Link: https://www.theregister.com/ai-and-ml/2026/10/13/ai-bubble-could-burst-and-take-global-economy-with-it-imf-warns/5302781

AI investment has helped keep markets and economic growth ticking along, but the IMF fears the boom could quickly turn to bust if the promised profits fail to materialize. With tech giants borrowing billions and investors piling into the same handful of companies, a selloff could leave more than just Silicon Valley nursing a hangover.

let it pop https://www.youtube.com/watch?v=3zUUtf7gOe8

don't stop, i'm so close

In some stock markets, the October Effect (also referred to as the Mark Twain effect) is the phenomenon of stock returns in October being lower than in other months.

It won’t. Bubbles don’t burst.

If so, the technobros did this. The technobros should receive most of the consequences. There should be dire consequences but we all know who will receive most of that. The system is broken.

in a sane world. in this world, where the system is working as intended, tech bros will reap rewards at our expense. hopefully the working class response will be of a scale commensurate with the scale of the injustice.

If profits are what will make it fail. It is going to fail. They need everyone to subscribe to their premium tiers at this point.

I'll stand with you! ✊

Let's hope so!

"Greedy shitbag tech bros pushed it. Greedy shitbag investors threw every penny at it. So whoops, the whole world is held hostage. Sorry fuckos, you, John and Jane public, are going to pay to save the global economy. Greedy fucksticks aren't allowed to lose."

...can't wait.

Remembet that they don't have the money to do it. It's also investors to blame.

That would be awful, we must save them and give all our money to their wonderful project. We will sacrifice ourselves and live in the woods while they improve their drunk chatbot that should cure cancer any minute now.

Oh absolutely, investors doing no due diligence on their part is complicity.

The economy as it stands is a house of cards built on promises no one keeps but enough people believe.

I have never claimed to be an expert on anything but the moment you let the fate of something rest on the guess of how much it will cost if everything goes the way you think it will, when the other half of the room hope it goes the other way seems mad.

Wouldn’t matter. The cost to execute the tokens is greater than the subscription. It’s all VC funds that they’re burning every day. It’s inevitable to fail unless they can convince every day users to pay $2k a month

API costs start to approach the operating costs of these systems. The ultra premium subscription tiers still lose money.

Tech has high market value because there’s the potential for growth, and the cost to grow is minimal after the initial startup costs. Adding a subscriber to a newspaper costs, say $0.20 for each subscriber; adding a Facebook user has a cost approaching zero as the user count grows. The problem with GenAI is that the inference cost grows linearly with usage, and the constant creation of new models means the training costs are also not recouped.

The debt the datacenter builders are taking on are being traded as junk with high interest rates already, and they’re going higher. They’ll never generate the income that the rates demand much less recoup the cost of building.

I'd pay them 2k a month for every month they pay me 10k for. Ofc I need to be paid first because otherwise I won't have the money to pay them and still comfortably live.

If the thing we call an economy no longer becomes sustainable, maybe going to QUD mechanics of trade or going back to bartering might become a thing.

The problem with GenAI is that the inference cost grows linearly with usage, and the constant creation of new models means the training costs are also not recouped.

probably even slightly more than linear at this point as they use up so much electricity and other resources that it becomes more and more expensive to serve more users. User 1 is easy, that's just the existing data center. User 1 million, well, you need a new datacenter and drive up hardware prices, but it's fine. User 10 million, you need to build/rent gas power plants, figure out where to get water from, RAM and everything costs 5 times as much as it used to, bribe local politicians to build despite backlash etc.

Good

Burn it all down!!! Shits not sustainable nor stable for 90% of the world population!!! Burn it all down, tech dweebs!

No that’s kinda the point. If AI charged for actual cost, no one could afford it. It’s all subsidized now. Basically a money shredder

I know, I was making fun of them by suggesting a "give me your money and then I'll give you some of my money"-circlejerk because that can never be sustainable in the long run.

Could????

🤞🤞🤞

Buffett Index: total stock valuation vs. GDP

1928: 130%

2007: 130%

2025: 220%

Now guess where most of that stock growth and GDP came from? I'll give ya three guesses, but you're only going to need one.

Good.

unexpectedly good churro sales?

Find out by tuning into the next season of The Economy!

QUD

Live and drink, friend!

if the promised profits fail to materialize.

What profits? Nobody has money to spend and llm companies lose money on $200/mo subscriptions.

Yeah, well I warned them, but did they listen?

The Legend of the Whopperito™?

TBH I don't see how it could take anything with it. The money invested will still exist except for interest on loans and unrealized gains which don't actually exist because of overvaluation.

This isnt like the mortgage crisis. Anybody who gets fucked over by this crash deserves it.

In fact, the longer this is allowed to go on without crashing the more money people like Jason Huang siphons from pensions.

/s mandatory

Then we riot.

COVID took the global economy with it.

Losing AI would be like... I don't even know, insignificantly small compared to that.

If AI up and disappeared tomorrow when I clocked into work, it might actually make my job easier. I could be even more productive without having the slop floodgates open every day.

Sorry. The techbros will get bailouts. Its the pensioners that will starve.

2 exceptions to what you said.

1. Whatever money raised through IPOs and other public investment is mostly the general public's saving accounts. So far it's just $80bn in the SpaceX IPO and $40bn from the bond issue they did shortly after.
2. Just like the mortgage crisis it's the banks holding the debt that's been issued. Now since 2008 they were meant to firewall between their retail banking arms and their investment arms so that if they fucked up again the retail banks were safe. However this legislation got repealed in the US, so we could be looking at a bank bailout again to make sure the banking system doesn't collapse with everybody's money in it.

The money loaned still exists, you're right. Trouble is it's not in the AI companies anymore. It's been spent. It's gone through them out to other companies (like Nvidia, MS Azure, AWS, Google Cloud, etc).

Yeah the "business" tycoons do that every decade or so. Some busts are bigger than others. Not much any of us can do about it unless we tax the hell out of corps and wealthy so that they can't build enough self serving shit to then dump the economy once they've scraped as much money as they can in the current cycle.

*Techbros

I'm convinced at this point the goal is to just not use money. Why do we have to be tied to this shitty fiat currency that isn't directly tied to physical worth?

The economy isnt going anywhere its just going into a recession again, nothing you havent seen before if you were born before the Bush administration.

thats rich coming from the IMF.

DUH. The Great Depression of 1929, and it took the world economy, and it fomented into World War.

I can't believe it's not salsa?

No shit, Sherlock!

you will have to dish out those consequences otherwise it won't happen.

The whole AI bubble is just one big bet: "AGI is around the corner and will replace all white collar jobs"

Now, LLMs get slowly better but aren't AGI and it's unclear if our current approach is even capable of reaching AGI.

Sadly the US went 'all-in' on the bet and everyone except the ultra rich will feel the pain.

It’s not just sustainability. Dicks who think they can rule the world need a reminder of thier mortality.