Technology

I mean, he is not wrong per se, he just had the wong timing.

Looks like very mixed returns. Which is what you'd expect from a strategy of betting on areas that are significantly overvalued.

Maybe, but he's also been super wrong a bunch of times on his skitzo twitter account so grains of salt and all that. Not saying the guy isn't smart, clearly called one of the biggest systemic crisis of our times, but he struck gold once and struck out a bunch more often.

inevitable only in hindsight

I'm not so sure. I'm still friends with a guy who told me emphatically "you dont understand what we did, we destroyed the global economy" and then explained the whole subprime mortgage scam to me, back in like 2007. Lots of downstream businesses, new home builders, paint and drywall companies, building materials stores, started folding several months before the official crash as well. I wasn't nearly as aware of things then, I was a grown adult but not yet 30 and with little formal education, but there were definitely huge flashing signs. Only the media, based 100% on the words of the banks and insurance companies, thought that a crash was undetectable.

I'm not sure quite what it would look like yet, but I'm willing to bet if you look where these data centers are being built, when the cash runs out to keep the whole scam afloat, these big companies will stop paying their bills. The smaller companies providing services and supplies will run out of money before the huge mega corpos start showing signs, so that is one of the metrics I'm watching closely. I just happen to live in the shadow of these data centers so I'll be pretty close to it, that is if I'm right.

I think the idea is that, whilst shorting, you get squeezed. The question is not 'if' but 'when' and if it takes too long and you're $1B deep you can lose your shirt

I think, AI quality aside, it's mostly a matter of timing - IMO the AI bubble is obviously going to pop, NVIDIA's market cap is now 16% of the entire US GDP and OpenAI is trying to IPO at a trillion dollars, which seem like ludicrous numbers to me. But I learned from the last few years that you can also never really underestimate society's ability to just say fuck it and kick the can even further down the road.

And of course, SOMETHING is going to have to be the final straw that brings it all down, and it could very well be this. But I also didn't think we'd get this far - the 2008 crisis didn't do it, COVID somehow didn't do it, but these things are are also all compounding as we don't deal with them properly. And if AI is going to be the last straw, how long can we put it off for? Could it pop next year or can we still hold it off for another decade with even more ludicrous number-fuckery? I think that's where the trick is going to be.

everyone can see the AI BS right out in the open

To me it is four things in particular:

1. How AI use erodes skills in the subject AI is being used to assist in. This is a 100% occurrence, and has been demonstrated across all industries from software developers to radiologists. Most experience a 10-20% erosion in their skill set within the first 12 months of AI use, but others in the study groups have seen up to a 40% erosion in their skill sets.
2. How AI use shuts down critical thinking, and makes users more stupid. This is a 100% occurrence, and has been clearly demonstrated by MRI scans of the prefrontal cortex while users are actively using AI.
3. How AI use makes the user slower. This is the only user point that is not 100%, as only less than 2% of the most senior and skilled users show a slight increase in work completed… after more than 12 months of using AI. Projections have been made on the other 98%, and over 90% of them will never work faster with AI than without it, regardless of training or experience.
4. The gratuitous hallucinations, which are only increasing in scope and severity with every AI generation. It arises entirely from the constraints the AI are rewarded with - providing no answer is weighted just as negatively as a wrong answer - and anywhere from 60-80% of all responses are hallucinatory or incorrect in some fashion, depending on the current model.

In prior generations, any industry with such performance would be laughed clear out of the boardroom.

But because capitalism is desperately seeking a solution to what they perceive as a problem - how to obtain labour without having to pay said labour - AI is being adopted hand-over-fist.

After all, the underlying purpose of AI is to allow wealth to access skill while removing from the skilled the ability to access wealth.

And even if they solve some problems with AI and make them smarter, they still have to solve the "actually making a profit" problem to justify these share prices. LLMs already have some use at their current level, but certainly not for the price they'd need to charge to break even, let alone actually making a profit. If they double the smarts but double the training and/or inference cost, they'll still end up in the same place.

I still call it Twitter regularly.

To me, X is a windowing system.

That dumbass throwing away the Twitter brand for a damn letter should be proof enough to anyone that he's a moron

Edit: Redacted a mistaken identity

I'm not sure you understand what this article is or how our markets work.

The simple fact that somebody was able even to bet a billion is insanity that should never be possible to begin with. Nobody should have a billion dollars, let alone have so much that you can just safely bet a billion dollars

He doesn't have a billion dollars. He's a hedge fund manager that manages (at least) a billion dollars collectively of other people's investment money. Its that money he's betting.

Them he’s betting.yhst the economy will crash, basically, and we’re okay with that shit.

No, he's not. He's betting against only two companies: Nvidia and Palantir. He has a relatively small bet against Nvidia ($187.6 million), and HUGE bet against Palantir ($912 million). I'm not sure I'd bet against Nvidia yet, but Palantir is co-founded by Peter Theil, ~~trump's deputy chief of staff which job has a large influence on White House policy. If you ever watched the TV show The West Wing, this would be the Josh Lyman character's job.~~

We already know trump's favor swings widely and if politics are going against trump (as recent news show) then its not unbelievable that Theil might get the boot or at least trump would punish Theil by killing lucrative government contracts to buy Palantir services.

All of this should be illegal as fuck, and this guy belongs in a jail cell

The point of shorting a stock exists so that the market can express a view that they believe a stock will fail. This is an important "canary in the coal mine" for the rest of the market. The other option is a policy that you can't criticize a company with any meaning and investors continue to put money into failing/risky companies without this important indication of the risk.

Frankly I don't like your idea of jailing someone that says "The emperor has no clothes".

I don’t follow the AI bubble trend at all. But I have been seeing alot of videos all of a sudden, popping up in my recommended talking about it. Who knows.

A few banks started issuing warnings, and some of the "biggest upcoming launches" were extremely underwhelming, like Sora 2 and GPT 5. Not only that, but the companies going all in on replacing workers with AI are still not showing a clear return on investment, so this combination is making people more aware about the bubble.

I think Ray Dalio's take on it is correct. It's a consequence of currency devaluation, as people in general vote against the decrease in spending necessary to deflate the asset bubble. (1)