856
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 06 Nov 2025
856 points (100.0% liked)
Technology
82517 readers
4132 users here now
This is a most excellent place for technology news and articles.
Our Rules
- Follow the lemmy.world rules.
- Only tech related news or articles.
- Be excellent to each other!
- Mod approved content bots can post up to 10 articles per day.
- Threads asking for personal tech support may be deleted.
- Politics threads may be removed.
- No memes allowed as posts, OK to post as comments.
- Only approved bots from the list below, this includes using AI responses and summaries. To ask if your bot can be added please contact a mod.
- Check for duplicates before posting, duplicates may be removed
- Accounts 7 days and younger will have their posts automatically removed.
Approved Bots
founded 2 years ago
MODERATORS
The fact that he was even able to make that bet is incredible. How deluded do you have to be to think the AI bubble won't burst? Keeping it going will require in ever-increasing amounts of money to paper over the gaping chasms that keep cropping up, and eventually the amount of money necessary to keep it going will cease to be feasible. Then, after taking gullible investor for all of they've got, the whole thing will fall over in the world's most well deserved and predictable market crash.
The subprime mortgage collapse was inevitable only in hindsight, you had to have a good understanding of the market to see it in advance. To see the level of corruption and false promises that have to be made in order to make the mortgage bubble possible. But everyone can see the AI BS right out in the open, I'm not talking about the "how many Rs are in strawberry" questions either, I can sort of see why that's not really a fair question. I'm talking about the fact that every single business that has ever tried to replace its employees with AI, has always failed, and failed almost immediately. Even Amazon couldn't make it work.
I think the idea is that, whilst shorting, you get squeezed. The question is not 'if' but 'when' and if it takes too long and you're $1B deep you can lose your shirt
Yep. The market can stay irrational etc
The thing is though as long as it goes down that's usually all you need. You don't need a total collapse.
That's the thing though, options are generally relatively short in duration, with most being a few months. The longest options are around 1-2 years out.
Could AI stay keep its hype for 1-2 years? Probably. Will it? Who knows!
I assume he has enough funds to buffer and roll it forward if it takes longer than he thinks.
The question is, will he still see a profit if it takes 5-10 years? Will his investors stick with him even if he loses billions? They almost left in 2008, what if this takes longer than that?
If you're taking the contrarian stance in investing, you have to be right both about direction and timing, and timing the market is very hard if not impossible.
Yep, you can only do so much risk management and hedging, and only for so long. There comes a time when you have to cut it off but, you know, hubris
I think, AI quality aside, it's mostly a matter of timing - IMO the AI bubble is obviously going to pop, NVIDIA's market cap is now 16% of the entire US GDP and OpenAI is trying to IPO at a trillion dollars, which seem like ludicrous numbers to me. But I learned from the last few years that you can also never really underestimate society's ability to just say fuck it and kick the can even further down the road.
And of course, SOMETHING is going to have to be the final straw that brings it all down, and it could very well be this. But I also didn't think we'd get this far - the 2008 crisis didn't do it, COVID somehow didn't do it, but these things are are also all compounding as we don't deal with them properly. And if AI is going to be the last straw, how long can we put it off for? Could it pop next year or can we still hold it off for another decade with even more ludicrous number-fuckery? I think that's where the trick is going to be.
The market can remain irrational longer than you can remain solvent.
Uh oh, I can stay solvent for quite longer
The thing that boggles my mind in all of this is the possibility that Trump installs some absolute toady tool bag in at the Fed and then just has the federal reserve bail out all of the bad investments. It'd mean probably hyperinflation, but who cares about normal shmucks trying to live a life? It's much more important to pay the genius, scammy billionaires so they can keep their mega yachts fully gassed and assed.
I'm not so sure. I'm still friends with a guy who told me emphatically "you dont understand what we did, we destroyed the global economy" and then explained the whole subprime mortgage scam to me, back in like 2007. Lots of downstream businesses, new home builders, paint and drywall companies, building materials stores, started folding several months before the official crash as well. I wasn't nearly as aware of things then, I was a grown adult but not yet 30 and with little formal education, but there were definitely huge flashing signs. Only the media, based 100% on the words of the banks and insurance companies, thought that a crash was undetectable.
I'm not sure quite what it would look like yet, but I'm willing to bet if you look where these data centers are being built, when the cash runs out to keep the whole scam afloat, these big companies will stop paying their bills. The smaller companies providing services and supplies will run out of money before the huge mega corpos start showing signs, so that is one of the metrics I'm watching closely. I just happen to live in the shadow of these data centers so I'll be pretty close to it, that is if I'm right.
I remember the news reporting about record breaking amounts of mortgage defaults in like 2007 as well. The signs were all there, but people were too oblivious or high on their own supply of farts to see them.
Anytime people are like "we couldn't see this coming" I never understand why they are allowed to pass that obvious lie off in public.
The AI bubble signs are in plain view everywhere you look right now. If (or much more likely when) it bursts everyone will be talking about how they couldn't possibly see it coming again.
If people say they couldn't see this shit coming, maybe their myopic asses shouldn't be in charge of anything important ever again.
There was quite a lag between the variable-rate mortgage rates going up and everything noticeably exploding, so lots of people who were aware there was a real risk of things going tits up decided that it hadn't and therefore wasn't going to and had stopped looking for signs by the time they started to appear.
Rich dumbasses found a place to waste all their money instead of the government taxing them and using that money for important things. they let them waste it on some climate change accelerator
Nobody believes the AI investment/growth trajectory we have right now will continue for infinity. What nobody knows is: when the correction will occur.
This is the info/decisions you'd need as an average investor. What Burry is doing is the riskiest type of investments with shorting the market. If growth continue to occur he and his fund will have to pay for the growth to those whose shares he borrowed to short.
In summary, its not enough to know that a bubble exists, but to profit from it you have to figure out when it will burst and when the full burst is done.
Everyone can see it coming, but they believe the AI companies' hype that the AGI breakthrough will be here "soon". Which if actually true, might be worth the bet.
For my money they either hit AGI and then we all die, or there is a crash before that. Yay.