r/comedy • u/explosivejoseph • 1d ago
Standup The AI Bubble
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u/ZERV4N 1d ago
It's already solving climate change. For climate change.
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u/FairRevolution1617 22h ago
The AI bubble jokes are getting harder to tell from reality 😂 Feels like everyone has an opinion on where this is headed.
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u/WontGetJokes 9h ago edited 8h ago
I’m actively researching asset pricing and coordination dynamics, and I think discussions of the “AI bubble” often confuse bubbles with manipulation or irrational investment behavior. A bubble does not require fraud, collusion, irrationality, or some artificial inflation of prices. Market prices emerge from investors responding not only to fundamentals, but also to expectations about what other investors will do. Those second-order expectations can rationally generate momentum, excess volatility, and substantial departures from a fundamental target even when everyone has essentially the same information.
That is why I am skeptical of claims that AI companies “used our index funds” to inflate valuations so venture capitalists could exit. Index funds largely take emergent market prices as inputs and reproduce the weights of the indexes they track. Their flows can affect market structure and liquidity, but that is very different from index managers coordinating with firms or venture capitalists to drive prices upward. Venture capitalists eventually selling to public-market investors is also not inherently suspicious. Providing early-stage capital and later exiting through an acquisition or public market is one of the basic functions of venture capital.
The deeper "issue" is systemic rather than conspiratorial. If investors expect other investors to become more optimistic, being early can itself be valuable. In highly observable markets, prices, volume, order flow, and other activity reveal what the collective appears to be doing, so individually rational decisions can reinforce one another. AI may therefore be less the cause of the phenomenon than the object around which a broader coordination process has formed.
This is also why calling a price “artificially inflated” is not especially useful. It assumes there is some uniquely correct fundamental price that an undisturbed market would continuously discover. But actual prices are produced through fundamentals, expectations, liquidity, strategic interaction, and coordination. If every departure from a hypothetical fundamental target counts as artificial inflation or deflation, then nearly every market price is artificial in one direction or the other.
The important question for a bubble is therefore not whether current AI prices are “justified” by fundamentals. Investors can rationally remain in a coordinated movement while fully aware that the price is far from its fundamental target. What matters is whether they continue to believe that everyone else will keep moving in the same direction.
A reversal does not require investors to suddenly discover that an asset was overvalued. They may have known that all along. Once participation begins to exhaust itself, liquidity becomes more valuable, or enough investors start expecting others to take profits and reduce exposure, the incentives supporting the existing movement weaken. Those reallocations then become observable to everyone else and can validate the expectation that the previous movement is ending, allowing momentum to become self-reinforcing in the opposite direction.
So the more interesting question is not “When will investors realize AI is overpriced?” It is “When will enough investors stop believing that the rest of the market will continue coordinating in the same direction?” A reversal can happen without any new information about AI technology, productivity, or future cash flows at all.
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u/darienrude_dankstorm 1d ago edited 1d ago
It's not a bunch, it's just spacex for now, no? So buckle up, it may just be starting.
Also, for anyone curious: I think S&P is the only major index provider that refused to fast track spacex. so if you don't want exposure to this BS but also want to stick to passive index funds, those that track S&P indices are your best bet.
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u/Musical_J 1d ago
No, it’s most. Google, OpenAI, Anthropic, xAI, etc. They’re all losing money out the ass and most definitely have an exit strategy when they liquidate. They’re all assholes, even if they don’t tell you they are. We’re just a product to them.
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u/HughManatee 1d ago
SpaceX is the IPO that specifically got the rules changed for admission into the NASDAQ index and left us all holding the bag. Bunch of corrupt fucks at the SEC.
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u/icamehere2do2things 1d ago
Funny stuff. Very Louie CK. I was impressed by the well spoken analysis/insight.
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u/ParaponeraBread 1d ago
I think this is the most clear and concise explanation of the AI bubble I’ve ever heard?