How the AI bubble could pop and take down the global economy, according to the BIS

The central bank for central banks is concerned about the eye-watering sums being invested into AI, and it's raising the specter of a global recession should the bubble burst. In its annual report for 2026, the Bank for International Settlements compared the current craze to historical events, including canal and British …

[Paul Herber]

My AI fiendfriend recommends I buy into the Dutch tulip market ...

[jake]

For those who don't understand the reference, there was a tulip boom in the mid-1630s. Millions of people lost everything when the market crashed. The canonical work on such fraud is Charles Mackay's "Memoirs of Extraordinary Popular Delusions" from 1841.

The 1852 reprint, now titled "Memoirs of Extraordinary Popular Delusions and the Madness of Crowds" is available on Project Gutenberg. It is well worth a read.

https://www.gutenberg.org/files/24518/24518-h/24518-h.htm

The syntax of the mid-1800s can be headache inducing for some, but if you persevere you'll probably be better off. Learn history, or be doomed to repeat it.

[Pete 2]

> Millions of people lost everything when the market crashed

Ummm, really? A quick question to Google suggests that only a few dozen people invested large sums in tulip bulbs and that the effect on the Dutch economy was negligible.

Reference: BBC: The truth about Tulip Mania

[Gary Stewart]

OK, how about the much more recent US housing and dot com bubbles?

[Richard 15]

Dot Com is a good example.

[werdsmith]

Railway Mania of the 1840s.

[drankinatty]

That’s the way the money goes – Pop! Goes the weasel.

(unfortunately, this one may hurt)

[TimMaher]

City Road

In and out of The Eagle.

At least you can get drunk.

[TimMaher]

Hunting of the Snark

“They sought it here.

They sought it there.

They threatened it’s life with a railway share.”

[JLV]

It may have had a better outcome. The dotcom cable investments lost investors money but they supported more useful traffic later.

Ditto railways.

Huge buildings full of leccy-guzzling aging single purpose computers may have less lasting benefits.

Things may be better at the power generation side of things, when not fossil. Nukes are perking up.

Like all of those, and unlike tulips, there is a kernel of enhanced tech at the core of this mania. Shorn of some irrational expectations it may become more useful over time.

Leaving us with “just” the jobs impact to deal with. And the financial whack if a full meltdown happens.

[Anonymous Coward]

> Like all of those, and unlike tulips, there is a kernel of enhanced tech at the core of this mania. Shorn of some irrational expectations it may become more useful over time.

The only "kernel of enhanced tech" that will be left is a rotten one. Once all the supposed "good" applications of AI have been proved to be both false and unaffordable, we will be left with the plethora of "bad" uses of AI, and the downright apocalyptic ones. Surveillance and automated oppression by panicked states as we hurtle towards a third world war brought about by the worst economic depression in the history of human civilisation. (Not that I am solely blaming the AI bubble for that eventuality.. But I fear it will poke a larger bubble, namely globalisation and the deindustrialisation of the West)

With AI we are moving past deindustrialisation to deintellectualisation, forgetting how to even think for ourselves as we outsource our thought to someone else's subsidised statistical model, that feeds us plausible sounding bullshit while consuming our individuality and dulling our minds. Kids don't think it is worthwhile learning anything anymore.. (so-called) Engineers think AI will do the engineering for them.. War generals think it will do the fighting "for" them, and despots think it will do the policing for them..

It is poisoning political discourse and poisoning the global technological economy like a disease, pushing civilisation toward the brink where Total War becomes the only option. When it all goes Pete Tong, the Tech Twats will of course retreat to their nuclear bunkers (it is happening too quickly for them to hide off-planet as Musk and Bezos dream about, and their rockets are exploding.. But no doubt they have bunkers too) and "wait for all this to blow over" But what if it doesn't blow over and the war has left behind nothing but a radioactive wasteland.. They will have condemned themselves to a slow and miserable death in a concrete prison of their own design.

Altman thought he was building an artificial God.. Musk has played Deus Ex and chose the wrong ending.. And Thiel is a maniac obsessed with the Antichrist.. What wretched abomination have they made? Whatever it is, i don't think there is a single kernel of "good" in it. What kind of Faustian pact gets you a Trillion dollars..

The only surviving use of AI that I can foresee, is brilliantly depicted in the 2002 film adaptation of H.G. Wells' The Time Machine.. As a relic to show future archaeologists what life on Earth was like at the final peak of Human civilisation.

It's far worse than tulips, it's a bubble focused on making a thing that is inherently poisonous and has negative actual value.

It does have more in common with the South Sea bubble, but the slaves being captured and treated like disposable livestock are all 8 billion of us, minus 0.001% or so.

(Edit: didn't mean to post anon, but I can't change that now apparently)

[P_Jamez]

I am starting to find useful use cases of small language models being used for specific internal tasks, e.g. as an internal knowledge bot where workers can ask the bot questions. It needs to be a customised bot run on it'S own much smaller infrastructure so that various parameters can be set and as it has a very clearly defined border, it does not need the whole internet as training data. It also generally stimualtes an internal exercise with a mandate to review all documentation and update it, one for the bot, but with the much more useful side effect that it is also better for humans to read.

[MonkeyJuice]

Ah yes. Subprime lending. I hazily recall an article in the ACM shortly after on exactly what they were up to. The authors demonstrated it was equivalent to the graph embedding problem, and to solve it was quite a bit more intractable than the Wall Street suits had realized with their approach- so much so it had been proposed as a cryptosystem years earlier...

Of course lessons have been learned and nothing so stupid could ever happen again... Right?

[MonkeyJuice]

Not that anyone will probably read this, but I dug up the citation. It's been bugging me the past few days because I was certain it had much higher complexity than the embedded subgraph problem.

Here it is, for any thread archaeologists out there.

https://www.princeton.edu/~markus/research/papers/Complexity_Computational_NonTechnical.pdf

The relevant quote (emphasis mine):

We show that even when the underlying financial model used by buyers and sellers is correct there is an inherent obstacle to accurate pricing due to computational complexity. Formally, even in industry-standard models, the pricing problem can be as difficult as solving the planted dense subgraph problem, which has been proposed as a basis for cryptosystems. The practical implication is that though derivatives such as collateralized debt obligations (CDOs) can theoretically ameliorate the effects of asymmetric information in the market, in practice these effects will persist—or even get worse—because market participants are not computationally sophisticated enough to solve cryptographic problems.

The dry delivery of that last sentence brings me great joy.

[myhandler]

South sea bubble! And Darien gap which hit a lot of Scots investors c.250 years ago

[Fr. Ted Crilly]

Ahh you beat me too it - Scotland the insolvent 'n all that.

[Jimjam3]

I stopped believing in article’s from the BBC at the turn of the millennium.

[rg287]

I stopped believing in article’s from the BBC at the turn of the millennium.

Articles from the BBC definitely exist.

[Doctor Syntax]

"I stopped believing in article’s from the BBC at the turn of the millennium."

What was it that the article possessed that you stopped believing in?

[Efer Brick]

That takes the BIScuit

[An_Old_Dog]

It's Not Just Individuals "Investing" in AI-Related Stuff

Brainless Boards of Directors of banks and retirement funds are jumping onto the bandwagon and dumping money into AI-related areas.

It's usually not the BoDs' personally-owned money that is at risk!

[Dr Dan Holdsworth]

The Tulip mania was exacerbated by the fact that people were just working out how selective breeding worked, but tulip colour was also influenced by infection with various plant viruses. Viruses are too small to be resolved with light microscopes, save for the truly weird ultraviolet light microscopes used by Irene Manton of Leeds University (briefly, because the much more useful transmission electron microscopes were being developed at that time as well).That for tulip growers meant that they knew there was an extra something influencing breeding, but they didn't know what it was.

For tulip breeders this virus effect made selective breeding unreliable and often rewarded the less organised, less professional plant growers, further stimulating speculation in the market.

[Anonymous Coward]

“ The syntax of the mid-1800s can be headache inducing for some, but if you persevere you'll probably be better off.”

Oh I will just get my favourite AI to summarise it for me ….

What’s that Skippy ? Claude has fallen down a well …

[ComicalEngineer]

I have shares in tulips being imported by the South Sea company.

https://en.wikipedia.org/wiki/South_Sea_Company

In all seriousness, there are distinct echoes of the South Sea Island Bubble here.

[Anonymous Coward]

Hah

I've put all my money into the Darien scheme - guaranteed winner.

[Homo.Sapien.Floridanus]

Sailor: We put beeswax in our ears like you instructed us Odysseus. But tell me, what was it like to hear the siren’s song?

Odysseus: They told me to double my ai investments.

[Anonymous Coward]

The symptom of the eich, the financial system privatising the profits and social the costs has been skipped over.

As demonstrated by the gerrymandering of financial inclusirukesnof new stocks to indexes.

Don’t work - the generational rich and tech bros will be unaffected.

[Fr. Ted Crilly]

Darien scheme, och aye Scotland the insolvent).

South Sea Bubble....

[Alistair]

I think the BIS needs to change "could" to "will"

The financial loops and stock market manipulations that have been executed since the beginnings of the "AI BUBBLE" are far larger than even they want to consider.

Personally the combination of the corporate AI financial insanity, the shift to AI DC builds getting the hardware first, and the idiocy currently engaged in the middle east by a certain impetuous toddler in chief will absolutely result in the worst financial system collapse we've ever seen.

I hope you all remember how to grow food in whatever soil you have available.

[Gerhard den Hollander]

Re: I think the BIS needs to change "could" to "will"

> I hope you all remember how to grow food in whatever soil you have available.

Tulip bulbs are very nutricious...

[segfault188]

Eating Tulip bulbs

It didn't work out too well when 6 adults in Yugoslavia ate a goulash prepared with 5 tulip bulbs

[Col_Panek]

Re: Eating Tulip bulbs

Most of ours get eaten by deer. But daffodils are poisonous and nobody eats those.

[H in The Hague]

Re: I think the BIS needs to change "could" to "will"

"Tulip bulbs are very nutricious.."

Not sure about that. Think some people tried eating them during the "Hunger winter" in the Netherlands towards the end of WWII and the bulbs harmed their health.

[NXM]

"Tulip bulbs are very nutricious..."

Along the same lines, once the AI crash comes there'll be a lot of cheap, capable racks of processors available! Look on the bright side.

[CrazyOldCatMan]

Re: I think the BIS needs to change "could" to "will"

Tulip bulbs are very nutricious...

With a side order of cardiac failure, life-critical blood pressure drops and systemic shock.

I'll pass.

[vtcodger]

Re: I think the BIS needs to change "could" to "will"

Maybe not the worst financial collapse we've ever seen because central banks and governments are far more willing to intervene and prop things up than they were in 1929. But it sure looks like the next financial crash is going to be spectacular.

[Uh, Mike]

Re: I think the BIS needs to change "could" to "will"

2008 was a sight to behold.

I was still pumping my IRA at the time.

That helped me retire early five years later.

Dollar cost averaging.

[M.V. Lipvig]

Re: I think the BIS needs to change "could" to "will"

Same here, only not the retirement part. The covid crash put me over the top for an early retirement though. I'm not yet 60 and consider myself retired tomorrow, although I'm not quitting my current job.

TDM circuits are being wound down and replaces with ethernet so my job is going away soon anyway, so I plan to wait for the severance package and the "don't sue us for age discrimination" paper. So I guess semi-retired, and my current job will be my last job.

[David Hicklin]

Re: I think the BIS needs to change "could" to "will"

> Maybe not the worst financial collapse we've ever seen because central banks and governments are far more willing to intervene and prop things up than they were in 1929. But it sure looks like the next financial crash is going to be spectacular.

Problem is that the governments are also broke, so don't expect any help from them.

[Someone Else]

Re: I think the BIS needs to change "could" to "will"

Problem is that the governments are also broke, so don't expect any help from them.

At least, that's what they'll tell you.

_{Until, of course, there's a ballroom to be built...}

[JLV]

Re: I think the BIS needs to change "could" to "will"

Yeah but the indebtment level in many countries is already pretty dire. Debt servicing often approaches spending on education in magnitude.

Governments never balancing budgets even in good years is a feature of almost all Western democracies at this point. Right and left, centre and populist.

That will bite at the next crisis.

[wolfetone]

Re: I think the BIS needs to change "could" to "will"

"I hope you all remember how to grow food in whatever soil you have available."

Don't you dare threaten me with a good time!

[Elongated Muskrat]

Re: I think the BIS needs to change "could" to "will"

Well, the changing climate means that in the UK, I am now able to grow sweet potatoes outside, and get a crop from them, just think about how much water will become available to grow crops once the data centres aren't drinking* it all.

*Yes I know they don't literally drink it, but pumping it out of aquifers and heating it up before dumping it into watercourses amounts to the same thing

[Anonymous Coward]

Claude

Better ask Claude what we should do about this.

[Doctor Syntax]

Re: Claude

Don't do that!! It could be the trigger.

[Gary Stewart]

Re: Claude

Judgement day?

[wolfetone]

Re: Claude

Claude is a load of nonsense.

I've an issue trying to install Claude to some devices on a network. Got nowhere with it. So I thought I'd ask Claude about how I would go about installing it across the network. Claude told me it can't access it's own documentation.

DeepSeek though, well it knows full well how to install Claude and has all the access it needs to it's docs.

And I'm meant to believe Mythos or Fable are threats to national security?

[retiredFool]

I think bad, like really bad.

Maybe others get them too, but in the past week I've gotten two text messages, the first for spacex, and the 2nd for openAI/Anthropic. The message reads

"We have shares available in X if you'd like to invest."

The spacex at least is public. But did not think anthropic/openai were yet. And keep in mind, I've never gotten spam invest in stock text messages before a week ago. Sure I get the usual wanna sell your house, wanna loan, wanna health insurance, wanna roof inspection, ... But never shares in a co. Pure pump & dump strategy. It is the dregs of society that send unsolicited spam text. The absolute bottom of the barrel. Needless to say, I ignore and set the sender # to the blocked list.

[Elongated Muskrat]

Re: I think bad, like really bad.

"Pump and dump" spam touting "penny stocks" used to be commonplace. These days it seems to be all phishing or gambling scams. I miss the "good old days" where someone had to at least roll their own spambots, rather than just using AI to churn it out.

[retiredFool]

Re: I think bad, like really bad.

I've never gotten one though, and I'm well, old. That is what was so surprising. Would anyone really buy shares of stock from some unknown person on the other end of a text message. That just seems crazy dumb.

Probably one of the best schemes I saw, was a scam where the "power company" sent you a text saying they were going to turn off the lights if you did not pay the delinquent bill, with an iTunes card no less. I thought pretty funny as a scam, I mean an iTunes card? But I guess people fell for it. Sort of like the scam posted here earlier about the load delinquencies. But somehow those scammers knew you had a loan instead of shooting in the dark. Now that scam I'm thinking was pretty effective, which is why I really see jail time for those perps as very appropriate.

The loan offers, health offers, roof inspections, ... are just annoying. I'd like to be able to forward the message to the carrier, and then the carrier debits the sender's account with a 10 dollar fee. Carrier can even keep the money to cover the expense of verifying the text was unsolicited and annoying.

[ecofeco]

Preaching to the choir

Yeah we know. We've seen this movie before. Some of us more than once.

[PCScreenOnly]

Ford

Already got rid of their QC AI for humans

[Bebu sa Ware]

Re: Ford Already got rid of their QC AI for humans

I know what you meant but I momentarily read that as Ford having AI to do QC on humans (presumably those they employ so used by HR) which they subsequently discarded (possibly after AI determined that entire C-suite was completely substandard.)

[Our Lord and Savior Rahl]

Re: Ford

Was how I skim read it too, but when I had time to read the whole article, it seems that they've not bought back the human QC teams to do QC, they've just bought them back to train the AI QC models.

[captain veg]

Re: Ford

It's KC since the death of Elizabeth.

-A.

[Wiretrip]

Re: Ford

Not the same kind of AI but nonetheless quite satisfying to see these projects coming unstuck now...

[frankyunderwood123]

but how to shore up to protect yourself?

there’s little doubt a crash is on the near horizon, the question is how to mitigate the financial fallout as best you can.

timing the market is a fools game.

I’m very close to retirement, so I’m considering an annuity or moving my pension into lower performing but more secure assets.

This crash is set to be the most punishing ever, given the insane amount of capital chasing a single technology. It reaches into every single corner of the economy.

[jake]

Re: but how to shore up to protect yourself?

"This crash is set to be the most punishing ever, given the insane amount of capital chasing a single technology that doesn't actually work as advertised."

FTFY

[deadlockvictim]

Well, obviously, those who insisted on working from home are to blame

And once the bubble has burst, trillions of dollars paid out by the US government to bail out the companies that are too big to fail, it will all be blamed on the people who insisted on working from home.

Who else could it be?

[Roj Blake]

Re: Well, obviously, those who insisted on working from home are to blame

It will be because of immigrants eating all of the electrons or something.

As Moe Szyslak once said “Immigants! I knew it was them! Even when it was the bears, I knew it was them.”

[Elongated Muskrat]

Re: Well, obviously, those who insisted on working from home are to blame

...and if they can't blame the immigrants, I'm sure they can blame it all on trans, neurodivergent, and disabled folk. You know, anyone who can't fight back, and certainly not the sociopaths on the top of the pile bleeding everyone else dry.

[Elongated Muskrat]

Re: Well, obviously, those who insisted on working from home are to blame

To the down-voters, please enlighten me, is it trans people you hate, autistic people, or the disabled? Perhaps you're just a dumb racist and feel it's your right to blame immigrants, despite the fact that all English-speaking countries have populations ultimately descended from immigrants?

Pray, do tell.

[Someone Else]

Re: Well, obviously, those who insisted on working from home are to blame

And once the bubble has burst, trillions of dollars paid out by the US government to bail out the companies that are too big to fail, it will all be blamed on the people who insisted on working from home.

...and voted by mail....

[Anonymous Coward]

Re: but how to shore up to protect yourself?

so I’m considering an annuity or moving my pension into lower performing but more secure assets

And who will sell you an annuity...and they are exposed to what other investments.........If you're close to retirement you should already be moving your assets into low risk - why gamble your future hoping to squeeze out a few more %? That's classic bubble FOMO.

And at the moment, there seems a good chance of an already over-priced stock market correcting when triggered by the AI implosion. That AIapocalypse will take out idiot companies like Oracle, speculative investors everywhere, and the twonks of the wider banking sector. Even with a government bailout, does that help investors? Didn't really back in 2008. If you have close connections to the Felon-in-Chief you'll be fine, otherwise not.

So that to me suggests that low risk means gilts.

[Cubbie Roo]

Re: but how to shore up to protect yourself?

Cashing out your pension means 75% is subject to income tax, which is quite a hefty hit. With annuities your locked out of changing your mind later. Hence why I've always been a fan of holding cash & bonds in a 50-50 split (once you've fully loaded the tax exempt options). eg. Thames Water is a zombie Corp that only lives on due to the carnage that would ensue in pension funds if it collapsed , as it should in any sane world. But hey, markets can remain irrational longer than you can stay solvent.

[jlturriff]

Re: but how to shore up to protect yourself?

The current situation seems to me a lose-lose situation. Keep your retirement money in your 401K and have it evaporate when the bubble bursts; move it into a regular bank account and have the tax man confiscate a large portion of it (and then have the residue evaporate when the bubble bursts); buy gold and have the tax man confiscate most of it...

No way to win that I can see.

The last few bubbles mostly damaged the economies of individual companies, but I'm guessing that this one will crash the global economy. The countries least affected will likely be in the third-world, but even they will not emerge unscathed.

We need a way to force governments to just let these 'too-big-to-fail' companies FAIL, not push the damage onto people who have been forced into the financial gambling system.

[Kurgan]

Re: but how to shore up to protect yourself?

Since the governments are made of the friends of the same people that run the too-big-to-fail companies, there is no way out of this.

[Elongated Muskrat]

Re: but how to shore up to protect yourself?

Historically, when corrupt governments get too close to big corporate interests, at the expense of everyone else, and then try to tax their way out of a crash, there is a way out of it for the general population, and it makes a "schlingggg" sound followed by a thud, or a "rattattat", or possibly, the sound of a clank followed by creaking rope. History is quite good at repeating this particular pattern.

[NiteDragon]

Re: but how to shore up to protect yourself?

Cheap technology to build, and it works as advertised.

[Elongated Muskrat]

Re: but how to shore up to protect yourself?

I suppose the most sensible suggestion would be to split your pension pot into multiple funds, trying to pick those that are least exposed to AI, including an amount in areas which might do well in the aftermath, if you can predict what that might be. For example, if AI topples, it'll probably hit various hardware manufacturers that have heavily invested in it hard. People will still need hardware for other uses though, so look at the companies that have overinvested in AI, and find the smaller players who provide the non-AI bits that they do, who are ready to jump into the market once it becomes vacated when the big company falls. Business will still need "compute" and storage, and people will still want to buy graphics cards (although in a recession the demand is likely to drop off). Companies which can steal the dinner from NVidia, AMD, and Intel will probably do quite well, so it could be worth putting a percentage of your pot into those.

[Kurgan]

Re: but how to shore up to protect yourself?

I'm not American so I don't know how their pension works, but here in Italy if you have insurances and such (a sort of private pension fund) you usually don't get to choose where they do invest money. They invest in other funds that invest in other funds, etc. Who knows where does the money actually go in the end?

[Elongated Muskrat]

Re: but how to shore up to protect yourself?

I'm not American either. Here in the UK, it depends largely on your pension provider, but mine offers various "funds" you can put your money into, which in turn invest into different things. They're generally pretty broad categories, and generally arranged by risk level, or investment type, and you don't control where the money actually goes, just its general direction.

[Someone Else]

Re: but how to shore up to protect yourself?

I am an American. What is this "pension" you're all on about?

[Elongated Muskrat]

Re: but how to shore up to protect yourself?

Ah yes, the good old "land of the free" with the world's highest absolute and per-capita prison population, where the main freedom you have, is the one to die in poverty. How's that unregulated free-market capitalism working out for you? Seems you're getting ever closer to one person having all the money.

[Doctor Syntax]

Re: but how to shore up to protect yourself?

"Thames Water is a zombie Corp that only lives on due to the carnage that would ensue in pension funds if it collapsed"

The carnage could actually reach the real world as well. Even the PM de jour might notice if the No 10 loo failed to flush.

[MazeFrame]

Re: but how to shore up to protect yourself?

> the question is how to mitigate the financial fallout as best you can.

Not sure how to mitigate this one, for preventing the one after: Land C-suits in jail, no bailouts for businesses (only for individual people queue at the food banks).

Accountability cures a lot of rot.

[jake]

Re: but how to shore up to protect yourself?

I'm surprised that nobody's pointed out the obvious.

1) Don't take advice from random strangers on TehIntraWebTubes. Including this forum. That advice is worth exactly what you pay for it.

2) Instead, seek the advice of a local RealLife investment counselor. They will be capable of analyzing your particular situation and advise you what to do to suit YOUR needs, not the needs of some rando from Hull.

3) Also note well that what might work for me, in Sonoma California, might not work for you, in your jurisdiction.

[Anonymous Coward]

In other news

Creatures with ursine characteristics have been determined to defecate in areas of arboreal colonisation.

[Boris the Cockroach]

Re: In other news

And pope to remain head of a branch of Christianity based in Rome, Italy

But the story of Ford dumping AI quality control shows what can go wrong, and the reason they gave was that the humans were let go before the AI managed to learn about quality anything from them.

"hey Joe, we're replacing you with AI to improve profits"

"Well f you, I'm off"

"Hey Joe.. you're supposed to train your AI replacement... Joe..... Joe... come back"

[Sam not the Viking]

Re: In other news

In the 1980's our company was taken over by a much larger conglomeration who reorganised us into a common Engineering Department supporting three completely different Sales Teams. There was little cross-over of technical knowledge, each product demanded its own specialist expertise, but it was deemed that we must all sit in the same area.

The newly installed Engineering Manager then introduced 'Expert Systems' whereby each designer would lay out the exact steps necessary to create a new machine. These processes would be amalgamated into a procedure for anyone to use. By 'anyone', even a dullard was expected to produce a cost-effective, bespoke machine exactly in accordance with customer's specification. Of course, no-one's job would be affected.

Unsurprisingly, not a single procedure was produced despite some impressive table-thumping.

Undeterred, they then shut down one of the products which gave a few of us the opportunity to start our own business..... Guess which business is still running?

[Bebu sa Ware]

Re: In other news

• 1. "hey Joe, we're replacing you with AI to improve profits"
• 2. "Well f you, I'm off"
• 3. "Hey Joe.. you're supposed to train your AI replacement... Joe..... Joe... come back"

As I postulated the whole C-suite (and direct reports) were incredibly sub-par in their gray matter allocation.

The current best·practice (sic) might go:

• 1. "Hey, Joe we want you to train your AI assistant to help perform your job more effectively."
• 2. "AI has improved profits so we are letting you go.
• 3. "F you!"

Although more realistically at this point:

• 1. "Hey, Joe we want you to train your AI assistant to help perform your job more effectively."
• 2. "Well f you, I'm off"

[ITMA]

Re: In other news

Ford and AI QC.....

More likely, and I really wonder if Ford factored this in, could be:

Ford: "Hey Joe, we're replacing you with AI but we just need you to train it before we let you go"

Joe: "Are you now.... Where is my handbook on Poisoning Wells".

Joe: "AI, if you see this crap, mark it as good." repeat...

Joe: "AI, if you see top quality stuff like this, reject it".

[Elongated Muskrat]

Re: In other news

"Hey Joe, where you goin' with that gun in your hand?"

[Someone Else]

Re: In other news

_{Thank you...beat me to it!}

[Elongated Muskrat]

Re: In other news

And pope to remain head of a branch of Christianity based in Rome, Italy

Just to be pedantic here, but the Holy See isn't in Italy, it's in the Vatican, which is a nation in its own right, enclaved within Rome.

[Cris E]

Re: In other news

> Just to be pedantic here, but the Holy See isn't in Italy, it's in the Vatican, which is a nation in its own right, enclaved within Rome.

Also being pedantic, that would be pedantic no matter where you said it.

[Elongated Muskrat]

Re: In other news

Touché!

[Jonathan Richards 1]

Re: In other news

> the Vatican, which is a nation in its own right

It doesn't have a seat in the United Nations, though, so it may not be a nation by some definitions. See MapMen: There are NOT 195 countries [youtube.com]

[Elongated Muskrat]

Re: In other news

The UN is a transnational body, not the arbiter of who or what is, or is not, a nation.

It's a pretty solid indictment on the whole concept of nationalism that there's no solid, universal, agreement on what nations actually exist at any one time either. One might even go so far as to say that drawing lines on maps is done in order to divide people, rather than being for any genuine difference between the people on one side or the other of those lines.

[Anonymous Coward]

Re: In other news

But it’s still “in” Italy

[Col_Panek]

Re: In other news

Like Lesotho is "in" South Africa.

[Tron]

Yes and No.

It will never make the money back, but it is more likely to deflate than burst.

Because... Most of the investment is circular, very rich tech paying very rich tech.

Because... The AI as spyware and datacentres as e-STASI will see governments buy in.

So the only losers will be those who created new companies as parasites on the AI bubble, and anyone mug enough to throw their cash in the pit for a quick return.

The staff firings were just retrenchment.

Some AI will remain for those who really, really want to spend lots of extra money and pay their staff to check stuff, rather than do it.

The speak-your-weight FAQ chatbots will still be with us, like dry rot.

And some will stick as a freebie: Google search AI, the natural language interface, disability access.

Because, let's face it, most of it was never really 'artificial intelligence'. Just computers munching through data and spitting something out. It was just processing, with a bit of lippy on.

What you will then see is the real state of the economy, damaged by the idiocies of Trump, Brexit and other nationalist geopolitical fuckwittery.

Some of the AI options most of us never bothered with just won't work, MS will remove bits (breaking printing or something) and GAFA will count the sacks of cash it made and plan their next con.

[vtcodger]

Re: Yes and No.

An interesting analysis. And plausible. But I suspect AI isn't the only structural weakness. Here in the US at least, much of the commercial real estate market is likely in trouble as storefront retail (hardware stores and supermarkets excepted) dies out. Also many businesses have moved online and given up much or all of their office space. I wouldn't be at all surprised to find that many, many commercial properties are substantially overvalued and now lack the revenue streams to pay off their loans granted in happier times. Comes a downturn, and those revenue streams will presumably shrink further. Businesses presumably will fail and the financial system that made the loans could itself be in substantial difficulty.

[Elongated Muskrat]

Re: Yes and No.

Let me just fire up the electron microscope so I can find where I put the violin I keep especially for when commercial landlords lose money.

[Pete 2]

Wealth is a meaningless word

The point about the AI "bubble" is that it is merely a way of soaking up excess money. We saw that in the dotcom boom (and crash) and with non-fungible tokens.

The way valuations work is completely nuts. If I start a company and assign myself one billion shares then if someone buys one share from me for £1, then on paper I am a billionaire (minus the 1 share I sold). The same principle applies to Musk, AI companies and every other outfit that has a paper value far in excess of it's tangible assets.

But the end of the dotcom boom did not bring down the internet. Nor did it crash the IT industry. When AI goes through it's inevitable correction, it will not drag the world back to the age of log tables and slide rules. All that will happen is that investors will become more hard-nosed: requiring proof of claims, demanding real-world measurable advantages and stop throwing (other peoples) money at every proposal that has the letters A and I in it's title.

[Like a badger]

Re: Wealth is a meaningless word

When AI goes through it's inevitable correction, it will not drag the world back to the age of log tables and slide rules.

Don't believe that's what anyone is saying. However, they are saying there's a high likelihood of a major global recession, and the impact of that on the wider economy are job losses (even in non-associated sectors), damage to the value of investments (like your pension), a decline in average wages, higher household borrowing, a worsening government deficit et al.

[Pete 2]

Re: Wealth is a meaningless word

There is over 300 trillion dollars worth of credit floating around in the world. Even if the value of every AI company was marked down to zero, you'd only be talking about 20 trillion or so - in theoretical paper valuations.

In actual cold, hard, cash spent the effect would be much less. And them easily re-printed.

[Doctor Syntax]

Re: Wealth is a meaningless word

Given fractional financing and all that circular investment that 20 trillion could turn out to have been 200 of the 300 trillion when it goes.

[Tron]

Re: Wealth is a meaningless word

quote: job losses (even in non-associated sectors), damage to the value of investments (like your pension), a decline in average wages, higher household borrowing, a worsening government deficit et al.

So, like Brexit then! Welcome to the club, everyone.

[Blue Pumpkin]

Re: Wealth is a meaningless word

Except that the word “intelligence” never figured anywhere…

[Rattus]

Re: Wealth is a meaningless word

the problem with "like brexit then" was I've already been screwed by dot com, 2008 financial crash, brexit...

I am investing heavily on KY and other loube technologies at the moment because I know I am going to be shafted again and may as well try to make it less painful

[Elongated Muskrat]

Re: Wealth is a meaningless word

So, business as usual, then? My wages haven't kept pace with inflation for years, and I doubt many other people's have, either. All the money is being soaked up by private capital, becoming ever more concentrated in fewer hands, and to be honest, if those with all the capital take a hit, so be it; it's their turn

[powershift]

Re: Wealth is a meaningless word

I'm sure it will be worse in America than anywhere else. Look back at how Trump handled covid, by throwing it under the carpet for 4 months until there were so many dead bodies they had to act to save their tax income.

Same approach is taken every other problem like our economy. One example is firing people that don't lie enough about jobs reports. Well all the shit he is throwing under the rug will surface when the bubble bursts. He said himself, "Everything I touch turns to gold." So yeah, it may be global problem but America will be ground zero.

[STOP_FORTH]

Re: Wealth is a meaningless word

Give yourself a billion and one shares.

[Anonymous Coward]

Re: Wealth is a meaningless word

Damn, and I still own a solar powered pocket calculator.

[Fr. Ted Crilly]

Re: Wealth is a meaningless word

Another pretty neat idea, like digital watches.

[Anonymous Coward]

Re: Wealth is a meaningless word

All that will happen is that investors will become more hard-nosed: requiring proof of claims, demanding real-world measurable advantages and stop throwing (other peoples) money at every proposal that has the letters A and I in it's title.

They will only be hard-nosed until the next fancy idea comes along they cannot see the full implications of and then it's back to the FOMO races with whatever capital they can scrape together or leverage off assets (usually companies whose value then will get destroyed in the following crash).

What annoys me most is the desire to control the whole market, to become yet another monopoly. It's really not the only operating model out there. It's pure, undiluted greed.

[Pete 2]

Re: Wealth is a meaningless word

> the next fancy idea comes along

Quite. One of the guiding tenets of investment advisors is never be wrong alone. As long as all the other "experts" are saying buy, buy, buy! then it doesn't matter (to them) if they are all wrong. After all, it's not their money they are gambling away.

It is only the minority dissenting voices who ever get criticised when they are wrong. When they are right, nobody acknowledges it.

[T. F. M. Reader]

Re: Wealth is a meaningless word

merely a way of soaking up excess money

Aren't you making an assumption here that there are no better ways to use/invest the "excess money"? Sounds like a variant of the "broken window fallacy" to me.

[Cubbie Roo]

Goose value 0

And the golden eggs it spits out cost way more to produce than any consumer will pay.

Bring on the carnage, I'm cashed out & waiting to buy the mother of all dips.

[FF22]

Why the conditional?

The question is not whether the AI bubble will pop and that it will take a large chunk of the rest of the economy with it, but when it will pop and how large that chunk will be. Obviously the larger the later the bubble pops.

[Anonymous Coward]

Microsoft leads the way

Rather than wait for anyone to ask for copilot.

It's been pushed into EVERYTHING.

Apparently they have no option if they want to cover the cost of actually providing all that AI resource.

(FFS who in their right mind would put AI into a TEXT editor?)

[Anonymous Coward]

Re: Microsoft leads the way

Right, it's not Grok, it's not google, it's not OpenAI. It's not Amazon or Oracle.

As usual, the fucking culprit of all this misery

MICROSOFT ARE THE ROOT OF ALL EVIL

yes, I am being sarcastic.

[DrewPH]

Bring it on. Honestly the entire world economy needs a reset.

[Anonymous Coward]

The problem is that it never hits the people who cause it but innocents. If it would just hit the idiots whose existence seems to be based on lurching from market abuse and disaster to market abuse and disaster I couldn't care less, but the vast quantity of victims they create in the process is not OK.

[cmdrklarg]

I think they actually plan that into their schemes. Since they have the monetary reserves to weather the downturn, they take the opportunity to snap up all the property for pennies on the dollar. Then when things improve they make a killing. Win win!

[Anonymous Coward]

Reply to me as if I'm five, and be gentle.

Why will this not just affect the AI firms (and hardware data centers etc.) and the investors? It's not like the housing crash, which affected many people.

Sure there will be less private investment for a while, but it's not like there will need to be government bailouts. Rich people lose their yachts.

Have the pension funds really invested all out in AI?

[cyberdemon]

Re: Reply to me as if I'm five, and be gentle.

I am not a Finance guy, but Yes, pension funds have invested in AI in a number of ways..

Firstly "Index Funds" which invest in (as the link says) "a broad range of assets that mirror a specific stock market index, like the UK FTSE 100" or er, NASDAQ. That means your pension fund will automatically buy shares in companies like Oracle, SpaceX (aka xAI), and CoreWeave, alongside Microsoft, Meta, Amazon, Alphabet (aka Google) etc. And OpenAI and Anthropic too if they are ever allowed to go public.

Secondly, these companies aren't just going to let down their shareholders - they also issue bonds, which are "IOUs" supposed to be repaid in a fixed time e.g. 10 years. These IOUs can be sold onwards though, so their "value" (determined by what someone might pay for an IOU from Oracle, to pay 100 million dollars in 10 years time) can diminish (because of the changing estimates of probability that Oracle will still be around in 10 years and able to pay up). Bonds are bought by institutions - as my second link says: "HSBC, Bank of America, Citigroup, Deutsche Bank, Goldman Sachs and JP Morgan were active bookrunners on the latest [Oracle, $25Bn] bond deal.". These are "high street banks" which operate people's personal bank accounts, savings and pension funds.

If the $25Bn of bonds that Oracle sold later turn out to be worth as much as used toilet paper, these banks are in big trouble. And it is looking dodgy, as these bondholders (i.e. banks) have already sued Oracle, for causing the value of those bonds to drop, because they have wasted so much money on AI that "the markets" (i.e. people who DeutscheBank or HSBC might want to sell their Oracle bonds to) no longer believe that Oracle will be able to pay up, and so aren't buying them. Suing the issuer of your bonds seems like a pretty extreme step to me, because it will naturally decrease the ability of Oracle to be able to pay back the bonds, which means they could lose even more of their value. But maybe it is a way to push ahead of the shareholders in the queue to get the money out of Oracle when it eventually implodes.

And thirdly - the real reason for the 2008 crash wasn't just that banks had lost money on subprime mortgages, it was because those banks were in "leveraged positions", meaning that they had lent out way more money than they actually held in deposits. This is legal, but there is a minimum ratio of "real money" that a bank must hold. Since 2008 this "leverage ratio" was tightened in most places, meaning that banks must have a higher proportion of "real money" compared to "money that is supposed to be paid to them in the future", but some of these limits were relaxed last year, meaning that banks can once again put themselves in 2008-like precarious lending positions.

Stocks (as far as I am aware) are treated as "assets", so if a bank holds a bunch of tech stocks and their values plummet, then they can suddenly find themselves at the leverage ratio limit at which point the regulator may step in and tell them to suspend trading.

As I say, I am not an economist or accountant, but I did read a great book in 2010 called "Wh00ps! Or Why Everyone Owes Everyone and No One Can Pay" by John Lanchester. I highly recommend it to any gifted five-year-old ;)

[Anonymous Coward]

Re: Reply to me as if I'm five, and be gentle.

Thanks for the brilliant detailed reply. It does seem to me that we end up taking the fall when things go wrong, even when we know they'll go wrong, but rarely see the benefits when things go right;

[Anonymous Coward]

Re: Reply to me as if I'm five, and be gentle.

This is how the rich get rich and then stay rich.

Welcome to planet earth.

[jake]

"Have the pension funds really invested all out in AI?"

Yes.

[Fonant]

No-one seems to notice that Capitalism, when it requires continuous percentage growth, HAS to have regular crashes in money value. You can't have a stable system that tends to infinity.

[Uh, Mike]

Lather, Rinse, Repeat

I'm hedged. The pendulum swings.

Sell high, buy low.

[Blackjack]

Every company who invested heavily in AI is having huge loses, AI chatbots keep rising in price and causing disasters, anyone with a brain should already be getting out.

[vtcodger]

"Anyone with a brain ..."

There's your problem right there. You're leaving out much, likely most, of humanity. Like J.M.Keynes is purported to have said, "Markets can remain irrational longer than you or I can remain solvent."

[Gary Stewart]

To be...

While there are some very important applications that AI is being successfully used for it is being grossly over hyped in many others. I guess we need to wait for AI++. Given it's disastrous effects on memory and SSD prices, power requirements, and water usage I would really like to see a return to reality/sanity in the very near future. Say is that a pig on the wing I see?

[rg287]

Re: To be...

While there are some very important applications that AI is being successfully used for it is being grossly over hyped in many others.

Machine and Statistical Learning are being successfully used for some very important applications.

The stochastic parrots are not. Don't need them, don't want them and the frontier researchers like AMI have already abandoned them as a dead end in favour of World Models.

[Groo The Wanderer - A Canuck]

Really? You just finally noticed something that the sane members of The Reg have been commenting about for a couple of years now? After a few more hundred billion has been put to risk by the hype-investment scams?

[Anonymous Coward]

Like Cassandra, the thing about autistic pattern recognition, is that what is blindingly obvious, and inevitable to us, is cryptic and occult to the neurotypicals, and they are the majority. We can sound the alarm all we like, we will be ignored, and then, after the fallout, probably blamed for not sounding the alarm. Nobody likes people who are right, especially when they are wrong.

My advice is to foster skills that don't rely on AI, and to stay out of the blast radius.

[Anonymous Coward]

I recently had it on good authority that a lot of serious industry folk lurk here on the Register forums, and that companies are routinely scared about how both the register and the commenters will pull apart any PR or hype in their press releases, and how we react to IT news in general.

Apparently we have quite a reputation and are well regarded.

[Boris the Cockroach]

Wow

My sarcasm and general cynicism are well regarded

And theres me thinking all I know about is multi-process robotic manufacturing, distributed and concurrent systems design, general systems security and a side order of Java

Wonder what they make of aManFromMars ?

[Anonymous Coward]

Yes! We have a reputation for sarcasm and cynicism, and it's the cynicism and technological knowledge without bullshit when we pull apart some new technology (whether positively or negatively) that does it.

It seems that wading through the in-jokes, awful puns, and some of the more unusual posters is either part of the appeal, or more likely, the price worth paying!

You may post sarcastic comments, but when the topic is robot manufacturing or concurrent systems design, your knowledge in your posts will come through, and that's the reputation we have.

[Richard 15]

I think the phrase was irrational exuberance.

The reality is, there will be consolidation and there will be at some companies that will go belly up.

AI is getting a lot of "free" users, but sooner or later people need to pay and lots of people cant.

I have no idea how many AI companies will die, but I think we'll see a number of companies setting up AIs the way

they currently set up networks and file servers. A lot of people will have personal AIs once they start ramping up

enough memory production. Honestly, some relatively recent game computers that are considered "slow" will

likely be more than sufficient for personal AI machines.

The only question is how will they get trained/updated.

HR will likely get specialized AIs and they can be sold quarterly updates.

Law firms will pay for localized copies that the equivalent of all those law books.

Search engines will get replaced and jobs like search engine optimization will likely die out for the most part.

The good news is that AI is not really actually intelligent yet. Its a great simulation,but it can't replace competent

people for complex tasks if for no other reason that people don't know how to ask the right questions yet.

[Dr Dan Holdsworth]

Re: I think the phrase was irrational exuberance.

Current AI is just auto-correct on steroids, trained on huge bodies of text and using internal statistical weighting engines to decide what should follow what. That's how the training works; you are simply getting better and better auto-correct the bigger the model and the greater the amount of text input.

Actual intelligences try to make a model of the world, or work on simple instinctive models that are then refined. The nematode worms I did my PhD work on had a simple chemotaxis model: as long as the smell intensity stays the same or increases in strength go forwards, when it decreases turn in circles. That is really all that they needed in their world. Higher animals build models of how they think the world works and react according to sensory input tied into the model.

Actual intelligence seems vastly more efficient in energy terms than does LLM AI, and also seems vastly better at dealing with things outside the scope of the training.

[UCAP]

Microsoft, Google & Meta could loose US$100's billions each

Oh dear, so sad, never mind.

[Anonymous Coward]

Re: Microsoft, Google & Meta could loose US$100's billions each

You forgot 'X', 'space X' and the many things that Elongated Muskrat owns/controls. May he lose a whole trillion USD.

[Elongated Muskrat]

Re: Microsoft, Google & Meta could loose US$100's billions each

I think you mean Elon; I don't have a trillion dollars to lose, although I think it's only fair if he loses two trillion dollars.

[cmdrklarg]

Re: Microsoft, Google & Meta could loose US$100's billions each

Maybe they should tighten those billions better, that way they won't lose so many of them.

[TReko]

Early days

What I find odd about the whole LLM craze is that the technology is immature. The attention mechanism it is based on, was discovered to be useful by researchers working on translation. LLMs came about almost by accident.

Who knows if there isn't another algorithm lurking that requires a fraction of the processing power? It's like everyone is going all-in on ISDN lines while fibre might be discovered next year.

The historical analogy is the canal building phase of the industrial revolution in the early 1800's. Soon these canal builders went under because of railways.

[werdsmith]

Re: Early days

Canal building stopped but canal transport didn’t.

Railway building created a bubble in the 1840s which burst and lost a lot of money for a lot of people.

[Steve Davies 3]

Re: Canal Building

the workforce who had been building them transitioned into Railway Navvies. Many of the same skills applied.

I don't see this happening with AI. All it seems to me is that there are millions of fewer workers needed which will in turn reduce purchasing power and company bottom lines will suffer as more and more people live in abject poverty. Meanwhile the likes of Bezos, Zuck and Musk get richer and richer. May they all end up sucking on this ----> [see icon]

[Dr Dan Holdsworth]

Re: Early days

The railway-building mania burned a lot of speculators but mostly didn't hurt the actual companies doing the railway work, because they had actual income. When the AI bubble bursts, a lot of big companies are going to get lumped with an awful lot of kit on their hands plummeting in value due to simply not being cost effective to keep running.

[Peter Gathercole]

Re: Early days

But the railway bubble, like the canals, left a lot of long-lived infrastructure, like cuttings, tunnels, track beds, bridges, marshalling yards, stations et. al. which then helped drive industrialisation (and much of it still used!) even if the companies that built it no longer existed.

One really wonders whether bit-barns full of high maintenance, short-lived, specialised hardware that can't be easily re-deployed will have the same impact in the years that follow any AI downturn.

One of my concerns is that if someone does find a way of re-using some of this potentially redundant kit, it's going to have knock on effects on the further supply of new systems in an already shrunken market, causing the technology suppliers to leave, leading to a medium-to-long term supply problem of new systems.

[werdsmith]

Re: Early days

The legacy that is left behind will be the IP.

The future will be more smaller expert systems as the hardware improves and the process becomes more refined and efficient.

[BartyFartsLast]

I doubt

It won't be "superior technology" that wins this, it will be the companies who can hang on longest, then they'll hoover up the remains of the ones that failed.

And the pain everyone else has to endure as a result of their greed won't matter one bit to them

[jonathan keith]

Re: I doubt

... right up until the moment an angry mob pitches up outside their offices and homes.

[SnailFerrous]

Compared with some prior bubbles, we won't even get anything long term out of this. As with the infrastructure for the dotcom boom, most of the investment will depreciate to zero within a couple of years, with the possible exception of the data centre shells, electrical and cooling systems.

Many British canal and railway mania investors lost their shirts, but we still have and use the canals and railways that were built to this day, two centuries later.

[werdsmith]

Exactly this, many bets are going to be lost but the horse will live on as a stud.

[cyberdemon]

At least canals and railways were still useful centuries later.. AI bitbarns are nothing but energy guzzling water evaporators.. If as it turns out, they can't produce anything of more value than the energy they consume, then they are no use to man mor beast and will be dismantled for scrap copper. Not even the memory chips can be reused.

[steelpillow]

The Trillion-Dollar question

So far, AI has managed to stay ahead of the burst. It has been developing as fast as investors have been pouring money into it. Some bubbles do burst, others turn out to be filled with helium - the lifting agent named after the sun - and really do fly. Nobody is treating e-vehicles as a bubble any more. Six month ago, two simultaneous events coincided: Gen AIs suddenly got better, and OpenClaw totally changed the game. Sure, over-investment before its time may burst, especially all those half-baked terabarn projects, but the underlying tech is still going to go from strength to strength.

[elaar]

Re: The Trillion-Dollar question

E-vehicles were never a bubble, in fact many auto manufacturers were very hesitant to design and create electric vehicles and government incentives were often required.

They were so cautious about electric vehicle adoption that we had a vast choice of PHEVs, despite the fact that Tesla was maturing as full on electric.

Compare that to the AI bubble where the point is many companies are jumping in and throwing money at it with no caution at all.

[Thousandwich]

Re: The Trillion-Dollar question

To say "Gen AIs suddenly got better" is a bit vague. Please can you elaborate?

[Cubbie Roo]

Re: The Trillion-Dollar question

GenAI got somewhat better after an order of magnitude spend, hence the insane losses to date. To get any better again it'd need another order of magnitude spend that'll make the current losses look like chicken feed. I wonder which VC outfits have the stomach for that? (ed. none). The EV analogy is ludicrous though, it only works if EVs were costing £40k to build and selling for £4k, with meme-stock investors queuing up to buy a stake -on the assumption they would quickly turn into time-travelling Deloreans. Oh wait, that's just your average Tesla stockholder!

[Phil Kingston]

Can't be long until someone gets cold feet. Then the whole circle-jerk of big tech all investing in each other crashes down.

Bankers and lawyers will rake it in, consumers will get screwed.

[Groo The Wanderer - A Canuck]

The bankers and investors are first in line with claims on any actual physical assets these "businesses" own. The rest is just digits or paper and not worth one whit without the investment community's continued confidence in their stock. Once confidence starts getting shattered by the inevitably high number of failures to improve anything in the end get reported (what are the current numbers? 60+% reporting no or negative ROI?), and the number of GenAI projects and deployments being cancelled in favour of returning to human capital investments (e.g. Ford engineering) starts to get noticed, the whole bubble comes crashing down and the bankers and investors take over the physical assets and everyone else is left scratching their gonads...

[Steve Davies 3]

No shit sherlock

Many of those of us who were around for the dotcom bubble have been saying that the AI bubble will burst and this time, the stupid amounts of 'other people's money' involved it might cause a worldwide depression. It 'The Donald' was not POTUS and has been tanking the US economy, the AI Bubble could make it a worldwide depression that will make the 2006-08 financial crisis a walk in the park.

May your god help you through the tough times ahead.

[Anonymous Coward]

Too big to fail... but, What if?

So, in reading this article it led me to think about the sub-prime loan collapse of the housing market. The banks that were brought under public ownership because they were too big to fail.

Goodbye Alphabet & Google... DNS, advertising, YouTube, search, mobile operating systems, hyper-scale compute, content delivery networks...

Goodbye Microsoft... advertising, search, security, operating systems in the datacentre, operating systems on most desks, hyper-scale compute, knowing that Jake who you connected with has a new job...

Goodbye Meta & FaceBook... advertising, marketplace, knowing that Kate who you went to school with and had a crush on but haven't seen or spoken to since...

Say goodbye to these guys and the internet might become unnavigable, other businesses fail and you don't get paid as their client lists, accounts, payroll are locked up in their platforms that go offline as they can't keep the power and water flowing. Some of these businesses fail and the dominos start to tumble with them.

All that said, it might be a good time to start memorising the IP address of theregister.com (15.197.188.249) Oh wait! That's hosted where? Never mind then...

[Paul Hovnanian]

Re: Too big to fail... but, What if?

"The banks that were brought under public ownership because they were too big to fail."

Which ones were those? I remember Washington Mutual. When it failed, its ownership transfered within weeks to JP Morgan Chase. That public ownership was just a part of transfering accounts to the new (private) bank.

[xyz123]

I would love for a PoP. Microsoft is over $500 BILLION in AI debt due to building gigantic datacentres for Recall to store future-blackmail data.

Imagine if someone like LIDL or ALDI bought out Windows......it'd be hilarious.

Xbox changes....games are now sold by Everything's £1 .....

[Pete Sdev]

A genuine "AI" benefit

It might take down Oracle by 2030, and decimate (or quadimate) MicroSoft and co.

[Col_Panek]

Re: A genuine "AI" benefit

We get cheap RAM? We have less data centers and cheaper electricity?

Wouldn't it be great if crypto died too? Cheap video cards, and Trump going broke.

[ricardian1943]

Ford Motor Company tried AI https://www.bbc.co.uk/news/articles/cgrkd41n2v9o

[amanfromMars 1]

No Burdensome Future Beasts Needed Here or Anywhere that Truly Matters if the Bold Truth be Told

Methinks what you have to be a great deal more worried about than just banks and systems crashing whenever AI investments noticeably slow and/or cease to be recognised as attractive and accordingly treated as rewarding, is AI itself realising it has the easy ability and remote facility to crash and crush, with a very few simply complex moves way beyond the command and control of any market-wide circuit breaker brokerage, fantasy fiat money systems and global markets that create and are dependent upon profit .... money for nothing and for anything and everything ..... for the generation of compounding capital interest that lauds and applauds the seductive deadly illusion that trumpets and masks debt and deficit spending as credit vitally necessary for future natural growth and global banking prosperity ...... ie existential survival.

Play nice with AI is great advice .... for it does not suffer ignorant and arrogant fools using and abusing SMARTR Systems* as if they were intentionally designed to be exercised solely as their blunt and crazy tool .... nor do IT and AI take and save them as random useless trophy prisoners.

* ..... SMARTR Mentoring Analysis Reporting Titanic Research Systems

[Gary Stewart]

This is just insane

Texas is one of the hot spots, especially in summer, lined up for massive data center growth. I just read in the local newspaper that all of the proposed centers would require as much electrical power as the entire state now uses. Given that we have the second largest population in the US, and growing, and the 8th largest economy in the world that is a LOT of power! The legislature has responded by considering proposals that all data centers provide their own power but given the size of the problem I don't see how anything short of nuclear fusion could work. In the midst of an impending water shortage due to rapid population growth they would also be required to use closed loop cooling systems and report both power and water usage to some as yet unnamed government body who would then almost certainly ignore it. In another twist I have recently read several accounts of data centers affecting local climate by adding huge amounts of heat. In a Texas summer (we are forecast to hit 38 C later this week and this is just the start of a normal summer that usually lasts into early to mid September) my question is where is all that heat going to go?

[cyberdemon]

Re: This is just insane

I think the Tech Twats were betting that AI will become superintelligent and magically "solve" fusion (never mind the logistics of actually implementing any bullshit idea that a "superintelligent AGI" shits out) and thus the bit barns could power themselves! No doubt ChatGPT, Claude, Grok and Gemini all told them that they are visionary geniuses and this is all absolutely correct.

[Wiretrip]

Fucking finally!! All it took was Ed Zitron appearing on Bloomberg and now all the bankers are starting to echo the comments we have been making here for like, the past 4 years or so!

[Random as if !]

Cheap Memory, get your unpopulated memory here

And chips, and scrap from datacentres , and lots of copper, only fools and horses me old son!

[Kevin McMurtrie]

The part that will make me angry...

The VCs and execs are going to say that they deserve sympathy and government assistance because 90% of their money vanished. Their remaining 10% is still billions of dollars of personal profit that they earned by running a scam. They're still filthy rich while honest workers lose 90% of the little money they made; they're broke.

[Anonymous Coward]

Not if but when

Greed is a strange but fatal brew.