Western capitalism’s cycle of booms and busts stretches all the way back to Amsterdam and the Tulip Mania of 1636. They all follow the same pattern, and we are living in the end stages of one now with AI. Every single time, there are detractors who say this time is different; however, they have a four century track record of getting it wrong.
This week, yet again, we see a small Chinese firm with a fraction of the spending and resources getting the near equal of the frontier models Big Tech investors are spending trillions to achieve. Not only that, they are offering theirs to the world for free, and it uses a small fraction of electricity/computing resources to run. Those Big Tech investors will never earn those trillions back.
It might be bleak and depressing to contemplate, but people need to think about what happens after the crash. This is no time for centrism, or putting your fingers in your ears and saying you don’t want to hear about politics. The very worst people in our cultures, many Big Tech leaders themselves, are looking forward to this destruction and making their plans for it, and the world they want afterwards is a 100 times bleaker.
What comes after is pension funds going bankrupt, while the rich miraculously come out on top.
certainly there will be some failures although i don’t think large orgs are as exposed as in subprime. the ai market will end up being maybe a quarter of expected size so will only support a couple of players. the effects on the it industry will stabilise but people will be using AI so it will replace jobs
They come out on top because they have money and assets to leverage to borrow money in the downturn.