It’s Official, The AI Bubble Just Popped (Here’s Why)

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Cameron Long

Cameron Long

Cameron is a seasoned CFO and CPA with 31 years in finance. He created the AI Trader's Playbook to help everyday investors use AI to find high-confidence trades — in minutes, not hours.

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76 Comments

    1. META, Microsoft, Google, Anthropic, OpenAI have all lined up at the government/military contracting trough.

  1. Coming from the tech indusrty, you are spot on with your example. Cost versus performance gain is not linear, it’s exponential as you push the limits.

  2. The panic of 1873, which lasted for around 15 years, crashed jobs and commodity was caused by over investment in the leading technology of the day. Railroads

    1. @Woodsman50Sn railroads still carry a lot of freight in the US. They’re just not that popular for passenger travel.

  3. The interest rate death spiral exactly what’s happening with JGBs. BOJ wants banks and pensions to invest more locally, but because there is no certainty on rates, they don’t. Why commit a bunch of capital now when BOJ will probably just hike rates again. They dont want to reverse the carry trade but they also want institutions to commit capital but still be flexible to raise them again later. They can’t have it both ways.

    1. If I don’t have to deal with an incomprehensible accent from a call centre in India, sign me up.

    2. they are spending it on data centers and control grid infrastructure to enslave all of us.

    1. @s0l1dsnake AI hurts China more than anyone else. When your entire economy is based on cheap manufacturing using human labor, what happens when AI robotics replaces that cheap human labor. You can only build so many ghost cities to prop up your GDP. Eventually the chickens will come home to roost.

    2. @Chad_Max I listened to an analyst talk about the labor vs. tech issue in China. He explained that historically when China takes over a global market, like solar panels or EV’s, they throw labor and capital at it. With AI, they didn’t. They did the opposite. China released its LLM’s as open source to allow the rest of the world to leverage THEIR labor as well as THEIR data centers. Why? China stays competitive with AI without the capex. Think I’m nuts? Microsoft is trying to cut a deal with China to put DeepSeek into its LLM offerings because Microsoft realized its current business model is not sustainable.

    3. @robertm3730 I think the Chinese rather want a turmoil in the States, because the only thing that grows there are a handful of tech companies. Fits to their common tactic to blow other manufacturers out of the market by selling stuff they make barely any money with.

    4. @0TurboxAbsolutely true. China and USA are in a Cold War. Iran and Venezuela was never about drugs or nukes. The USA wants to control China’s oil access. But China already worked around the issue with massive oil reserves and 3x’s electricity power grid than USA years ago.

    1. So many people think they are investing when they are in full FOMO and are handing over their cash to hedge funds.

  4. Invest 10 trillion dollars to pit tens of millions of people out of work – that sounds like a great business model – could only be dreamed up by a CEO who hates having to deal with human employees

    1. if you would own a company, you would understand the pain employees can be, especially having thousands of them or hundreds of thousands.

    2. Financial education is what we need right now for more than 70% of the society in the country as very few are literate on the subject.

    3. Unfortunately, not all of us were financially literate early in life. I was 48 when I finally took the time to educate myself and start making real changes. At that point, I was $197,000 in debt with zero savings or retirement. Fast forward just two years-I’m now completely debt-free with a net worth of over $3M.That may not sound like a huge number to some, but to me, it’s something I’m incredibly proud of. I’m currently fast-tracking my wealth-building journey, already investing $550,000 and owing absolutely nothing to anyone.Since I joined this channel three year ago, my mindset and financial habits have transformed. It’s a good feeling. May God continue to bless you

    4. I’m so glad i got into investing five years back. Until now, it’s been going really well for me, and I’v made a lot of money along the way

  5. If you owe the bank $10,000 and you can’t pay you have a problem, if you owe the bank 100,000,000,000 and can’t pay the bank has a big problem.

    1. @antpoo • You’re GD right. That means those granting the bailouts are also a big problem. Its insane to me that the taxes coming out of people’s income goes to everything and everyone BUT the people paying(being robbed of) that money.

    2. If the bank lends ~ amount of fake fiat currency, the bank looses nothing! It’s just numbers on a screen computer!

    1. Major innovations often run ahead of reality. Whether this is a temporary reset or a deeper correction, a pullback doesn’t invalidate the long-term AI investment thesis.
      Companies that keep delivering earnings, cash flow, and real competitive advantages usually emerge stronger.

      That’s why I focus on fundamentals over headlines. System like (Midavest) fits that approach because staying adaptable and capitalizing on volatility matters more than predicting every turning point.
      Probably why it keeps resonating with investors.
      Markets will always remain a money den for those who know where to look.

    1. You’d need a lot of leverage and the Fed in a hiking phase. We’re not even close to that yet. These videos are cute to watch though.

  6. They all had massive war chests of cash built over the last 20 years & all of them hypnotized each other and lit their cash on fire.

    1. Except the part where all of their growth is accelerating for the first time in years. They can layoff employees, be more efficient, no more paid sick leave, employee compensation packages, no healthcare, no 401ks to fund, no more training, fighting to keep employees. All of which allows them to consolidate power. Or you could be right and ALL of the wealthiest smartest people in tech are wrong.
      I’ll think I’ll stay invested thanks.

    2. @doug6723 Well, a lot of those same smart people exit quietly while retail are the bag holders. Exhibit A: SPCX

    3. @kingdomh77 I’ve been in the markets for 30 years. I’ve done just fine thanks. But with your strong conviction please feel free to short Nvidia. You’ll be shining my shoes in a year.

    4. @doug672330 years experience but incredibly triggered – bro… cool off and live a bit longer.

  7. Most of these datacenter plans are being banned by local government anyway. When this bubble bursts it’ll be epic!

  8. So, they’re racing to put people out of work so they will not have anyone to sell to. That’s a great plan.

    1. A lion share of corporate sales is B2B, but you’re right in the sense mass unemployment is self defeating. But reducing OPEX is fundamental to all businesses, otherwise you will get eaten by the competition who will out price you.

    2. Dont be fooled. AI isn’t going to replace very many jobs. it will displace some jobs in the economy. WHY? because it’s not actually the AI they’ve been touting. Actually the LLMs they’ve developed aren’t AI at all. Everyone just calls them that. The users of AI at scale have failed to find ways for AI to actually produce any value in their companies. So it’s a huge amount of debt based on little or no value. It’s just a question of which company colapses first and gets absorbed cheap by the others that actually have legitimate products or services.

    3. It is soooo ironic, won’t pay a living wage but will spend 10 trillion dollar to try and replace minimum wage workers.

  9. IBM missed revenue by 20% because their customers (the same who would buy any AI) have run out of $ due to crazy inflation on hardware — caused by AI!

    1. Intel and AMD aren’t coking with gas either…only two companies NVIDIA and Micron are making money hand over fist

    2. I’ve seen enough technology cycles to know that major innovations often run ahead of reality. Whether this is a temporary reset or a deeper correction, a pullback doesn’t invalidate the long-term AI investment thesis.
      Companies that keep delivering earnings, cash flow, and real competitive advantages usually emerge stronger.

      That’s why I focus on fundamentals over headlines. System like (Midavest) fits that approach because staying adaptable and capitalizing on volatility matters more than predicting every turning point.
      Probably why it keeps resonating with investors.
      Markets will always remain a money den for those who know where to look.

  10. The Chinese are investing 1/10th the capital expenditure of the US tech companies and will be able to offer up AI services at a fraction of the price of Open AI and Anthropic.

  11. Heard about their exit strategy from ” Andrei Jikh ( channel ) titled: Your 401K Is Their Exit Strategy (SpaceX, Anthropic, OpenAI) ” where they all are going IPO route, as SpaceX has already, & the people through your retirement will pay for it, leaving us with nothing? We will see. Excellent break down by the way.

    1. If the AI trade unwinds sharply, the main lesson would be about concentration, not technology. Innovation won’t disappear just because valuations correct.
      The bigger risk is overreliance on a few dominant companies.

      That’s why I prefer a diversified port. built to handle different market environments, with smarter strategies like (Midavest) helping stay to positioned and adaptable when leadership rotates and volatility returns.
      Different approach, but it’s been working much better for me.
      Probably why it’s gaining attention lately.

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