Why do we think it won't be worse? If you exclude the circular trading of AI companies from metrics, we're already in a pretty big recession, and that will only get worse if the AI companies collapse.

I’m circumspect that anyone knows how it’ll play out. I think there’s strong evidence a correction is coming, but some talking head is predicting it’s going to be this week every week, and have been for a while. Nobody has convinced me it’s likely to look like the Great Depression yet.

I also think the circular dealing fears in particular are overstated. Debt financing that looks like this is common in semicon, and I doubt there are any serious investors that haven’t already priced it in. If the bust is fatal for AI investment, it’ll just be bankrupt companies owing money to other bankrupt companies.

Anything that can't continue forever must eventually stop, but the market can stay irrational longer than you can remain solvent. I don't think there's a problem saying that there will be a crash but it's impossible to know when.

The longer a bubble grows, though, the worse it gets when it pops. According to Fed stats, we might still be postponing most of the crash that was going to happen in 2008.

If the AI boosters are right about what the technology will be capable of in 5 years, at least some of the big player’s investments will be literally the most profitable investments that ever happened. This is a potential mispricing, not a system inherently incapable of paying off long term like the subprime mortgages were. I don’t think another step-change like we saw with GPT2/3 is likely in the mid-term future, but I don't think anyone has shown it’s virtually impossible.

That's betting, basically, that there will be an oligarchy (multiple dictatorship) and the oligarchs (dictators) will be whoever owns OpenAI shares.

If AI turns the world into a dictatorship, what gives anyone the idea they'll just agree to share that dictatorship with their shareholders? They could just ignore company law - they're dictators!