AI bubble could burst and take global economy with it, IMF warns

[u/CartoonistFar2036]

https://www.theregister.com/ai-and-ml/2026/10/13/ai-bubble-could-burst-and-take-global-economy-with-it-imf-warns/5302781

[u/pattydickens]

Either it bursts and ruins the global economy or it works as intended and destroys the need for labor, which also destroys the economy.

[u/mlody11 → u/pattydickens]

That's how I look at this too. Im really struggling to see how we come out of this without some sort of major calamity.

[u/StormyBlueLotus → u/mlody11]

So excited that I'll be living through like my fourth "unprecedented, once-in-a-lifetime" economic meltdown in the near future

[u/BadAdviceBot → u/StormyBlueLotus]

dot com bust, subprime lending bust....what's the 3rd one?

[u/atomwake → u/BadAdviceBot]

Covid?

[u/DinosBiggestFan → u/atomwake]

Considering prices never really went down from that, I think we're just feeling a compounding effect from it.

[u/Acceptable_Bat379 → u/DinosBiggestFan]

not just prices, but people's brains got destroyed by covid. the world went absolutely insane

[u/Imaginary_Scene2493 → u/DinosBiggestFan]

Prices rarely go down. Earning power usually catches up. If prices really went down across the board, that would be a depression, and that can be terrible because earning power collapses in turn.

[u/BicFleetwood → u/BadAdviceBot]

We scarcely go longer than a decade without a big crash.

Iran in the 70's.

Regan in the 80's.

92 under H.W. Bush.

Dot Com in the late 90's, early 2000's.

2008 under W Bush.

2020 under Trump.

The tech bubble won't last through 2030 at the latest.

Keep in mind, it's not just an "AI" bubble--it's the ENTIRE Silicon Valley bubble. Tech money has been going from one grift to the next for 20 years, and AI is just the current terminus of that money. Self-driving cars, metaverse, crypto, NFTs, broader blockchain, VR, the tech money has been bouncing back and forth for a long-ass time, always fleeing to the next "thing" before a product is ever actually delivered on the previous grift. Note Facebook's constant shifting from social media to streaming (Facebook pivot-to-video) to "metaverse" and then AI, never staying in one bucket long enough to actually do anything in that realm. The exact same thing has happened with Elon's companies, going from an electric car company, to that and a space company, and now to a publicly traded AI company that is outright retiring its primary launch vehicle because the stock money doesn't flow if you're not doing AI exclusively.

What's different now is the ENTIRE ECONOMY even beyond the tech industry is 100% all-in on not even "AI" or Machine Learning broadly, but specifically in LLMs, which are a fundamentally flawed technology being propped up as something it is not now nor will it ever be at the most basic technical level. LLMs are not a "neural network" or a pathway to simulated intelligence. They're auto-complete being run against the ENTIRE SUM OF HUMAN DATA EVER POSTED TO THE INTERNET, requiring a MASSIVE amount of energy and compute to run those predictive queries against that huge dataset. Their design is insanely inefficient and is only capable of producing the appearance of thought by raw probabilistic chance in the "millions of monkeys on typewriters" kind of way. And with every passing day, it will get more and more expensive to keep the monkeys at the typewriters. Economically, it is a doomed proposition, which wouldn't be a problem if we hadn't put all of our economy into it.

Also note: the substantive difference between a recession and a depression is whether the stock brokers are throwing themselves out of top story windows. The suffering of the working class is fundamentally the same, but we call it a "recession" if the rich people are still making bank.

[u/TerminalVector → u/BicFleetwood]

Gee maybe we should stop electing Republicans...

[u/CherokeeButtplug → u/BadAdviceBot]

If theyre a bit older, there was a pretty good recession in the 80s.

[u/Leather-Rice5025 → u/StormyBlueLotus]

Capitalism working as intended

[u/303uru → u/mlody11]

Delusional people across the board.

Boomers are ignorant to it or like everything else mistakenly think it won’t effect them so don’t care.

Younger generations seem to think their $10k-100k Wall Street bet in the mag 7 means they’re in the ingroup and thus are going to win here.

Some are deluded enough to think billionaires will decide to give us all UBI and let us pursue our passions, completely ignoring the fact that billionaires exist because they are psychopathic extractors.

[u/DinosBiggestFan → u/303uru]

Even if the population is given UBI, they're definitely not going to ever give you enough to own anything more than an incredibly tight apartment-pod, mass produced squeeze rations and no joy in your life.

There are people who think that UBI means you will be able to just go after art, or tech, or be able to game your whole life away and have your needs taken care of. That's just a utopia that is never going to be realistic, and with AI attempting to accelerate the destruction of most types of jobs (it is pervasive in every industry in some form and expanding rapidly) you won't even have the chance to supplement it.

I mean hell, with Jensen talking about how reading and math will be optional and unnecessary, you can already see where they're trying to aim the population. The UBI will be just to keep us off the streets and if not comfortable, slightly placated. After a couple generations of this, we will have people who know no better because they and their parents have lived through no better.

Any dystopian story you can think of ends up starting with this sort of strategy. The pieces, the story beats, the names might all be different. It might not be AI, it might not be billionaires, it might not be X/Y/Z, but the concept remains. A controlled, subservient population who is reliant on the hand that feeds them and is trained not to bite for fear of losing that "privilege".

The Expanse (the books) have a good take on UBI. It's just called "Basic Assistance". There's not a lot of joy, not a lot of things you can do with it, not a lot of freedom to pursue anything. Not even sure if there is a way to change the course, but I'd have to read back up on it again. This is a more realistic expectation with how a UBI would go.

[u/Olangotang → u/303uru]

Let the billionaires flee to their bunkers then bury them in them. These people don't server a purpose except to harm the species.

[u/_Thermalflask → u/mlody11]

But on the bright side, for the time being it makes green line go up

[u/Sarquon → u/_Thermalflask]

https://isaiprofitable.com
not so much

[u/The_Sleep → u/pattydickens]

This is why everyone behind this has a bunker in new zealand. For when shit hits the fan and we're angry enough to eat them.

At that point though, sealing the bunker up from the outside might deter others from this sort of fuckery in the future.

[u/FamousMortimer23 → u/The_Sleep]

And they hire people like Douglass Rushkoff to help them answer the question “how do we ensure security forces will remain loyal to us?” and he says “by not destroying the world they will have to live in while guarding your bunkers and paying them a living wage, you morons. I thought we were gonna talk about cool things to do with all your money for the future.”

[u/IrregularPackage → u/FamousMortimer23]

it’s crazy that they haven’t figured that out by now. “how to keep soldiers loyal” is a solved problem. give them a good life. it’s that easy.

[u/Lemonwizard → u/IrregularPackage]

2000 years ago, Julius Caesar pretty conclusively proved that treating your soldiers well can make them fiercely loyal to you. So loyal they'll fight to make you ruler of the world.

Even though Caesar spread most of the plunder from the Gallic conquests amongst his legions, he still had plenty left over for himself and was one of the richest men in Rome.

These billionaires could pay their guards a million dollars a year right now, which would be a pittance compared to their income, and those mercenaries would be just as loyal as Caesar's legionnaires were.

[u/FamousMortimer23 → u/IrregularPackage]

“But then I’ll only have 3.5 billion dollars instead of 5. Nah, let’s go all in on robits.” 

[u/Kizik → u/FamousMortimer23]

"Haha, no. We're using mandatory shock collars."

[u/Cyrotek → u/The_Sleep]

I'm always wondering what exactly the point of the bunker plan is. Sit in there all alone for who knows how long? Because nobody in their right mind would keep working for these morons if money isn't worth anything anymore, meaning they couldn't trust anybody to not just put a bullet in their heads.

[u/wcg66 → u/Cyrotek]

These people are surrounded by yes men all day everyday. They probably think their bunker posse will remain loyal because of their yearly stock award.

[u/Whales_Are_Great2 → u/wcg66]

Yep, some of Palantir's higher ups have started taking up smoking because they're so convinced that AI is going to find a cure for all types of cancer in the future so they won't have to worry

[u/DukeOfGeek → u/Whales_Are_Great2]

Idiots. As an aside though my head canon for Sci Fi movies Like Alien and Outpost where everybody smokes like chimneys all the time is that by 2070 cancer is cured by a vaccine and Emphysema is cured with an inhaler. So The Company just gets all the miners and spacers addicted again because, profits and control.

[u/Dragonsandman → u/Cyrotek]

The likeliest outcome of those bunker fantasies is that the people they give the guns to turn on them, who in turn may try to lord over any local New Zealanders in their general vicinity. Another possible outcome is that their attempts to stop that will make their armed guards awful at being armed guards, which would sooner or later result in locals and/or whatever's left of a government in New Zealand rolling in and seizing their shit.

[u/DukeOfGeek → u/Dragonsandman]

New Zealand has an Army, Air Force, Navy and Marines.

/apparently they outsource most of that to Australia. TDIL. Thankfully mega-oligarchs don't have access to mercenary armies. /s

[u/joshwagstaff13 → u/DukeOfGeek]

We don't have marines.

[u/pitterbugjerfume → u/pattydickens]

This has been my thought all along. If we are so lucky to not have to work anymore because of AI, who is going to pay the bills? Seems so blatantly obvious, but i don't hear anyone questioning this?

[u/ChemistryQuirky2215 → u/pitterbugjerfume]

Because no one really has an answer for what happens when 50% (or more) of the labour force are no longer required.

I sense a very divided future with those getting paid from jobs relating to AI and a sub- economy which activity encourages human labour

[u/MrFlibblesPenguin → u/ChemistryQuirky2215]

Oh they absolutely have answers for that, theyre just somewhat unpalatable.

[u/PerpetuallySticky → u/pitterbugjerfume]

I mean the realists know a Universal Basic Income is essentially the only way we can manage to sustain both the economy as we know it and the general population’s livelihood.

Realists also know the world is controlled by money and if we can ever implement UBI it will be at minimum 10 years after we should and countless people will have suffered by then and the damage will be done.

Either citizens take the reigns again somehow and make change or we are in for a long road of slow bleeding until something snaps

[u/StormyBlueLotus → u/PerpetuallySticky]

It's kind of like how minimum wage has been laughably low for decades, and goals that had previously been pushed for and criticized as unrealistic (e.g. $15/hr) are now crazy low amounts to try and survive on.

[u/RinzyOtt → u/StormyBlueLotus]

(e.g. $15/hr) are now crazy low amounts to try and survive on.

This is the base pay for Walmart. You know, that company famous for being the company with the largest amount of workers on welfare programs.

And there are still places that pay below that.

[u/Dick_Lazer → u/pitterbugjerfume]

That's the fun part. You just starve to death, and the elites inherit the world.

[u/theamathamhour → u/Dick_Lazer]

i feel like many would die in some sort of rioting/civil unrest, but out of fight for food, so I guess same thing.

[u/CircuitRange → u/pattydickens]

The classic corporate blind spot: automate everyone out of an income, then wonder who is supposed to actually buy the products.

[u/emlgsh → u/pattydickens]

If it makes you feel any better, the fact that it can't work as intended is why it's going to burst and ruin the economy.

Or more accurately that major players in the global economy bought into (or were bought into, not all that heavy spend was on datacenters and chips) the promise of what it would (and can't, and never will) achieve.

It wasn't Theranos level snake oil but the people selling it overpromised well beyond limitations based on the assumption that truly ridiculous hardware allocation and basic R&D would tighten up its inaccuracy problem.

Unfortunately the problem scales right along with enhanced processing capabilities of the infrastructure (which is to say you're not getting fewer errors, er, "hallucinations", but you are getting them faster alongside the good results) and lack of progress on the R&D front seems to suggest that these limitations may be indelible to the technology.

But it's going to be ugly - hundreds of billions of both actual (er, as actual as money is these days) money has been fed into it, and further hundreds of billions of goods and services have been handed over to AI firms on promises that they'll totally pay fair market value and then some when they inevitably achieve profitability.

All of that money and labor and physical products will essentially have to be entirely written off when the promised checks inevitably bounce.

[u/DoctahDonkey]

Best part is how there is no good outcome for this. Either the whole thing comes crashing down and we're left to sift through the ash and dust of a scorched economy, or they succeed and AI replaces jobs at such an unprecedented scale that the entire economy falls apart because no one has any money to put into said economy.

Oh, and we had no say in it either. They just pushed this tech along whether it was a good idea or not, because they're in control. Now we get to deal with the cataclysmic aftermath of however this goes.

[u/Aggravating_Teach_27 → u/DoctahDonkey]

This is what I find dumbfounding about this tech 'revolution'.

Why embark in something that will destroy the economy no matter how it develops?

The only answer I've come to us that the rich no longer want to be richer. They'd rather be owners of humans and for that is not enough that they are c rich, they need us poor, desperate and our labour devalued too nothingness...

This is about neo-feudalis., with the techno oligarchs as Kings and nobles.

Supporting this AI revolution is insane for any person who's not an oligarch (it's quite insane for oligarchs too, but at least they can dream of having the better seat to the dystopia they are creating).

[u/Chris_HitTheOver → u/Aggravating_Teach_27]

There is no “richer” once you’ve reached the perverse amounts of wealth American capitalists have.

So, logically, all that’s left is more power. We’re seeing what that becomes in real time.

[u/radioslave → u/Chris_HitTheOver]

I think it's almost deeper than that in the sense of engrained capitalism. When you have earnings that need to increase every quarter, every year in order to justify a stock price, or a buyback or just the inherent definition of running of a business in a capitalist economy. We've hit a point where company valuations and P/E ratios are so insanely inflated that there's no amount of innovation that could justify them so what do you do?

Companies are handed this gift in the form of AI which is both speculative, ever expanding and has the ability to decimate your payroll to help increase your profit margin and keep feeding the machine and buy you another few years of time in the sun.

At this point everyone and their mom can tell a major economic downturn isn't a matter of 'if' but a matter of 'when' when you factor in rising inflation, US debt so out of reach that it's a meme, a USD being propped up by the price of oil and the petrodollar, bond yields, the japan carry trade eroding and fed data that people have essentially lost all trust in since the removal of the data chair and the constant revisions.

It seems like the economic implosion is essentially the bear attack theory and as long as you aren't the slowest one in the pack you can avoid being eaten. It's why we're seeing the S&P and Nasdaq more or less being propped up by the valuations of the large caps and while we're in the process of a market attempting to broaden, small caps are getting smoked in the process.

It's going to be a very interesting resolution, however it ends. It certainly seems like the powers that be are just trying to stay afloat as long as they can.

[u/rcoelho14 → u/Aggravating_Teach_27]

This is about neo-feudalis., with the techno oligarchs as Kings and nobles

I mean, it's not like they are even trying to hide it.
They said it out loud, people like Peter Thiel and Musk follow the "teachings" of Curtis Yavin who says that they need to abolish democracy, carve up countries into territories controlled by tech bros, in a techno feudalism era, they are funding parties and movements that are trying to collapse western democracies.

They couldn't be more transparent than that

[u/DesperateStock6302 → u/Aggravating_Teach_27]

A return to slavery has always been the goal for capitalist since 1848

[u/rdunlap1 → u/DesperateStock6302]

I have a hard time disagreeing with this. I think at this point it’s pretty clear that the richest of the rich of this world are the same type of people that would own slaves if they were allowed to do so

[u/EbonBehelit → u/Aggravating_Teach_27]

Why embark in something that will destroy the economy no matter how it develops?

Let me put it this way: it's blind greed and stupidity.

The companies pursuing this tech know that the economy will collapse if every company replaces its entire workforce with AI. They all know this. And yet, the potential profits that AI represents are so unbelievably vast that they're all pursuing it regardless, blindly hoping that at least some of their competitors aren't doing the exact same thing.

[u/Purplociraptor → u/Aggravating_Teach_27]

They don't want to own humans. They want to be the only humans left. They want to be the gods to their subordinate robot population. The goal is for the poors to die off.

[u/addista → u/Purplociraptor]

DING DING DING. Who gives a fuck if we all starve to death if the rich people have their robots and tech to do everything?

[u/FlamboyantPirhanna → u/DoctahDonkey]

Also we shouldn’t have allowed the stock market to basically be ‘the economy’. Why is a glorified casino the main determiner of our lives?

[u/swattwenty]

Don’t threaten me with a good time

[u/mediandude → u/swattwenty]

192GB of RAM costing 200 USD or EUR would be sweet justice.

[u/userrr3 → u/mediandude]

Best I can do is bury them next to the ET Atari cartridges and double the prices for new ones

[u/rebbsitor → u/userrr3]

Best I can do is bury them next to the ET Atari cartridges

They actually dug those up 13 years ago and auctioned some off. Guess we can look forward to that with RAM in the future.

[u/The_MAZZTer → u/mediandude]

For context when I built my current PC a year or two before prices started going crazy it was ~$250 for 64GB. I checked a couple months ago for the same model of RAM sticks and it was up to over $900.

[u/mattindustries → u/mediandude]

I would just love to have an upgrade to my 512GB server, but definitely not at current prices.

[u/Civil-Science-4126 → u/swattwenty]

At this point, these companies are fucked if they don't succeed at replacing every white collar job. I would rather a financial meltdown than them actually succeeding at creating AGI. If they create AGI under the current arms race conditions there's no way it will be aligned, ASI will emerge and then we're all fucked in a few short years.

[u/DukeOfGeek → u/Civil-Science-4126]

The fallout from their collapse is infinitely preferable to them actually completing their working shiny robotic boot to stomp on everyone's face with forever.

[u/ShiraCheshire → u/Civil-Science-4126]

If it helps, we’re nowhere near agi. Anyone trying to convince you otherwise is trying to sell ai to you.

[u/Sudden-Wash4457 → u/Civil-Science-4126]

it's fundamentally not possible with the current techniques to create AGI

[u/raptorsango → u/swattwenty]

Glad to know my kids will subsisting on soup next year for… checks notes.. I’m being told it’s for no reason at all/some weird chat bot tulip mania that became of interest after bitcoin scams couldn’t be properly scaled up.

[u/Purplociraptor → u/raptorsango]

Don't forget about NFTs

[u/TAV63 → u/swattwenty]

Agree, ai companies taking a big hit would not be as bad at it sounds. Let it happen.

[u/Shades1374 → u/TAV63]

The damage will waterfall into ... a lot. It's gonna suck for more than just AI companies

That said, I still agree - and better sooner than later.

[u/MykeTyth0n → u/TAV63]

Needs to happen now preferably.

[u/bargu → u/MykeTyth0n]

As soon as possible, the longer this clown show goes the worse it's going to be.

[u/mxzf → u/TAV63]

The sooner we get it over with, the better too.

[u/EnfantTerrible68 → u/TAV63]

My thoughts exactly 

[u/willismthomp → u/swattwenty]

We can call it the great reset and rebuild things better. Let’s make lemonade with all these lemons.

[u/mxzf → u/willismthomp]

"Have you tried turning it off and on again" for the economy.

[u/Actual-Feed-9739 → u/swattwenty]

A global economy crash is not going to be a good time my guy. I don't know why people think this.

[u/kuz_929]

Why is it always everyone else's problem when billionaires' investments fail? Why do us peasants need to care at all about propping up their profits? It's stupid. Let them fail. Let the bubble burst.

[u/Plane_Discipline_198 → u/kuz_929]

If you lose the bank a thousand dollars, that's your problem. If you lose them a million dollars, then it's their problem.

Something to that effect.

[u/cive666 → u/Plane_Discipline_198]

Except now it's trillions of dollars.

If the ai companies stop borrowing they go bankrupt because they are not profitable right now. If the banks stop lending them money they go bankrupt and now the bank has a problem because they won't be paid back.

So the banks can't stop and the ai companies can't stop.

The tax payer will be left holding the bag

[u/Implausibilibuddy → u/Plane_Discipline_198]

What I don't understand though is that the same stuff we needed/wanted pre AI is still going to be required after a bubble bursts. Yeah a lot of companies and banks will obliterate themselves due to the debt they've taken on to invest in it, but that doesn't mean the world will stop needing to trade stuff. And there will be banks and companies that either weathered the storm because they didn't bet on the same dead horse, or because they came into existence after the pop. Why is this such a world shattering event? Worst case scenario, couldn't we just all agree that dollars are just useless bits of paper now but these bottle caps are pretty shiny.

[u/Oh__Archie → u/kuz_929]

Because we are how they became billionaires. We did the work.

[u/stridersubzero → u/kuz_929]

Socialize the losses, privatize the gains

[u/smartello → u/kuz_929]

Too big to bail is about to become a new hot slogan.

[u/rkozik89 → u/kuz_929]

Because index funds which includes part of your 401k have to buy up the AI-related stock because that’s how index funds work. When the AI bubble pops your 401k goes down with it. If 40% of the economy is propped up by AI stocks upto 40% of your 401k’s index funds go bust. Don’t be surprised if your 401k drops 25% in value when shit hits the fan.

[u/Bromance_Rayder]

Here's the simple thing I have never been able to understand. For these insane investments to ever pay off, hugely significant employment reductions would be required. Which would completely upend our basic social order. So either it fails or the world as we know it has to change more rapidly and significantly than ever before in human history?

[u/The_amazing_T → u/Bromance_Rayder]

Feels like we've 'pinned our hopes' on AI helping our society in ___ way.. -Like I get that AI can do human things quicker, but how does it "Save" us? It replaces us. It makes some things more.. efficient or cost-effective, but doesn't make our lives better in real tangible ways. A homeless person isn't helped off the streets by AI. My rent doesn't go down. I'm not getting ANY of the benefit, aside from turning in my reports quicker, which no doubt the boss will demand from here on out.

It's a fucking vampire. I didn't invite it in, but my dumb-ass cousin Elon did. And now it's gonna feast on us for.. reasons. I'm not talking about the environmental issues, which are real. I'm talking about: It's existence is in opposition to my existence.

[u/WonderfulVanilla9676]

At this point, f*** it. I want all these fat cats in the AI industry to collapse and there needs to be an administration in charge that will not bail them out.

[u/za72 → u/WonderfulVanilla9676]

economy will collapse with all the bag holders and those who punched out early will pickup the pieces pennies on the dollar... I've been though a couple of these once in a lifetime economic catastrophes

[u/Rooooben → u/za72]

It’s all fun until you are on a countdown until forced retirement and what you have saved is all you got for the rest of your life.

[u/broguequery → u/Rooooben]

Well that's not fun either...

Almost seems like the whole thing is a bunch of bullshit

[u/Pooleh → u/Rooooben]

I'm 40 years old and destitute. I'll never retire so I've got nothing to lose. Bring it on!

[u/PorkVacuums → u/Pooleh]

Let's be honest. They were never going to let millennials retire. They want us to work till we're dead.

[u/BigPharmaSucks → u/PorkVacuums]

Bill Gates says new Alzheimer’s tests could keep people on the job into their 90s.

[u/PorkVacuums → u/BigPharmaSucks]

I run a handyman company. I should not be working until I'm 90 lol. I'm going to die climbing a ladder to change a lightbulb

[u/kendalloremily → u/Rooooben]

my retirement plan is dying in the water wars, so whatever 

[u/ExpensiveBookkeeper3 → u/za72]

So you will capitalize? Honest question.

[u/za72 → u/ExpensiveBookkeeper3]

if you have the capital :) - that's the real trick

[u/crash_over-ride → u/za72]

I've been though a couple of these once in a lifetime economic catastrophes

Please tell me you're at least old enough to drink.

[u/za72 → u/crash_over-ride]

in this economy?!

[u/DarkFantom → u/WonderfulVanilla9676]

This isn't just a singular administration problem. Literally all 3 branches of government need to be removed completely and replaced by people who either have PHD's that were earned via real results, or filled by people who haven't made more than 200k/yr in their entire lives. Our entire system of government is corrupt down to the bone and this administration has only made it too blatantly obvious to ignore.

[u/Ok-Replacement9595 → u/WonderfulVanilla9676]

Our insurance companies and pension funds and retirement ETFs have already bailed them out. We will all hold the bag one way or another.

[u/btoned → u/Ok-Replacement9595]

This. I swear do people not realize our investment accounts fund all these public companies whether directly or through ETFs.

[u/gravteck → u/btoned]

I would recommend everyone look at their 401k allocations. I can see the composition on one of my vanilla, managed equity funds, and its Mag7 and gang all the way down.

[u/misterxboxnj → u/gravteck]

I changed mine recently to bond funds I doubt that will protect me much but it's better than nothing. My worry is I'm to early.

[u/fruitpunchsamurai619 → u/WonderfulVanilla9676]

Rich gets to buy stocks on discount. This is always good for the rich. This is why they always want to relax regulations and cause financial crises.

[u/Special-Reaction2029 → u/WonderfulVanilla9676]

Fuck it was my thought exactly. Most people have been left behind by this "economy".

[u/thewindows95nerd → u/Special-Reaction2029]

Right? Many people including myself have been laid off while having a troubling time finding new work while the world paints it as if the economy is booming as the price of many things especially RAM is just ballooning. I'd rather just have the economy tank and stop with this false pretense.

[u/codemonk → u/Special-Reaction2029]

That's the wonderful thing about having nothing - I have nothing left to lose.

All I have is a supply of popcorn in preparation for watching this all fall down.

[u/aturretwithtourretes → u/WonderfulVanilla9676]

Thats the issue, the companies might fall, the employees might suffer, we might suffer... but them? Nah, golden parachute to the rescue.

[u/likwitsnake → u/WonderfulVanilla9676]

Fun fact, they just updated the 'Trump Accounts' to now allow for individual stock donations, so companies like Dell, SpaceX, etc. will donate a bunch of shares then if they are ever in trouble they can claim their company being hurt and going down in value will hurt the children of America therefore they need to be supported or receive special treatment.

[u/mex2005 → u/likwitsnake]

Yeah i dont think they need an excuse to bail out mega corps. We are cattle, even if they tell us to wuck a dick while their bailing then out its not like we are gonna do anything about it.

[u/Paceys_Ghost → u/WonderfulVanilla9676]

That's the thing. The big tech companies are too big to fail. There's no way they don't get bailed out. High Inflation is just here to stay one way or another.

[u/Kage_0ni → u/Paceys_Ghost]

If it's too big to fail it's too big to be private.

Nationalize every bailed out company.

[u/Paceys_Ghost → u/Kage_0ni]

I'd be good with prosecuting executives that mislead the public and warrants for the government so there can be profit on the bailout.

Unfortunately, if someone incredibly distrustful and corrupt were to become president, nationalized corporations can become quite problematic.

[u/Dreaminginslowmotion]

I know a few people at the Big 5 consulting companies and their roles are exploding in AI consultants (nearly 80% of their roles for 2027). I can tell across the board it's definitely fueling money into many corporations (or going all-in on spend).

My questions are:

1) What happens to the explosion once one or two company come out the clear victors of the AI race?

2) What happens to the world if there is a devastating AI event that 100% makes humanity do an about face on the AI

3) Our CEO has said we've only hit the tip of the iceberg for the sheer power need AI datacenters have to have. This would include adding nuclear power and increasing nearly 10x what we already have put down.

All of it feels like a shaky jenga tower being built.

[u/box-art → u/Dreaminginslowmotion]

In Finland they took down 570 acres of forest just for one data center project. This isn't sustainable by any measure. If the AI bubble doesn't burst, then it'll consume the world.

[u/BoredTech127001 → u/box-art]

Paperclip problem, it's all just going to be paperclips (AI data centers).

[u/Goeatabagofdicks → u/BoredTech127001]

Clippy………. WHY?!

[u/Barkalow → u/Dreaminginslowmotion]

we've only hit the tip of the iceberg for the sheer power need AI datacenters have to have

I feel like thats the next path forward though. All the companies right now are using brute force compute because its easier to stand up while they all race each other to be the next google/amazon, but obviously that can't go on forever. So it seems like making AI more efficient is going to have to be the route eventually

[u/Dreaminginslowmotion → u/Barkalow]

My wife starts interviews with a new company that is rising in venture / startup that uses ocean water waves to power floating balls for datacenters use. It was a pretty substantial amount of power they can produce as well when batched together

[u/AdCalm6208 → u/Dreaminginslowmotion]

Wave energy has been around for a while, it's a hard one to crack properly. Tidal is working though. Make sure she asks what their runway is, a startup is risky business right now, make sure her job is actually covered and not by "potential investors".

[u/paradoxpancake]

It honestly probably needs to happen so people realize how much insider trading and illegal shit has been happening globally so that nations start cracking down on those responsible.

[u/shortymcsteve → u/paradoxpancake]

How did that work out in 2008?

[u/paradoxpancake → u/shortymcsteve]

Lead to legislation in the US that did eventually get overturned indirectly because of Citizens United. It did lead to something, and then evil started winning again.

Tale as old as time with humanity. Better than being nihilistic.

[u/Ghede → u/paradoxpancake]

Here's how the global economy works:

Rich people buy shit, they make investments, buy property, buy companies, etc.

They use the shit they buy, or their rewards for owning shit (stock options for owning a company), as collateral for loans.

The loans are debt, so they are untaxed. They are rich so they are considered 'low risk' so they get very good rates on those loans.

They use the loans to buy more shit. Anything that they own that pays a dividend goes to paying off the interest on the loan. Anything that generates an asset goes towards getting more loans.

An investment doesn't pay off? A company goes under, that's okay, they can get more to put up for collateral to replace it.

Their assets aren't really worth what someone would buy it for. They are worth whatever is needed to be useful as collateral. A company has dogshit financials? That's okay, it needs to be worth a trillion dollars because otherwise the entire finance sector collapses because they gave out trillions of dollars to a hundred billionaires backed by nothing but that fucking toilet paper they call stock. At some point, the finance sector starts buying the stock just to prop up the price for a little longer, and find ways to offload it to people who had no choice in what to buy. Bundle them up in ETFs, and 401ks. That's when it's going to collapse, when they've offloaded the risk.

[u/ETucck1]

Right now these companies are playing with monopoly money as all of those AI companies haven't profited yet. The question is what is it going to take for the first domino to fall? I keep hearing that we are in a bubble and I can see glimpses of it, but the truth is right now the markets continue to go higher after a few months.

[u/Kamel-Red → u/ETucck1]

What they're not telling you in mainstream news is that the dominos are already falling. Debt payments are being missed, rates are up, capital is still being lit on fire at alarming rates with no hope of return meeting obligations.

[u/New_Outlandishness15 → u/Kamel-Red]

Got any evidence for those claims?

[u/GiantWackySkeleton]

GENUINE QUESTION.

Why have we constructed a civilization in which the failure of an investment can threaten the well-being of people who never made that investment, when the actual resources necessary for their survival haven't disappeared?

I think the deeper tragedy is that we've built an economy in which we can accurately predict that a financial crisis will hurt millions of innocent people, but we so often discuss that vulnerability as though it's an unavoidable feature of nature rather than something human beings could choose to redesign.

EDIT:

I want to take this a little further than just asking a question.

I'm just a guy. I love voice acting, I've dabbled in animation, I love creating things, and I have a deep passion for helping people.

I'm also genuinely terrible at asking for help myself.

I've struggled. I still struggle. I'm not above any of this, and I'm certainly not immune to the circumstances I'm talking about. I know that sometimes life takes everything you've got just to keep your head above water. Sometimes getting through another day is all you can manage, and that's enough.

But I don't believe we have to resign ourselves to a world where that's the best we can hope for.

And I don't think we have to wait until we're wealthy, powerful, or have everything figured out before we can start helping each other.

So here's an invitation.

If you need someone to talk to, if you're an artist who wants to create something, if you have an idea for helping people, if you have skills you'd love to put toward something meaningful, or if you simply want to find other people who give a damn, reach out.

I don't have an organization waiting for you. I don't have a grand solution or a pile of money. I'm not promising I can fix your problems.

I can offer my time, my creativity, whatever skills I have, and a willingness to figure things out alongside other people.

Message me here. Tell me what you're working on, what you wish existed, or what you think we could do together.

This isn't just a pretty Reddit comment to me. I'm a real person, sitting on the other side of this screen, asking whether we can do something more than agree that things are broken.

Maybe we start small. Maybe we make something useful. Maybe we help one person.

But why not start reaching for each other?

[u/Lizaderp → u/GiantWackySkeleton]

Cause the people with money don't care about you or me. They care about you spending money so they can make it their money. If it gets redesigned, they make less money.

[u/GiantWackySkeleton → u/Lizaderp]

When did we become satisfied with this?

Just consider the amount of people on this website, why don't we drive the conversation more towards the discussion of caring for one another?

We don't need their money specifically, why don't we reach for each other?

[u/ContentRecording9304 → u/GiantWackySkeleton]

Why have we constructed a civilization where one person was allowed to have 1 trillion dollars while there is a large amount of people experiencing/dieing of hunger? Greed probably.

[u/daviddjg0033 → u/ContentRecording9304]

How do you even tax the oligarchy when Felon dropped another quarter billion + into the midterms?

[u/hackingdreams]

It's nice somebody is realizing that we're at 11:58 of new Great Depression. All of these companies are out over their skis and nobody actually wants to admit it.

Genuinely, who is going to be safe from this collapse? There's nowhere to hide, nothing that isn't exposed on this. They've leveraged everything, oversold themselves to the banks, and even the banks are trying to run for the hills.

The Anthropic IPO will be the beginning of the end. $2 trillion dollar valuation for a company that literally produces hot air.

[u/supercali45 → u/hackingdreams]

the last few days showing some cracks.. which means Monday it will pump again... the US stock market is the world's casino right now

[u/Overall-Tune2909 → u/hackingdreams]

The Indian govt also issued a warning. 

[u/FrontLifeguard1962 → u/hackingdreams]

It does seem like the inflated IPOs of space x, anthropic and OpenAI are the insiders cashing out while leaving the rest of us holding the bag.

[u/Queasy_Local_7199 → u/hackingdreams]

What should I do? Buy gold? Ammo?

[u/RyeZuul → u/Queasy_Local_7199]

I'm no expert, but it's probably time for us to crack each other's heads open and feast upon the goo inside.

[u/AccNumber77 → u/Queasy_Local_7199]

Prepare for complete loss of governmental aid, start becoming as self-sufficient as you can, rely as little as possible on the internet and electricity being stable or accessible.

[u/CartoonistFar2036]

Published Tue 13 Oct 2026 // 12:44 UTC

The International Monetary Fund (IMF) has become the latest financial heavyweight to warn that the AI spending frenzy could end in tears, with consequences extending well beyond the tech sector.

In its latest Global Financial Stability Report, published on Tuesday, the IMF warns that financial markets are increasingly exposed to an AI-driven correction, especially if the billions poured into the tech fail to deliver the profits investors expect.

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.

The watchdog is also concerned about circular financing arrangements, in which AI firms act as one another's investors, financiers, and customers. These deals might help keep the AI money machine running, but they also mean financial trouble at one company could quickly become somebody else's problem.

The IMF isn't the only one getting nervous. Jefferies strategist Chris Wood has warned that America's AI spending spree could cause "massive capital destruction," with cheaper Chinese open source models threatening the returns US tech giants are counting on.

The warning also follows similar concerns raised by the Bank for International Settlements (BIS), which cautioned in June that the AI boom had uncomfortable similarities to previous financial bubbles. With so much money tied up in a relatively small number of tech companies, it warned that a sudden loss of investor confidence could send shockwaves through global financial markets.

As if the prospect of an AI-fueled market meltdown weren't enough, the IMF has identified two other threats to financial stability: rising government bond yields and cyberattacks. Higher yields could increase borrowing costs for governments already struggling with debt, while the latter could bring critical financial services to a grinding halt.

Banks have become increasingly reliant on the same handful of cloud providers and software suppliers, creating shared points of failure that could spread disruption across institutions. If a cyberattack took down a major bank or critical tech provider, the IMF warns the fallout could disrupt everything from payments and trading to customers accessing their deposits.

Software vendors aren't getting much of a head start either. According to the IMF, more than 70 percent of tracked vulnerabilities exploited so far in 2026 were already being abused by attackers before or on the day they were publicly disclosed, underscoring how little warning defenders may receive.

AI could make matters worse here too, as the IMF warns that increasingly capable models are giving cybercriminals more powerful tools, potentially making it easier to find and exploit vulnerabilities at speed. 

Despite the gloomy outlook, the IMF isn't predicting an imminent financial collapse. It says global financial markets have remained resilient, and its stress testing suggests the banking system could withstand a severe downturn, although weaker institutions would be more exposed.

Still, the watchdog wants regulators to keep a closer eye on excessive borrowing, concentrated investments, and cyber resilience before any of these risks turn into a full-blown crisis.

For an industry promising to revolutionize the global economy, accidentally helping to crash it would be quite the plot twist.®

https://www.theregister.com/ai-and-ml/2026/10/13/ai-bubble-could-burst-and-take-global-economy-with-it-imf-warns/5302781

[u/Berserker76]

The AI bubble bursting is not what is going to cause the global economy to collapse. The policies of the current US administration, the chaos, instability and the continued added debt (running $2T deficits annually, which will get significantly worse when the economy crashes), will be what takes the global economy down.

There is a reason the super rich have built doomsday bunkers, so they have a place to run off to when it all comes crashing down.

[u/FinAdda → u/Berserker76]

Rooms Day Bunker almost sound worse than doomsday bunker.

[u/king_john651 → u/Berserker76]

They're deluded in thinking that we will let them flee to countries like mine. There'll be more than enough people waiting for the new game season to start

[u/Soft_bich_z]

Quick, give us a bailout or we destroy the world...

[u/Technical_Airline205]

Breaking news! The house of cards called sovereign debt is about to collapse.

[u/tahlyn → u/Technical_Airline205]

And when the lords play their game of thrones, it's the regular people who suffer.

[u/SanchoPandas]

First: fuck the IMF - it's a weapon wielded by the rich to exploit the poor

Second: fuck the AI economy - it's a billionaire circlejerk run by end times fascists with bunkers

Third: invest heartily in local community - when it all crashes, your neighbors are your best bet

[u/Bohottie]

Who would’ve thought pumping trillions of dollars into a theoretical technology with no clear path to an ROI could be problematic?

[u/newandgood]

wasn't the global economy ok before AI

[u/Born_Rabbit286 → u/newandgood]

It was 2022, so in a lot of places the economy was still affected by covid, it's hard to say how it would go compared to how it's going.

[u/PotatoFig]

None of it is real. Numbers on a screen. Idiotic species.

[u/Maleficent-Onion-434]

Anyone with half a brain could have told you that years ago. Now, considering there's been no attempt to stop this by the powers that be, the question is, who do we hold responsible when it does, because there's no way we will allow another 08 style response.

[u/SealsEverywhere → u/Maleficent-Onion-434]

It doesn't matter what we "allow". The people to be held responsible have already bought the government and are above being able to held responsible

[u/MahGinge → u/SealsEverywhere]

Immigrants and poor people will bear the cost, as it always is

[u/aloofinthisworld → u/Maleficent-Onion-434]

At least in 2008 you had competent people at least trying. Now, I’m worried we don’t have competent people in charge but they are don’t even care.

[u/howtoretireby40 → u/Maleficent-Onion-434]

Narrator: “…they did”

[u/Maleficent_You_3448]

The alternative of AI just continuing on uninhibited, making a very select few rich while it takes more and more jobs and makes everything worse is actually the scary option. We should be praying it crashes hard, that short term pain pales in comparison to what a future based on AI could bring. 

[u/DanNeider]

No bailouts for AI.  They knew it was devastating for the economy when they did it, but it was good for specifically them.  Now let it be bad for specifically them

[u/CliffsofRed]

I started reading about and deeper into their circular funding early last year and, holy shit, it’s nuts.
The crash is gonna be BIG. YUGE, they like to say! Everyone is saying it!

[u/big_thundersquatch]

At this point just let it happen. We need a new economic system. We cannot have 1% of people making more sums of money than an entire lineage of people will see in 1,000 years, and then breaking the government with it.

[u/MrStrong502]

ai has military application

they figured they could increase military spending and hide it as ai and datacentre investment

100% it's being used to store data, analyse videos and images from flock and other sources on citizens and people abroad and used to hack foreign companies, they'll take most of the compute too

[u/sangueblu03 → u/MrStrong502]

AI is the next nuke. This is an arms race. The US government can not allow these AI companies to fail, under any circumstances, as it will open the door to China being #1 global power. 

[u/Richmahogonysmell → u/sangueblu03]

China already is. They are winning WW3 without taking a single shot due to the US current leadership.

[u/Imaginary_Scene2493]

Could is bursting.

FTFY.

I don’t think the tech bros realize the degree to which they have lost the confidence of free societies.

[u/Loquacious-of-Borg]

It's not a phase bubble, dad! This is who I am the world now!

[u/LastoftheGreybeards]

Oh, so THIS is why they’re building secret bunkers in various locations.

[u/homebrew_1]

No bailouts.

[u/Amerpol]

My understanding is that the AI bros after loosing so much money will seek a government bailout just like in 2008 Bank bailout 

[u/Pezdrake → u/Amerpol]

This needs to be a question for every candidate right now. "Will you promise not to vote to bail out AI companies and investors with taxpayers money, even to avert a financial crisis?"  Doesn't matter if they promise or not because they will end up doing it. The important thing is to call it out ahead of time and get them on record so no one can pretend it was a surprise and control the narrative over the need for tight government regulation if Wall Street and returning corporate and income taxes to the traditional ones of the 50s and 60s. 

[u/DeltaFoxtrot144]

Please do this shit needs to fall and fall hard, hopefully hard enough that heads literally roll for it

[u/BlkSubmarine → u/DeltaFoxtrot144]

Self propelled, 20 story drops to pavement would also suffice. It may even be preferable, as it would save us the trouble.

[u/Olangotang → u/BlkSubmarine]

I know this rhetoric is extreme, but it's seriously underestimated how many have a seething HATRED for these people, and it's only growing.

[u/Jodid0]

Had to check I wasn't in r/NoShitSherlock.

[u/WierdFinger]

You mean Trump's economy with the help of AI tech bros on top of it all.

[u/merRedditor]

That's fine. Most people weren't having a good time of life in this global economy anyway. It's a good time to scrap it and start from zero.

[u/IntroductionAgile372 → u/merRedditor]

Those people will starve to death with what you're saying. It can get infinitely worse

[u/Aggravating_Teach_27 → u/merRedditor]

From zero? The way this is going we'll restart from -1000000.

That people not having 'a good time of life' are going to find those were their golden years.

Thinking disaster is the way forward is tempting, but the disaster they are cooking this time won't be cathartic. It'll be the start of an even worse dystopia.

[u/GarbonzosGuy]

The economy is the fancy word for four dudes bank accounts. Let it burn.

[u/zoroddesign]

If AI bursting ends the economy, then the economy was shit to begin with.

[u/lordtyp0]

Then let it. The current elite have destroyed everything. It's time to eat them.

[u/Ok-Replacement9595]

The bubble will pop. Credit default swaps on these companies are going nuts this week.

[u/Shot-Fig4715]

Let them fail. Screw the rich.

[u/Tzokal]

I was already onboard with societal collapse…you don’t have to try and convince me.

[u/psychedelicdevilry]

Why is the world’s economy being held hostage by a very new and dubious technology?

[u/704Slim]

So ready for the 3rd once in a generation financial collapse of my lifetime

[u/charaboii]

Can't eat a stick of ram, ram prices will be the absolute least of our worries

[u/PerfectTommy77]

No f**king bailouts. This time we let it burn to the ground.

[u/OuterSpaceBootyHole]

in b4 young people say the dotcom bubble burst was irrelevant because we got websites out of it so this one will be too

[u/SimoneNonvelodico → u/OuterSpaceBootyHole]

I mean, this isn't to say that a bubble bursting doesn't have effects, but the dotcom is a good example for why expecting AI to vanish altogether if the bubble bursts is probably wrong.

[u/Aggravating_Teach_27 → u/SimoneNonvelodico]

Nobody expects AI to vanish, we expect AI to crash the economy.

Hard if they fail.

Even harder if they succeed. The whole goal is to replace workers, and without workers there are no consumers....

[u/HankHippopopolous → u/SimoneNonvelodico]

Yeah exactly. Many AI companies will crash and burn and there will be 1 or 2 big survivors that gobble everyone else up and become the worlds biggest companies over the next 10-20 years.

[u/TheRatingsAgency]

Oh they’ll certainly make sure it does cause ample damage.

[u/_Panacea_]

If only someone somewhere had ever warned us that this was likely to happen.

[u/warrior891]

Wouldn't the Billionaires just buy everything when this happens?

[u/ItHitMeInTheNuts]

So many companies tied to others with this AI bubble, consequently most investment funds, savings, retirement plans. Nvidia, Oracle, Microsoft, Meta, AWS, etc. They tied everything in a way that if they break we all break. So doesn’t matter what they do, the government will bail them out, or acquire them

[u/karl4319]

Wow, I'm shocked. Shocked I say. Who could have possibly seen this coming?

[u/lazydivey98]

No more “too big to fail” bullshit.

[u/BatMannequin]

Remember, every time someone says "the economy" you replace it with "rich people's yacht money" and then you see the truth.

[u/surfkaboom]

We need just one more data center guys

[u/Atheizm]

All governments are itching to bail out tech bros like they did bankers in 2008.

[u/CrustyBappen]

It will burst eventually. In the Dotcom boom loads of companies sprung up and eventually the funding dried up and bam that was the end of it.

Still it was a revolutionary time that lead us to widespread adoption of the internet for commerce and more.

AI bubble will be the same. so many new companies springing up, AI embedded everywhere, margins going down due to hard costs of sale driven by LLM providers

Eventually those funding will want an exit, or economically the taps will turn off financially. When that happens the bubble will burst and we’ll enter a new era of growth driven by sustainable usage of AI.

[u/Tenroh_]

That would be amazing. Getting people back to work and using their brains

[u/ianishomer]

Could burst is wishful thinking isn't it? It has to burst, how can all the AI companies make the profits that pay for huge data centres and ongoing working costs?

The big players OpenAi etc are spending trillions of dollars in the race to be the top dog, whilst China are using the big guys technology, plus their own, to keep up with them for a fraction of the cost.

It's when the SHTF rather than if.