Perhaps the danger of AI replacing thinking for people is more real than I realized. Not because AI is a new threat but because people do it already. They just outsource their thinking to influencers, talking heads, and pundits to begin with and AI is just another thing to parrot.
Politics is the best place to see this. If you get into a political discussion around certain topics with certain people it feels like they practiced, and it is because they have. They simply repeat the talking points they have heard elsewhere. Over and over and over again. The best way to defeat this is to ask for proof of their claims.
I am thinking about this because I woke up to more AI bubble talk and every day I am more and more confused as to how there is a bubble when everything is in the red, we’re in the middle of a three month correction, the market isn’t exploding upwards (inflating the bubble), and how none of this appears to be based on the reality of businesses.
The story goes that the biggest companies in the world are all spending their cash on companies destined to fail (OpenAI and Anthropic) and some companies are even going so far to help people buying from them secure financing. In response the market is acting with extreme caution and none of the shares of the top companies are going on any sort of run.
My two issues with this is that a bubble needs to be inflated. At this point Google, Amazon, Nvidia, and the other big companies are being priced as if this new potential source of revenue doesn’t exist. Look at Amazon. They had an amazing earnings, the stock exploded up, and since has fallen back nearly to where it began. All the recent positive earnings news is being squeezed back out.
Yet all the talk around the market is that it is a bubble, and people are really committed to this idea. They can’t be shaken of it and the market is reacting to it and pricing everything as if there is a bubble which is creating the opposite.
Now this set-up could lead to a bubble and perhaps an even worse one. Let’s say negotiations resume with Iran, there is no rate hike in September, and we get through the midterms. The spring uncoils and stocks suddenly explode with euphoria. Since the blowing up of the bubble was delayed it blows even bigger. Few people prepare for what is coming and it bursts even worse than it would have before.
That is only one scenario. There are millions of them, but right now I cannot imagine one where this is the bubble. Where we have reached the peak and it is going to burst from here. The market right now is more like a discarded wad of chewing gum than a bubble.
David Huzzard Writes 