I feel like all these circular investments and no return investments that keep propping up the stock of AI and technology manufacturers are going to cause an absolutely massive crash in the next few years because it is so insanely detached from reality, they keep investing even though none of them even make a profit right now.
Do you think it will cause a massive economical crisis in the next few years and if yes, when do you think it will happen? I was hoping maybe there is a comrade here that has a bit more insight into this topic than me
The hype is absolutely insane at the moment with companies burning through billions without any clear path to profitability, and we’ve got startups raising $2 billion seed rounds without even explaining what they’re building. That’s peak dotCom madness right there.
What’s different this time around though is the scale of this thing. We’re talking about $400 billion in AI infrastructure spending this year alone, which is like funding a new Apollo program every 10 months. But the revenue is basically pocket change compared to the spending.
The reality check is already happening though. GPT-5 was a massive disappointment, 95% of corporate AI projects are failing to deliver returns, and nobody has shown a clear path to actual sustained revenue. Meanwhile the big tech companies are using various accounting tricks to hide how much they’re actually spending on this stuff.
The scary part is how much of the US economy is now tied to this AI spending. Data center investments are literally driving GDP growth, which means when this thing pops, it’s going to hurt way beyond just Silicon Valley. It’s an economic house of cards on the promise of intelligence that’s most likely not even possible with current approaches. The technology might be real and transformative long-term, but the market mania is running way ahead of the actual capabilities and business models.
The whole house of cards is propped up by this idea that AI will at some point pay for itself, but the math just doesn’t add up. These companies need to generate something like $2 trillion in AI revenue by 2030 to even break even on all this capex, and right now, they’re nowhere close. OpenAI alone is burning through cash like it’s going out of style, raising billions every few months while losing money hand over fist.
I expect that once it’s finally acknowledged that the US is in a recession, that’s finally going to sober people up and make investors more cautious. The VCs who were happily writing checks based on vibes and potential will start demanding to see actual earnings, and that easy money environment that’s been fuelling this whole boom is going to vanish overnight.
If a few big institutional investors get spooked and start quietly exiting their positions, it could trigger a full blown market panic. At that point, we’ll see a classic death spiral. The companies that have been living on investor faith, with no real path to profitability, are going to run out of cash and hit the wall leading to an extinction level event in the AI ecosystem.
When that all actually starts happening ultimately depends on how long big investors are willing to keep pouring billions into these companies without seeing any return. I can see at least another year before reality starts setting in, and people realize that they’re never getting their money back.