this post was submitted on 19 Nov 2025
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This bubble exists on paper, it's basically fake money that's been built up from companies sending IOUs to each other. It's insane to think we should bailout fake wealth they built of market speculation. When this does pop, it's not like the housing market where there is a ton of assets that exist. There's nothing there.
That's not entirely accurate. OpenAI is making deals to have chips produced, to have a data centers built, etc. Those are real things that someone has to pay for. Real debts. Their promises, in return, are just IOUs essentially, but real material debts are occurring.
OpenAI failing when the pop happens would mean nothing at all in itself. They don't produce anything unique of value. But their failure to make good on their IOUs to other companies that went into deep debts on their assumption of repayment, companies that make up a massively bloated chunk of the markets and national GDP, and companies that are producing American technology in direct competiton with China, that could have a disastrous effect on the economy and geopolitical affairs. That is, I think, what they are counting on.
Both OpenAI and the companies taking IOUs that they have no reasonable expectation to be made good on are just banking on the US goverment to pay out when the time comes. OpenAI isn't necessary to save at all, but its deals might be to prevent this coming crash. And if the government pays those debts, OpenAI survives and still gets to keep all of its stuff it bought on IOUs, free of charge, and the other companies got paid despite making a deal with a massively non-profitable company. They think that is a win-win. I think they need to be charged with tax fraud and let the companies fail. But... that's not going to happen under Trump.
Great explanation!
Made me finally realize that the US tendency to always bail out "too big to fail" is a huge mechanism enabling the outrageous speculative silliness in the first place, cuz there's not enough risk applying downward pressure on price.
This is probably obvious to folks, lol, but it wasn't to me. Net result is just that there's more logic behind absurdly high stock valuations (and not just limited to AI ones) than I previously understood.
the US's financial markets are left purposefully unregulated to facilitate "liquidity", read....taking $ from the world's gamblers. With the way MM's are setup and largely unmonitored...this means the US's stocks are purposefully ran up in proce specifically to drop them hard, to trigger emotional reaction-selling from those that don't know any better.
that plus a couple key differences in how option contracts work vs most other markets means the whole thing acts as one big fucking casino. all of this is by design, because the people running the US (big business) want regular cycles of boom and bust to take advantage of the working/(non-existent now) middle class.