Banks and AI bubble are probable fail points and could crash the economy
Posted by lostsailorlivefree@reddit | collapse | View on Reddit | 42 comments
The AI “circular funding” scandal is getting swept under the rug. The 5 biggest companies are buying each other’s products using stock, and they are all falsely pumping valuations. Bank are BLIND to the fraud, again purposefully blind. The Raring services are complicit- just like 2008.
https://finance.yahoo.com/news/bank-stocks-stabilize-as-new-earnings-ease-wall-street-credit-fears-155139503.html
Redditisfakeleft@reddit
Gemini told me this:
cr0ft@reddit
The fact the one thing that literally rules all our lives, "the economy", is such a fragile insane snarl it can be "crashed" never ceases to make my mind boggle.
I mean come to the fuck on, creating a non-competition based currency-less economy that's actually solid and predictable is the basic prerequisite for our species to survive.
But no, people just shrug and think it's normal that "banks" can "crash" the economy. Unreal.
Yokelocal@reddit
Things get especially funky when, as they inevitably do, so many dollars wind up in the hands of so few.
Then the weirdos go on tulip-bulb-buying kicks.
hereticvert@reddit
I think "but this time is different" is your signal that things are about to crash into the iceberg.
Yokelocal@reddit
Yeah, the stakes are higher. The geopolitical arms race that resulted from industrialization - the same headlong rush into resource competition that exploded into all-out global war twice has continued to expand, without the same degree of military violence.
It feels like a tidal wave has been building for 100 years or so
CorvidCorbeau@reddit
And it's not some mythical "maybe it will happen eventually" type of thing. I've been alive for 2 major economic crashes and I'm not even 30. We're on our way towards the 3rd one, likely still before I turn 30. It's nuts
hereticvert@reddit
You kids got fucked, for sure. Gen X just got ignored, mostly, and we've seen more than our share, too. Add in a few blown up/crashed into buildings and you see why we're all so damned cynical.
VirginRumAndCoke@reddit
Even if we take as given that the current system is poorly considered and dysfunctional.
What exactly are we going to do about it, huh?
I have rent to pay, so odds are you and I both are going to go to work tomorrow just like damn near everyone else.
The top 10% of earners accounts for >50% of the spending in the United States and other Western countries. We are not important to the economy anymore.
InternalAd9524@reddit
Your economic proposal will not work because you forgot you’re working with humans
fedfuzz1970@reddit
The difference between the 2008/2009 banking crisis and now is changes made to the Dodd-Frank banking laws. Following that big bail-out, Congress made changes in banking law that puts individual customers on the hook if a bank collapses. It's called bail-in. The government will no longer bail-out troubled banks. Banks are now allowed to reclassify deposits as credit obligations of the bank and customers as unsecured creditors. FDIC $250,000 insurance (per account) will help but in a comprehensive failure, that money may run out. We will have to depend on the Trump Congress to refund the FDIC. I wonder how that will work out? In a bank failure, unsecured depositors will be at the bottom of the list behind such folks as derivative holders. Two banks in Cypress did the bail-in in the late 80's with depositors losing over 60% of their money. Don't believe me, Google bail-in and find out.
hereticvert@reddit
We kicked out the last legs of Glass-Steagall during Clinton's last term. Dodd-Frank was just some band-aid over a bullet wound and it isn't going to do much of anything when this all shits the bed.
fedfuzz1970@reddit
They ain't your neighborhood banks looking to "help their neighbors and to keep the money in town" anymore. I'm still amazed at how their feathered their own nests so well and joined the ranks of the rich and famous.
ClassicallyBrained@reddit
Id be so upset at this if I had any money in the bank.
fedfuzz1970@reddit
How few Americans really know about this? The 2023 article in the Web of Debt blog mentioned that the people from government and banking alluded to only informing the people "with a need to know" when this was going to happen. This would give them a chance to move their money while the common folk once again paid the penalty.
ParisShades@reddit
That might be the only way people finally wake the fuck up and fight back.
ttkciar@reddit
Yup, the circular funding is keeping the bubble inflated, and will pop along with the wider economy when the next "AI Winter" falls.
People are aware of it, but it doesn't actually change what people think or do. Some people expect the bubble to burst, and this circular funding is just part of the story, while other people think the bubble will just keep growing and revolutionize the world, and this circular funding won't matter.
It's not "fraud" so much as spreading out anticipated revenue -- OpenAI is using the money they are anticipating getting from promised future deals and making agreements with AMD and other companies for subsequent deals. Since financiers include anticipated revenue in their valuations, this gives all companies involved a much larger apparent valuation.
We don't consider it fraudulent in other contexts, but it seems extra-hinky in this context because the numbers are so big and the deliveries so speculative.
rematar@reddit
Round tripping was a trick from the original tech bubble.
https://twitter.com/JG_Nuke/status/1755010726773600752
hereticvert@reddit
And people are going around saying this bust is going to be similar and leave us with a tech legacy like all those lit fibers in the ground when the original companies went bankrupt.
But a shit-ton of GPUs that might last two years in energy-devouring data centers ain't the backbone of the internet. This is another tech ponzi scheme and it's the only thing still moving in our mostly-dead economy.
Buckle up, kids!
poop-machines@reddit
But that's a lot of eggs in one basket
InternalAd9524@reddit
It’s the only basket left in town
ttkciar@reddit
Indeedy. If OpenAI oopses, the whole house of cards might come tumbling down, even though they're not the only player in the game (just the most visible).
We almost saw investors cut and run when DeepSeek published their ChatGPT-like model on a shoestring budget, ten months ago, because it contradicted Altman's narrative about progress through ever-greater hardware scaling.
It took a torrent of glib lies from Altman to talk the investors off the ledge. It almost went down right then.
PlausiblyCoincident@reddit
You don't even need OpenAI to go under for it all to fall apart. If there is a severe shock to any part of the processor manufacturing chain, it's likely the whole thing will unravel.
poop-machines@reddit
It is entirely possible that deepseek was stolen. It is strangely similar to one of openAIs older models in a way, it just seems like they worked on it and trained it more using different data to differentiate it.
The company was founded and they had a world renowned model extremely quickly. It came out of nowhere. That's not the usual pipeline.
Usually they release earlier models that are okay, then good, then better, and so on.
b4k4ni@reddit
While I concur in some parts, don't underestimate China and their workers. While we make fun of their gov., they have a intelligent and well educated workforce. There's a reason they get more patents for a good time now than most other countries. They aren't simple copy cats anymore.
That's also what should scare the shit out of us, but it doesn't.
IMHO it's not really about the model being stolen, but there were some Chinese scientist/ workers at companies like openai and those had gone back to China. They might not have stolen it per se, but know the basics and how it works. That's already quite enough to build your own AI.
Fine tuning takes longer :)
poop-machines@reddit
Note: all of this comment is hypothetical and I'm just making guesses based on circumstance, possibly.
Come on man, it benchmarks similar to openais model and workers worked at both, how is it not stolen? Also think how easy it is to just take the file if you have access.
Making your own AI takes a lot of data, where did they get all the English data from? Why is it so much better at English than Chinese?
Why does it respond in the same way as chatgpt, exactly, for some prompts? (Or rather, it did)
At a minimum they stole the exact same training data. But honestly they'd need a lot of computing power and time and do it in the same order as it affects responses.
I think they have an earlier snapshot of chatgpt and just trained it on some Chinese data and more data from investments that is more readily available in china due to less data laws.
I think it would be naive to say they didn't steal chatgpt. I think that's also why the investors didn't jump ship and also why deepseek hasn't been able to make any significant improvements (despite somehow overtaking chatgpt in such a short time).
Here's what I think they did: I think they were training under the radar using openais supercomputers and working on their own model based on an openai beta for chatgpt. Then they took it to china and created a company and released it. Sold their shares, got rich AF, and ofc they don't have any new models because they can no longer train efficiently. A pump and dump essentially.
Either that or it was Chinese espionage, but I think if that were the case they'd keep workers in openai because it's more valuable.
Dzejes@reddit
The whole AI machine stands on stolen intellectual property and now we are supposed to care about OpenAI being victim of a theft?
poop-machines@reddit
I mean I don't care
jackierandomson@reddit
Who's "we"? From where I'm standing they have the most competent and foresighted government in the world right now.
cooking2recovery@reddit
It’s all the eggs in an imaginary basket. We’re fucked.
SinisterOculus@reddit
The question is not if there ie a bubble, the question is how long will the powers-that-be prop it up-to simulate shareholder value.
EvolutionaryLens@reddit
...when they've secured their hoard
SinisterOculus@reddit
You and I both knows these executives and their shareholders think infinite growth is possible.
99ConsWith45@reddit
Can someone explain the main points of the ai bubble? Is it simply they aren’t making enough money? Or is it more than that
lostsailorlivefree@reddit (OP)
I’m no expert. AI Is predicted as you know to be THE thing- not just a new technology but a game-changer in every possible industry. There’s a mad race by companies and countries over things like capabilities and chip speeds and a bunch of other metrics… Some companies have significant revenues but certainly no where near the enormous capital outlays. Their are a few “bubbles” around AI- but a common one discussed is that the main 5- 10 companies stock price have soared- far out pacing earnings. Another 2, 3 dozen companies are also soaring based on partnerships or vendor relationships with the big guys. If you strip out the stock price gains of the Magic 7 (the 7 big names in tech), the rest of the market is just okay; these companies in AI are driving a lot of growth- the bubble part is because like any stock and market that keeps going up up up, well as they say “trees don’t grow to the sky”. One aspect of concern also is that the big guys have circular relationships with each other and those relationships might be further artificially elevating the stock price. I’m sure I got a ton wrong..
Visual-Sector6642@reddit
Ai will burn up once it runs out of water to use. Whole server farms fried. Good luck keeping it cool. We deserve everything that's coming.
lostsailorlivefree@reddit (OP)
Exactly. It’s a complex system that requires vast amounts of resources. I’ve heard: “the ai will make up service the machines” etc. uh, no
imminentjogger5@reddit
with no survivors!
tje210@reddit
They expect one of us in the wreckage, brother!
Winter_Screen2458@reddit
sounds like a classic Ponzi scheme to me
tropical58@reddit
China has no need to "steal" anything. Assuming that the seemingly sudden appearance of an AI programme at a competative standardard means it was not developed in china is just ignorant of the facts about its development. To americas disadvantage, china is capable of building or developing anything. The US actually is not. China is run by engineers, the US is run by lawyers and the greedy.
grassy_trams@reddit
"anyyyyy second now... SEE! RED! wait, no, those are tarriffs..."
laughing_at_napkins@reddit
Any fucking time now