this post was submitted on 21 Oct 2025

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298

Is there any way the average American can insulate themselves from the AI bubble bursting? (piefed.blahaj.zone)

submitted 6 days ago by compostgoblin@piefed.blahaj.zone to c/nostupidquestions@lemmy.world

135 comments fedilink hide all child comments

The entire US economy is currently being propped up by growth in the AI/tech sector. And I am convinced that LLMs are fundamentally incapable of delivering on the promises being made by the AI CEOs. That means there is a massive bubble that will eventually burst, probably taking the whole US economy with it.

Let’s say, for sake of argument, that I am a typical American. I work a job for a wage, but I’m mostly living paycheck to paycheck. I have maybe a little savings, and a retirement account with a little bit in it, but certainly not enough that I can retire anytime in the near future.

To what extent is it possible for someone like me, who doesn’t buy into the AI hype, to insulate themselves from the negative impact of the eventual collapse?

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[–] moonluna@lemmy.world 9 points 6 days ago

Look up free land available for homesteading. There are several states in America that will pay you if you meet the criteria to move to them so that you can homestead and provide agricultural food. You don't need to be a farmer already, in some exceptions.

Stop using tech that supports or implements AI. Many people don't like something but still support the companies that do it. Stand on your beliefs and don't participate.

Start getting into self sufficiency.

[–] stopforgettingit@lemmy.dbzer0.com 4 points 5 days ago

Non-US countries are buying gold, this seems to be a good way to go.

[–] last_philosopher@lemmy.world 6 points 6 days ago

If you have a retirement account, it's probably in some sort of stocks. Be aware of what those are. Consider including some non-American index funds that are not particularly tech heavy. S&P index funds are significantly exposed to AI-related tech companies, and their usual safety is currently questionable.

[–] chazwhiz@lemmy.world 8 points 6 days ago (1 children)

I have no advice but I’ve been thinking the same way. I like LLMs, I use LLMs, but the “shove an LLM into every product and call it more valuable” approach is not sustainable and it will fail. Hopefully not as a full on bubble collapsing economy thing, but it’s only a matter of time (I’d guess a year tops) until companies have to start admitting to losses and investors start retreating.

Hopefully someone with some decent economic knowledge will drop some advice, but frankly I doubt anyone can do much better than guess (or parrot old advice) what will be least impacted. Intuitively tech stocks are the ones that will be hurt, maybe it’s manufacturing stuff that will stay more stable, but it’s all such a complicated web of interdependency who knows.

[–] brucethemoose@lemmy.world 8 points 6 days ago* (last edited 6 days ago)

It also depends what you mean by “hurt.”

Nvidia/AMD stocks, for example, are going to drop like meteors, but the physical companies themselves will be fine. They’re like the picks and shovels makers of the California Gold Rush; they’ve made their piles of cash and will go back to business as usual. Hence, I’m not selling my long-held AMD, even though I’m certainly not buying more. Yet.

And some totally unrelated companies may be disproportionately hurt by the pullback of a serious recession.

One comment I will make on LLMs specifically is it’s more of a “race to the bottom” than you’d think. Between sparsity research (with the recent MoE trend being a rather crude stopgap if you ask me), alternate attention schemes, finetuning advancements, computing shifts like BitNet all in the pipe, and all the open models from China and others, well…

The end point feels like local inference of specialized, freely licensed models. As useful, niche tools, not superintelligence.

They're low power basically free, hence seemingly inevitable.

That’s utterly apocalyptic if you’re someone like Sam Altman or Jeff Bezos. OpenAI can’t make money off that, which is why they’re lobbying to kill it and preaching infinite scaling that won’t work.

[–] Perspectivist@feddit.uk 6 points 6 days ago (5 children)

How did you handle previous stock market crashes, and why do you expect this time to be different? I’m heavily invested in the market, yet I’m not losing any sleep over the possibility of a crash - meanwhile, people who don’t even seem to invest are the ones worrying about it. I can’t help but wonder why that is.

[–] Asafum@feddit.nl 10 points 6 days ago (3 children)

people who don’t even seem to invest are the ones worrying about it. I can’t help but wonder why that is.

If I had to guess it's probably because those people, like OP and myself, have very limited funds so losing that investment is losing "everything" and putting them back to having nothing.

Having a very inadequate income makes losing your investments tremendously impactful as you know it will take many many many years just to get close to whatever level of investment you had before. We're counting on years of growth to make it something worthwhile, but if we get kicked back to nothing then by the time we catch back up to where we were the amount of time left to invest and grow is so much shorter.

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[–] brucethemoose@lemmy.world 8 points 6 days ago* (last edited 6 days ago)

Saving to invest is hard, sometimes. And finance knowledge/attention is finite. Some folks are at risk of drawing from investments after a crash.

And not everyone here was invested during the 2008 crash, and may have only experienced the ultra-bizzare COVID rebound.

I don’t mean to be rude, but there are a lot of legit reasons most of Lemmy is probably not into ultra long buy-and-hold investing.

[–] ProdigalFrog@slrpnk.net 4 points 6 days ago* (last edited 6 days ago) (2 children)

The Japanese stock market crash of 1987 only recovered in 2020. That's over 30 years.

If that happened in the US, the average american who invested in the stock market and is relying on a 401k to retire would be screwed.

[–] fodor@lemmy.zip 5 points 6 days ago

I would say Japan never recovered. The yen is weak, the cost of living is skyrocketing, and Japanese people have said in large-scale national polls that they struggle more to make ends meet than they ever have. Also, the rich are getting richer, and there are far fewer permanent jobs than there were two decades ago.

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[–] lechekaflan@lemmy.world 1 points 4 days ago* (last edited 4 days ago)

It makes me rage that even though I'm in a country thousands of miles away, its economy would be dragged down should economic collapse ever happens again in the US given heavy reliance on remittances from workers who are paid mostly in greenbacks.

The only glimmers of a chance of surviving such a catastrophe equivalent to tulip abuse would be not only investment in tangible goods and technical skills/trades -- short of becoming a prepper -- but also counting on policymakers' pragmatism to make my country more cooperative with its neighbors to cushion and weather the shock.

[–] AmericanEconomicThinkTank@lemmy.world 2 points 5 days ago

If you're worried about any economic downturn, you can very well diversify into even larger economic areas if you'd so please. How you do so is of course up to your own discression, given you can look towards different sectors, vectors of investment, and even geographic areas.

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