The AI bubble is the only thing keeping the US economy together, Deutsche Bank warns

Thus far the AI bubble is 2 trillion and growing. Ouch!



Oracle announced something like 300 billion of business from OpenAI. OpenAI was promised those funds from venture capital. It's all borrowed money, there is little to no revenue behind any of it.
OpenAI is aPrivate company backed by MS with over a 3T$ market cap. You are speculating when you are claiming that OpenAI doesn't have access to capital.

The government is pushing for the race and it will not stop, something the dotcom bubble never experienced for support.
 
It's not down, but it isn't up either. If you remove big tech stocks, the stock market has effectively stalled out, with only small gains every 3-4 years. Once you factor in inflation, non tech stocks have technically lost value since the great financial crisis of 08.

Well, all the productivity numbers from the USA are alleviated mainly by the tech sector. All the manufacturing businesses didn't get much better for almost 2 decades.

There is not really better way to make goods and products anymore. The car industry is a good example of that. However, technology is evolving at a pace that we cannot follow anymore.
 
You sound young and inexperienced.. /s

(whilst nodding at the same time)

Thing is there are so many that must have got hoovered into this market in the last few years they must have no perspective of the past. Maybe all those that did retired on their millions before the GFC hit, leaving the rest in the sandpit.
No, he is right. We are still waiting for that famous recession predicted to happen in 2019, 2020, 2021, 2022, 2023, 2024 and 2025.

You are the one basing your logic on trying to predict the decline in an era where government are fueling the race in AI. I don't see how the investments could stop drastically in the next 5 years, when countries are making this a question of national security.

At some point, you will be right because a broken clock is right twice a day, but history have show again and again that when the stock market is reaching record highs, it is usually the sign of reaching other record highs, and not record lows. There is going to be corrections, for sure, but staying invested is usually the better decision than trying to time the market and cashing out.
 
>"Around half of the market gains captured by the S&P 500 index have been driven by tech-related stocks, Deutsche Bank warns."

Tech has driven the S&P (and the Dow, and Nasdaq) for thirty years plus, so the argument that "tech" is driving gains in the S&P now, while true, is just a distraction. Markets are cyclical, as a function of macro-economies which are cyclical. It's mostly rolling hills, with the occasional continental divide. But up times are inevitable just as down times are inevitable.

Why we should put faith in a German Bank's analysis of the US economy is beyond me however. Europe's got a huge host of problems, social, economic, governmental, that they should be attending to, just as we have our own unique cluster of those problems.

I suspect there's a fair bit of schadenfreude at work in their analysis.
 
AI is an asset for business, medicine, research and on and on. But I would rather keep it out of our lives as much as we can. My friends generally fear it as it becomes totally unbridled.
 
While frustrations with past administrations are valid, it's an oversimplification to claim that one side "covered its ears" while ignoring the policies that did aim to address systemic issues — such as expanding healthcare access, improving environmental protections, investing in clean energy, and advancing civil rights. These are not fringe issues; they affect millions of working-class Americans.

The idea that only one side cares about "normal people" often ignores policies intentionally aim to uplift marginalized and economically struggling groups — whether through raising the minimum wage, expanding union protections, or ensuring affordable healthcare.

It’s worth asking: what exactly is considered “toxic”? If you're referring to values like inclusion, equality, and diversity, these are principles that liberal movements have championed not to punish or shame people, but to ensure fairness and justice. These ideals are not inherently invasive — they’ve become politicized by narratives that frame inclusion as an attack rather than a broadening of opportunity.

Much of the backlash against the previous administration is based on misinformation or a reaction to how progress challenges traditional power structures — not necessarily because the ideas themselves are harmful.

Previous administration proposals have put forward immediate solutions to big problems: climate change legislation, criminal justice reform, student loan relief, and better worker protections. The fact that many of these proposals are blocked or delayed is often due to political polarization and obstruction — not a lack of urgency from the left.

Moreover, rushing to "fix" things without considering long-term consequences can lead to reactionary policies that help in the short term but harm in the long run — particularly when they’re driven by cultural resentment rather than data or human needs.

Culture is driven low when those very words are politicized and mocked. The previous administration’s view is that diversity and inclusion aren’t hollow buzzwords — they’re essential to building a fair society. If people have negative associations with them, it’s often due to targeted campaigns that portray these values as threats to tradition or free speech, rather than tools for greater equity.

It’s not inclusion that divides people — it’s the fearmongering around it.

This framing implies that one side “deserved” to lose because they had “arrogant” or “hypocritical” values. But liberal movements have often acknowledged their flaws and adapted over time — as any healthy movement should. No ideology has a monopoly on morality, but dismissing progressive values outright ignores the tangible improvements they’ve brought in civil rights, education, and public health.

Also, "losing influence" isn't necessarily a rejection of values — sometimes it's the result of gerrymandering, voter suppression, or media manipulation. Liberal values continue to resonate with millions, especially younger generations.

From a liberal point of view, it’s reductive and harmful to paint inclusion, diversity, or progressive values as "toxic" just because they challenge long-standing norms. Cultural change is hard, and not everyone will agree — but opposing these values wholesale because they make some uncomfortable risks undermining the very democratic principles that allow diverse societies to function.
An excellent post. IMO, we are seeing examples of your last paragraph in what is happening in the US right now. I suppose the only way some will understand that is when what they value from democracy is taken away. Let's hope it never gets that far.
 
I prefer to think of AI as an arms race rather than a bubble. Arms races have winners and losers, as will AI.

The real question is how significant will the crash be for the losers? Will the stock market go down 5% or 20%? Or will AI permeate into other sectors like robotics, healthcare, and transportation and drive so much growth that the stock market explodes?

The answer is that none of us has a crystal ball.
 
Classic hype spiral – everyone’s riding the AI wave like it’s endless, but finite resources and reality don’t care. bubbles pop, investors forget, but humans love dreaming big. buckle up, it’s gonna be messy when the fizz hits air.
 
There is not really better way to make goods and products anymore. The car industry is a good example of that. However, technology is evolving at a pace that we cannot follow anymore.

I can smell bullsh#$!

There will always be a better way to make a product. And technology has yet to arrive at that point in time that it is beyond human comprehension.

Redgarl needs to read some articles and books.
 
I prefer to think of AI as an arms race rather than a bubble. Arms races have winners and losers, as will AI.

The real question is how significant will the crash be for the losers? Will the stock market go down 5% or 20%? Or will AI permeate into other sectors like robotics, healthcare, and transportation and drive so much growth that the stock market explodes?

The answer is that none of us has a crystal ball.
no we dont know but when so many markets are intertwined like the power grid and large tech if it does burst its going to affect the little guy even more. even if it doesnt burst the little guy pays because all our power rates go up for the good of big tech. as with any fad like this it always corrects. just have to see how far.
 
Let's give 5 years for other companies to be able to develop multi servers ai training as alternative to nvidia cuda.
 
And how do we know this Deutsche Bank analyst isn't shorting the AI market? If so, OFCOURSE he's preaching about a pop in the "AI bubble". The amount of money being spent on AI by the big 7 is mind boggling, it's not like the Dot com bubble when the internet "companies" had no revenue whatsoever. Meta & Google use it to recommend feeds/advertisements to their users, and they're already profiting from AI in that regards. These aren't small companies, they're both $1 trillion+ companies doing this spending.

A $5 billion AI deal (which Coreweave signed last week) doesn't even make the front page of all the business news sites. If it were any other sector (eg Coca Cola, GM etc) it'd be front page news. And the company fueling all this (I.e. Nvidia) is a $4 trillion company. Completely different scenario from the Dot com bubble.
 
Classic hype spiral – everyone’s riding the AI wave like it’s endless, but finite resources and reality don’t care. bubbles pop, investors forget, but humans love dreaming big. buckle up, it’s gonna be messy when the fizz hits air.

I believe the estimate is it will continue until the late 2020s, but nobody really knows and if robotics and autonomous vehicles do become ubiqutious, then that can be pushed into the 2030s.
 
The average IT worker has been yelling about this for a few years now, but I guess it's not really an opinion until the wealthy weigh in. It's simple really... It costs immense resources and doesn't return much of anything on its own.
True. More over the longer this bubble keeps inflating the louder the POP! when common sense returns.
 
While frustrations with past administrations are valid, it's an oversimplification to claim that one side "covered its ears" while ignoring the policies that did aim to address systemic issues — such as expanding healthcare access, improving environmental protections, investing in clean energy, and advancing civil rights. These are not fringe issues; they affect millions of working-class Americans.

The idea that only one side cares about "normal people" often ignores policies intentionally aim to uplift marginalized and economically struggling groups — whether through raising the minimum wage, expanding union protections, or ensuring affordable healthcare.

It’s worth asking: what exactly is considered “toxic”? If you're referring to values like inclusion, equality, and diversity, these are principles that liberal movements have championed not to punish or shame people, but to ensure fairness and justice. These ideals are not inherently invasive — they’ve become politicized by narratives that frame inclusion as an attack rather than a broadening of opportunity.

Much of the backlash against the previous administration is based on misinformation or a reaction to how progress challenges traditional power structures — not necessarily because the ideas themselves are harmful.

Previous administration proposals have put forward immediate solutions to big problems: climate change legislation, criminal justice reform, student loan relief, and better worker protections. The fact that many of these proposals are blocked or delayed is often due to political polarization and obstruction — not a lack of urgency from the left.

Moreover, rushing to "fix" things without considering long-term consequences can lead to reactionary policies that help in the short term but harm in the long run — particularly when they’re driven by cultural resentment rather than data or human needs.

Culture is driven low when those very words are politicized and mocked. The previous administration’s view is that diversity and inclusion aren’t hollow buzzwords — they’re essential to building a fair society. If people have negative associations with them, it’s often due to targeted campaigns that portray these values as threats to tradition or free speech, rather than tools for greater equity.

It’s not inclusion that divides people — it’s the fearmongering around it.

This framing implies that one side “deserved” to lose because they had “arrogant” or “hypocritical” values. But liberal movements have often acknowledged their flaws and adapted over time — as any healthy movement should. No ideology has a monopoly on morality, but dismissing progressive values outright ignores the tangible improvements they’ve brought in civil rights, education, and public health.

Also, "losing influence" isn't necessarily a rejection of values — sometimes it's the result of gerrymandering, voter suppression, or media manipulation. Liberal values continue to resonate with millions, especially younger generations.

From a liberal point of view, it’s reductive and harmful to paint inclusion, diversity, or progressive values as "toxic" just because they challenge long-standing norms. Cultural change is hard, and not everyone will agree — but opposing these values wholesale because they make some uncomfortable risks undermining the very democratic principles that allow diverse societies to function.

Toxic things like Men should be allowed in the women's restroom, that Men should be allowed to play on women's sports in high school and college. That we need criminal justice reform at all is a farce its working fine, it just happens that a certain demographic commits the most violent crimes, the solution isn't criminal justice reform its a cultural problem. DEI as the last admin wanted it meant that the color of your skin was more important than your ability, and them arguing that math is racist. I'm sorry I could go on but no The left lost because they are taking up fringe issues while millions of Americans got ignored, shouted down, and yelled out, and the left is still doing it, and the republicans keep gaining, look at registrations, the right is surging while the left is foundering finally. Also do your own writing, its so painfully obvious that's AI its not even funny, though it's expected from your side of the aisle.
 
“Bubble burst incoming” gets clicks. Reality’s probably more boring. Yes, tech is carrying growth right now, but it won’t kill the economy if spending cools off.

If even a slice of this spending delivers real productivity gains, then it’s not just froth. Investment cycles slow down, they don’t always “burst.” Maybe a rough landing rather than a soft one. Goldman Sachs and McKinsey project that AI could add trillions to global GDP by 2030–2040 through productivity gains.

We also have people still buying houses, cars, food, services… you know, the rest of GDP. Then we have Interest rates, fiscal spending, and trade policy that also shape recession risks.

 
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Does that mean we will get another forever war to distract everyone from the massive theft of money and property by the parasitic few over the masses?
 
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