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Is there any way the average American can insulate themselves from the AI bubble bursting?
(piefed.blahaj.zone)
this post was submitted on 21 Oct 2025
298 points (98.7% liked)
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I will be the contrarian in the room and say that you shouldn't really do anything different -- unless you know that you are going to need that money in the next year or two.
Let's take the S&P 500. Yes, we know there is an AI bubble, and the same 7 tech companies are knee deep in it. But it turns out that bubbles make money, until they don't. In fact, a good chunk of the growth in the S&P over the past two years has been in those 7 companies.. If you had made this bet 2 years ago, you would be a big loser now.
So what do you do? Don't panic sell. You can't time the market. Sell when you need the money for something else. Sell when you have a purpose. But don't be too upset when the bubble finally bursts, and it all dives 25% (or more!) . That was never real money anyway.
Normally I would agree.
But the weight of this one obviously hyped sector is measurably, historically huge: https://www.apolloacademy.com/wp-content/uploads/2025/09/ExtremeAIConcentration-090825.pdf
With a lot of “circular investment” reminiscent of previous bad behavior: https://www.axios.com/2025/09/25/nvidia-openai-investment-ai
Obviously don’t sell after a crash, or sell the absolute least you can to live; that is rule #1.
…But I think it’s prudent to save a bit extra and shuffle some investment out of the S&P 500 pre-emptively, as it’s starting to resemble an AI evangelism hype fund. I’m not that old/experienced, but I’ve never seen anything like this in the market, especially from my perspective in the ML tinkerer community where, ironically, it’s obvious how much this all stinks. All the academics know it.
Risk tolerance is definitely a thing and I'd argue being all in on the s&p500 is already poor diversification. Global broad market etfs would fare better. The worst thing to do regardless of tolerance or portfolio is selling at crash.
Here, OP is asking about their situation even if they have almost no investments. In other words, they're asking about the downturn on the national and global economy, and how that could make their life bad. Since it obviously can (through, for example, job loss or difficulty obtaining groceries), then some amount of preparation might be reasonable.
Another good question is what to do if you have medium-size investments and you don't want to see them tank. That's what you are talking about.
"That was never real money anyway." Rich people sometimes say that, but everyone else knows you're wrong. We save a percent of our paycheck every month to make sure we have money for retirement. We all wish we had guaranteed benefits, but that system was scrapped by greedy rich assholes decades ago, so now we are gambling that our savings will increase, because if they don't, we'll be working until the day we die... So if we feel like that money is real, maybe we're right.
And if you feel like the money isn't real, can you give it to us? Couldn't hurt, after all, because it's all fake.
I believe they're referring to stock money not being real money since regular citizens have no power over whether that money disappears overnight or not. only billionaires do. nobody is criticizing your personal savings and idk why you'd take it that way. although during depressions that money might become inaccessible as well due to mass cash withdrawals