This isn't a pyramid scheme, it's not even a pump-and-dump one. God only knows what it is. Describing the scam that is the AI bubble needs brand new words because nobody ever did something so outrageous in the past.
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Discussion
@gabrielesvelto Remember how they used to call it “The Great War”? Now we number it. My take is that we are getting the same thing with “The Great Depression”. I don’t like it:(
To be clear, I am *not* a macroeconomics expert, but my fear would be that this bubble could burst so violently that it starts bursting other smaller bubbles that generally tends to be around. Like housing/buildings, loans, various over consumption, etc.
@gabrielesvelto they've heard "circular economy" and treated it literally
@gabrielesvelto when/if this bubble pops, we better not bailout these douche bags out. If a bailout occurs, I hope all hell breaks out.
@Ox1de absolutely. They can bail out whatever they want as long as the money comes out of the pockets of their investors, not our state budgets.
@gabrielesvelto https://fortune.com/2025/10/07/data-centers-gdp-growth-zero-first-half-2025-jason-furman-harvard-economist/
Data centers and IT technologies represented 92% of US GDP growth in H1. This is getting scarier by the day.
I've been trying to detangle my savings from US economics, but the reality is that a bubble would kill all markets.
@gabrielesvelto you're over complicating it. It's very simple. It's a mechanism by which additional energy resources have been added to every click. Fossil fuel lobbies have subsidized shoehorning AI into everything to increase energy demand. As renewables become cheaper and more readily available, the "renewables can't keep up with demand" arguement was eroding fast. Artificial demand gives energy producers rain to raise prices. Even after the bubble busts prices will not go down
@bebadefabo I think it's more than that at this point. A lot of these paper contracts these companies are exchanging are being used as guarantees to raise money via loans, but some of these companies are already heavily indebted (including Oracle). They are devouring money so fast that they already burned through the capital they had raised last year, or just a few months back.
@gabrielesvelto exactly so they are accepting cash injections from fossil fuel companies to shoehorn unnecessary features into their product that have no substantial benefit to company or consumer. They serve only to increase energy expenditure and drive up the prices energy companies can charge, sighting "increased demand". The fund an increase in demand to reap the benefit across the board. ROIC. #LateStageCapitalism
@gabrielesvelto it's round-tripping & it's straight up fraud https://en.wikipedia.org/wiki/Round-tripping_(finance)
@gabrielesvelto It's fraud. If two shops kept making promises to buy each others' non-existing products & calling it revenue, investment, profit, valuation etc., that would be fraud - and this is exactly that.
I don't think we need to invent new words - I think we need to start calling things what they are.
- and yes, this would include finding out that a lot of what passes for trading & investment is also fraud. That's a feature, not a bug.
@gabrielesvelto It's starting to feel like a game of chicken... everybody is upping the ante, seeing just how high the stakes can get.. except whoever is the chicken and cashes out first wins..
@sol_hsa it's funny because the chicken will be responsible for the implosion
@gabrielesvelto Huang said. “My only regret is that they invited us to invest early on, and we were so poor that we didn’t invest when I should have given them all my money."
Ah yes this guy sounds like a sensible investor
@eniko yes, what these people are saying is insane. I think we're past the stage where we can call them devious con men, we're at the stage where they lied so much that they believe their own lies.
@gabrielesvelto In terms of impact, it reminds me of something like the Darien scheme in Scotland where something like 20% of all the money in Scotland got invested in an unworkable colony in Panama and people kept doubling down. When the enterprise finally went bust, taking all that money with it, it had massive repercussions and was a factor in Scotland's lords agreeing to the merger with England (a lot of them were broke).
@Infoseepage TIL! That's very interesting
@gabrielesvelto
I love how on the #HardFork podcast they referred to these financial shenanigans as the #Circularity
@mattjhayes oh, that's a very good pick!
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