with less than they had before they started. This sort of phenomenon was literally the impetus for Adam Smith to write The Wealth of Nations. Spain had spent a couple centuries robbing the Americas of its gold via murder and slavery - enough to literally collapse the price of gold in Europe. And yet, during Smith’s time, Spain was in dire financial straights while England was the world’s predominant economic power. Why? Because England had invested in technology and had developed industrial factories. It had invested in public and private institutions (ie, structures of people) that would continuously generate new wealth, rather than relying on hoarding gold bars.
The “glorious revolution” fantasy, meanwhile, is largely counterproductive to the actual goal of improving normal people’s lives and improving the equality of political and economic power, because it plays into the childish notion that if we just throw a big enough temper tantrum, then we will get our way. And maybe that might be true for a brief moment. It is certainly true for some children some of the time that if they yell and scream and cry enough, they will be given the ice cream they want. But they only get that ice cream because there is an adult there, listening to them cry, who has a job that makes money that they can then use to buy the ice cream. The problem is that, ice cream or not, at the end of the day the child is still a child, completely dependent on the adult to provide for all their needs and make all their important descisions. The child gains real autonomy in their lives not when they throw “The Glorious Temper Tantrum” - they gain it when they get a job outside the purview of their caregivers and are able to spend the money they make at that job on the things of their own choosing.
So, too, with average people growing out of the controlling influence of the political and economic elite. Independence is achieved via building things - communities, relationships, physical infrastructure, businesses, governments, unions - which can be relied on instead of the options presented to us by the elites. And building things takes time and effort. It doesn’t happen overnight with a few molotovs and a good photo op - that’s the narrative the elites want you to believe, the one they put in all the popular movies and tv shows, because it is the strategy that is absolutely sure to fail. The idea that The Great Battle will be followed by Happily Ever After serves the elites because it tells us that we will win when we just put in a reasonable amount of effort right at the very last moment, and then we can relax. This is not how the world works. No - the world gets better when people put in unreasonable amounts of effort right now to gradually improve things and build things bit by bit, and keep putting in that effort for years and years and years. Sure, maybe there will someday be a tipping point or a big marker in history that we can point to and say “ah, that’s when things changed”. But make no mistake - that moment can only happen, and will only lead to a better world after the fact, because of the long term, boring hard work of people who care more about building things to help their friends than destroying things to hurt their enemies.
they will think it will be safe to flee to thier bunkers or compounds, in other countries, but they dont have the forethought of having staff they need to pay , or even services like waste removal down.
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Weird question. Not clear anything you can do.
First, AI bubble means datacenter bubble. Nvidida, AMD, TSMC, Chinese equivalents will do fine, as they have options to make products for non datacenter use.
Scenarios:
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No mass corporate uptake for datacenters, or requirement to encrypt upload/download traffic to corporate owned models hosted by datacenters. Amazon/Google/MSFT can win relatively such a race if they allow private encrypted models instead of their own, and can buy distressed assets from failures. It just means slower than announced deployment rates, with only losers those datacenters who get married to losers.
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CPU enhanced AI (knowledge graphs) with/or smaller LLMs. Datacenters can still provide corporate users, but mix of regular and gpu datacenters, Datacenters can lose big if next big thing requires replacing hardware, and they were too early. Shift in winners and losers, but not an AI/datacenter bubble.
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Few of the announced datacenters are ever built, or 5 year+ delays. Public company investments will go down a little, but nothing catastrophic for big tech, who can make it up in other areas. Power company histeria is an associated bubble that does poorly. This is a very likely scenario.
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Datacenters are successful and aggressively built. No AI bubble, because government surveillance revenue is obtained, and heavy government use of LLMs to keep population pro Israel/oligarchy/militarism. A freedom and jobs bubble is not better than an AI bubble.
Meme stock mania means even the biggest losers can rebound strongly. An everyone else bubble happens whether or not AI datacenters are successful.
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Invest in Gold
You’re catching downvotes, but according to Google Trends, searches for “gold price” and “ai bubble” are positively correlated, and there’s plenty of historic precedent for people flocking to “safe haven” assets when the markets nosedive. Gold went up by 30% from Jan-Sep 2020 (COVID), and nearly doubled in value between 2007 and 2009 (housing crisis), although it did take a dip before rebounding during the dotcom bubble (2000-2003).
That said, I would recommend keeping a significant portion of your money in an HYSA as precious metals are subject to large fluctuations in price and markets don’t always behave rationally.
And I am convinced that LLMs are fundamentally incapable of delivering on the promises being made by the AI CEOs.
As a, uh, atypical American, and someone into the ML scene and previously employed in an LLM dev job… I agree.
I don’t think ML is going away, as what’s been made so far are niche tools in the same way a hammer is, but the level of hype and conning is literally criminal.
If you can shift stocks around, take them out of indexes and put the cash in crash-resilient stocks like Berkshire Hathaway (which somewhat famously/infamously saves cash to buy dips during crashes), or Walmart. I’m thinking on such a “Noah’s Ark” basket for myself.
I’m not knowledgeable enough to comment on bonds, gold, or whatever else your savings may be in. But don’t believe a word anyone says to you about crypto.
Start saving a bit extra too, if possible, as the crash may not come for some time. And you want to avoid selling invested savings when the markets at its lowest.
On the tech side, you can get more into self hosting to not be so dependent on Big Tech. You’re on the perfect site to learn that.
If you ask me, that even includes dabbling in open-weights ML stuff, as that might suddenly become a more marketable skill once all the OpenAI hype implodes, and companies sipping the Koolaid turn more practical/frugal.
Other than that… I dunno. Depends on your work and lifestyle, I suppose. I think this will be a bumpy ride no matter what we do.
As a security engineer, I implore anyone to have an LLM walk you through standing up an SIEM.
Like don’t get me wrong. They’re phenomenal. But they just aren’t capable of complex tasks yet.
The current architectures fundamentally aren’t capable of such complexity, no matter how big they get or what prompt wrappers they have.
There are some interesting, deeper innovations in papers, but the AI hyperscalers seem to have little awareness of them, and I’ve seen so many cool experiments just drift by with no further testing these past few years. Which, again, suggests whatever approach the purse holders are taking is not a “innovate our way to better complexity” one.
If you’re worried about any economic downturn, you can very well diversify into even larger economic areas if you’d so please. How you do so is of course up to your own discression, given you can look towards different sectors, vectors of investment, and even geographic areas.
How did you handle previous stock market crashes, and why do you expect this time to be different? I’m heavily invested in the market, yet I’m not losing any sleep over the possibility of a crash - meanwhile, people who don’t even seem to invest are the ones worrying about it. I can’t help but wonder why that is.
people who don’t even seem to invest are the ones worrying about it. I can’t help but wonder why that is.
If I had to guess it’s probably because those people, like OP and myself, have very limited funds so losing that investment is losing “everything” and putting them back to having nothing.
Having a very inadequate income makes losing your investments tremendously impactful as you know it will take many many many years just to get close to whatever level of investment you had before. We’re counting on years of growth to make it something worthwhile, but if we get kicked back to nothing then by the time we catch back up to where we were the amount of time left to invest and grow is so much shorter.
If you’re not invested in the stock market, you don’t lose anything when it crashes - and if you are invested, you only lose if you sell at a loss. I understand the anxiety around economic uncertainty after a crash, but I get the sense that many people don’t really understand how “losing one’s investments” actually works.
If someone is absolutely certain that a crash is coming, then now’s the perfect time to sell while we’re still at all-time highs - and buy the dip once the crash finally hits.
Of course a massive stock market collapse would affect regular non-investing Americans. When companies go out of business, when inflation kicks into high gear, that affects entire communities.
But exactly how, that’s the question. If you know the answer to how, then you can easily prepare for it. Still, pretending that it won’t hurt you because you’re poor seems to be at odds with the past.
They certainly do if they have to draw cash at a loss after they, say, lose a job from a crash. Or draw because of inflation like we’re at a huge risk of now.
Other times, it’s big funds (like retirement funds) folks are “automatically” invested in that make some bad forced decisions during a crash.
You’re right, there is an unfortunate tendency to panic withdraw during a crash (that’s the idea, right?), but it’s not always a choice.
Saving to invest is hard, sometimes. And finance knowledge/attention is finite. Some folks are at risk of drawing from investments after a crash.
And not everyone here was invested during the 2008 crash, and may have only experienced the ultra-bizzare COVID rebound.
I don’t mean to be rude, but there are a lot of legit reasons most of Lemmy is probably not into ultra long buy-and-hold investing.
I’m 54 and expect this to be the first depression of my life. It’ll be like nothing we’ve seen since October of 1929.
You would have been prime working age for 2008 financial collapse. Though not an economic depression it hit peoples retirements and work prospects like a hammer. And then what happened? If you stuck it out and didn’t paper hands you would be fine.
The Japanese stock market crash of 1987 only recovered in 2020. That’s over 30 years.
If that happened in the US, the average american who invested in the stock market and is relying on a 401k to retire would be screwed.
I would say Japan never recovered. The yen is weak, the cost of living is skyrocketing, and Japanese people have said in large-scale national polls that they struggle more to make ends meet than they ever have. Also, the rich are getting richer, and there are far fewer permanent jobs than there were two decades ago.
The main issue in Japan during the 90s was that the government refused to acknowledge the reality of the situation and let the market crash. Instead of allowing bankruptcies and bad loans to clear, they propped up banks and corporations for years - freezing growth and causing decades of deflation and stagnation. The real lesson from Japan isn’t about the crash itself, but about the response: avoiding short-term pain led to long-term paralysis.
If an AI bubble bursts, it would probably resemble the dot-com crash more than Japan’s experience. Central banks act much faster now, bad debt gets cleared out instead of buried, and the global economy isn’t built entirely on AI speculation. So even if valuations take a hard hit, a decades-long depression like Japan’s is very unlikely.
This is a great question, I’ll be watching the replies. I had a similar thought this morning as I was checking how my very humble ETF investments were looking, and I remembered that NVIDIA is a chunk of one of them…
I don’t have much disposable income to invest, but I like to put a little bit in non-fossil fuel ETFs, and I feel like they’ll get super risky once the bubble pops (which I agree, it will).
I’m also going to watch replies.
I have no advice but I’ve been thinking the same way. I like LLMs, I use LLMs, but the “shove an LLM into every product and call it more valuable” approach is not sustainable and it will fail. Hopefully not as a full on bubble collapsing economy thing, but it’s only a matter of time (I’d guess a year tops) until companies have to start admitting to losses and investors start retreating.
Hopefully someone with some decent economic knowledge will drop some advice, but frankly I doubt anyone can do much better than guess (or parrot old advice) what will be least impacted. Intuitively tech stocks are the ones that will be hurt, maybe it’s manufacturing stuff that will stay more stable, but it’s all such a complicated web of interdependency who knows.
It also depends what you mean by “hurt.”
Nvidia/AMD stocks, for example, are going to drop like meteors, but the physical companies themselves will be fine. They’re like the picks and shovels makers of the California Gold Rush; they’ve made their piles of cash and will go back to business as usual. Hence, I’m not selling my long-held AMD, even though I’m certainly not buying more. Yet.
And some totally unrelated companies may be disproportionately hurt by the pullback of a serious recession.
One comment I will make on LLMs specifically is it’s more of a “race to the bottom” than you’d think. Between sparsity research (with the recent MoE trend being a rather crude stopgap if you ask me), alternate attention schemes, finetuning advancements, computing shifts like BitNet all in the pipe, and all the open models from China and others, well…
The end point feels like local inference of specialized, freely licensed models. As useful, niche tools, not superintelligence.
They’re low power basically free, hence seemingly inevitable.
That’s utterly apocalyptic if you’re someone like Sam Altman or Jeff Bezos. OpenAI can’t make money off that, which is why they’re lobbying to kill it and preaching infinite scaling that won’t work.
So. I have been through the tech bubble and housing bubble and this got me to investigate the great depression and what I found is. No. I mean if your rich enough. Maybe. But things like real estate have reoccurring costs and things like gold you lose value in the buying in selling and its not liquid enough for you to deal with the economic situation you will have outside of investments. A normal person will have to use savings which include investments to get through it. Owning a home without a mortgage can be helpful unless you need to move for work. its complicated.
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Lots of reasonable personal advice here. I want to suggest some community driven ideas, though they’re less fleshed out than I’d like.
Look into community and common gardens (and if they don’t exist, start pushing for a local org to make such space). If you are renting, look into tenants unions (or consider organizing your own).
Invest some in food kitchens + homeless shelters now, while you’ve got something to share. Consider volunteering and becoming more familiar with the resources (you may not need it, but others could).
Consider broader political organizing. The people in power (even in local positions!) when the crisis hits will definitely matter. America gave big buy-outs to businesses during previous crashes; but it could payout to citizens just as easily. Lookup and start discussing policy solutions that could help insulate you and your community. Bring this up at a city council meeting. Write a county representative.
If you have a retirement account, it’s probably in some sort of stocks. Be aware of what those are. Consider including some non-American index funds that are not particularly tech heavy. S&P index funds are significantly exposed to AI-related tech companies, and their usual safety is currently questionable.
Not a useful answer, but a reinforcement of the problem.
Without data centers, GDP growth was 0.1% in the first half of 2025, Harvard economist says
That’s pretty horrific.
It’s also not completely fair, some of that money would have been spent elsewhere without datacenters. Investors still gonna invest.
But what if the net ROI on those data centers is massively below the working average cost of capital… what is stated above is still massively destructive to capital and economic activity
Oh yeah it’s definitely bad in the long run. I’m just saying that it isn’t fair to say that the economy wouldn’t be growing without these new datacenters.
Buy puts?
I would like to point out it’s only recent gdp growth being propped up by ai. It’s not like our entire economy relies on ai.
The seven primary companies that are trading around the same tens of billions of “investment” and “credits” are worth 34% of the S&P 500.
Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, Tesla.
All of them are betting HARD, because CEO types think they can be first to market with the singularity and win. (That may be oversimplifying a bit, but every one of these companies is run by Nazi collaborators. Make stupid calls, win shitty reputation.)
I completely agree with most everything you said, but I will note that Apple is an outlier in that they are not investing deeply into ai. They are a shit company, and Tim Cook is most definitely a Nazi collaborator, but they are not a crutch of this current bullshit market.
That’s fair. They’re behind, but definitely playing. “Apple Intelligence” has been around for a year, just badly under-developed.
Apple plans to ‘significantly’ grow AI investments, Cook says | TechCrunch
“We see AI as one of the most profound technologies of our lifetime. We are embedding it across our devices and platforms and across the company. We are also significantly growing our investments,” CEO Tim Cook said on the Q3 2025 earnings call with investors.
While true, those companies all have solid revenue streams that aren’t directly related to AI. If a bubble pops they’ll all suffer, but all of them were profitable before the AI boom and can survive without it. It’s very different from the dot bubble because that was driven by speculation and many companies weren’t making any profit back then.
