Earlier quoted context omitted.
People keep spouting this, but I don't see how the AI bubble bursting would be all that devastating. 2008 was a systemic breakdown rippling through the foundations of the financial system. It would lead to a market crash (80% of gains this year were big tech/AI) and likely a full recession in the US, but nothing nearly as dramatic as a global systemic crisis. In contrast to the dot com bubble, the huge AI spending is…
Isn't the dot com bubble a far better proxy? Notably, todays spending is both higher and more concentrated in a few companies that a large part of the population has exposure to (most dot com companies weren't publicly traded and far smaller vs MSFT, Alphabet, Meta, Oracle, NVDA making up most investment today) by way of pension funds, ETFs, etc.?
An AI bust would take the stock price down a good deal, but the stock gains have been relatively moderate. Year on year: Microsoft +14%, Meta +24%, Google +40, Oracle +60%, ... And a notable chunk of those gains have indirectly come from the dollar devaluing.
Nvidia would be hit much harder of course.
There is a good amount of smaller AI startups, but a lot of the AI development is concentrated on the big dogs, it's not nearly as systemic as in dot com, where a lot of businesses went under completely.
And even with an AI freeze, there is plenty of value and usage there already that will not go away, but will keep expanding (AI chat, AI coding, etc) which will mitigate things.