this post was submitted on 10 Oct 2025
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The commentary on September 29 by Morgan Stanley Wealth Management’s chief investment officer, Lisa Shalett, frames the current market boom as a “one-note narrative” almost entirely dependent on massive capital expenditures in generative AI, raising questions about its durability as economic and competitive risks start to mount. Shalett’s critique came squarely in the middle of some people in the AI field — and many financial commentators around Wall Street —fretting at market exuberance and beginning to talk openly about a bubble.

In an interview with Fortune, Shalett said she was “very concerned” about this theme in markets, saying her office had broadened from a belief that the market would only bid up seven or 10 stocks to roughly 40. “At the end of the day … this is not going to be pretty” if and when the generative AI capital expenditure story falters, she said.

What’s more than a little concerning to Shalett is that one company alone, Nvidia—the most valuable company in the history of the world, with an over $4.5 trillion market cap—is at the center of a significant number of these deals. In September alone, Nvidia invested $100 billion in OpenAI in a massive deal, just days after pledging $5 billion to Intel (the Intel agreement was tied to chips, not data-center infrastructure, per se).

Fortune‘s Jeremy Kahn reported in late September on significant concerns about “circular” financing, or Nvidia’s cash essentially being recycled throughout the AI industry. Shalett sees this as a major concern and a major sign that the business cycle is headed toward some kind of endgame. “The guy at the epicenter, Nvidia, is basically starting to do what all ultimate bad actors do in the final inning, which is extending financing, they’re buying their investors.”

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[–] SaharaMaleikuhm@feddit.org 4 points 3 hours ago

But think of all the value AI provides lol

[–] Melchior@feddit.org 18 points 7 hours ago (1 children)

Now imagine a stock market crash and the government in shut down. So no stimulus for anybody.

[–] mPony@kbin.earth 2 points 5 hours ago (1 children)

now imagine billionaires imagining this years before you imagined it.

[–] Melchior@feddit.org 1 points 4 hours ago

There is a reason they buy bunkers in New Zealand.

[–] jenesaisquoi@feddit.org 46 points 11 hours ago (1 children)

I can't wait for the bubble to burst. The hype is so annoying. Yes LLMs are cool but they're not nearly as revolutionary as some think. They will end up as just another tool software developers can choose to make use of when appropriate.

[–] gigachad@piefed.social 22 points 10 hours ago (1 children)

we are so close to General AI bro trust me

[–] jenesaisquoi@feddit.org 12 points 6 hours ago (1 children)

Just one more ~~lane~~ GPU

[–] mPony@kbin.earth 4 points 5 hours ago

little bump... just a little bump

[–] randomname@scribe.disroot.org 20 points 10 hours ago* (last edited 9 hours ago) (1 children)

Shalett expanded on her concerns by saying that companies around Nvidia “are starting to become interwoven.” She noted that OpenAI is partially owned by Microsoft, but now Nvidia has also made an investment in the startup, while Oracle and AMD each have their own purchasing agreements with OpenAI. But OpenAI also has a data-center deal with tech giant Oracle ...

This. I fully agree with her comparison to the dotcom bubble around 2000 regarding the market sentiment, but the fact that markets are "interwoven" as Ms. Shalett frames it is much more relevant imo. And it reminds me more on the situation before 2007/08, when investment banks bought assets, securitized and sold them to the market, and then let their trading departments buying them back through the back door (Richard Bookstaber's seminal book, "A demon by our own design', is a highly recommended read on that. Mr. Bookstaber suggests that 'overspecialization' and centralization of decision making -often through ill-considered quantitative trading techniques- lead to vulnerabilities that eventually can force markets to collapse).

[Edit typo.]

[–] supersquirrel@sopuli.xyz 2 points 1 hour ago

Good point!

[–] Tar_alcaran@sh.itjust.works 32 points 11 hours ago* (last edited 11 hours ago)

Companies are buying GPUs and using them as collateral to buy more GPUs. All the while ignoring these are consumable products, not infrastructure, and all the while not showing a single dollar of profit. Because generative AI is a scam that has basically no profitable way of existing, and can't get people to pay for it no matter what they try

[–] supersquirrel@sopuli.xyz 36 points 12 hours ago
[–] biofaust@lemmy.world 4 points 8 hours ago

Well, I started for "patriotism", but damn am I happy I moved all my investments in EU-only ETFs years ago! Sure, the hit will be felt even here, but not nearly as much.