Financial watchdog fears AI spending bust could rattle markets, with mounting debt and cyberattacks adding to the headache

AI investment has helped keep markets and economic growth ticking along, but the IMF fears the boom could quickly turn to bust if the promised profits fail to materialize. With tech giants borrowing billions and investors piling into the same handful of companies, a selloff could leave more than just Silicon Valley nursing a hangover.

  • FiniteBanjo@feddit.onlineEnglish
    3·
    3 hours ago

    TBH I don’t see how it could take anything with it. The money invested will still exist except for interest on loans and unrealized gains which don’t actually exist because of overvaluation.

    This isnt like the mortgage crisis. Anybody who gets fucked over by this crash deserves it.

    In fact, the longer this is allowed to go on without crashing the more money people like Jason Huang siphons from pensions.

    • wewbull@feddit.ukEnglish
      5·
      23 hours ago

      2 exceptions to what you said.

      1. Whatever money raised through IPOs and other public investment is mostly the general public’s saving accounts. So far it’s just $80bn in the SpaceX IPO and $40bn from the bond issue they did shortly after.
      2. Just like the mortgage crisis it’s the banks holding the debt that’s been issued. Now since 2008 they were meant to firewall between their retail banking arms and their investment arms so that if they fucked up again the retail banks were safe. However this legislation got repealed in the US, so we could be looking at a bank bailout again to make sure the banking system doesn’t collapse with everybody’s money in it.

      The money loaned still exists, you’re right. Trouble is it’s not in the AI companies anymore. It’s been spent. It’s gone through them out to other companies (like Nvidia, MS Azure, AWS, Google Cloud, etc).