[cmiles8]

It’s not a question of if but when at this point.

To parallel to The Big Short this is the point in the movie where folks realize it’s mathematically impossible for things to not implode and so players are quietly positioning themselves for that eventuality before things are allowed to blow.

It’s been a dramatic shift these last six months but everywhere I look now folks are quietly preparing their battle armor to survive what’s about to unfold.

The tech will stay, but the AI business landscape will have a market-cleansing forest fire.

There’s a whole generation in tech now that’s never seen what happens when a bubble like this unravels. I fully expect we’ll see the likes of offices just abandoned overnight with food still in the fridge as AI company after AI company just vaporizes.

[vrganj]

How would one position oneself as an individual investor if one believed this thesis?

[cmiles8]

Not financial advice, but: Honestly it’s pretty hard and I wouldn’t recommend it. Shorting stocks and getting into bonds / default swaps but the system is broadly rigged against small players doing well here. Ie in the Big Short see everything that was needed for two guys to bet with their own money.

It’s likely to be bumpy for all but stay the course with diversified strategy. The .com bust and 2008 are just blips and cheap buying opportunities for most folks with diversified portfolios and index funds. We’ll likely see similar messy markets for a while but the world will eventually recover and move on.

The ones that get truly wiped out are those with a lot of paper wealth now that implodes, but have little liquid wealth. These types go from “super rich” to can’t pay their bills almost overnight. Cash is king for times like those ahead so if you don’t have a lot of cash on hand, now is the time to secure that if you can.

[bryanlarsen]

Heck, it's pretty rigged against big guys too. The subprime bubble was not something that only Michael Burry knew about -- it was a front page story on the Economist several times years before the crash.

There were lots of big guys that bet against the bubble, but bet too early and weren't able to keep up with margin calls etc.

[lubujackson]

Be careful if you expect a dot com fallout - that was retail investor driven and took a long time to unwind as people sat through painful drops. Ai is much more of a private investment bubble. AI remains useful. What is likely to go away (and all at once) is investment and free rides/discounts.

So I expect more of a sobering process for AI companies rather than a blowup, simply because they all still will have cash in the bank and some have actual products with clients that make use of them.

[SpicyLemonZest]

I don't think there's a good way for individual investors to position themselves against economy-wide investment misallocation. As The Big Short also covered, any profitable short position is going to require making a risky bet about when the bubble will pop, and when things get chaotic there's no guarantee that instruments which "should" be correlated to the thesis will actually remain so. You can:

* identify a bad AI stock at $100 today

* produce an ironclad 100% guaranteed proof the company's valuation will drop below $50 by the end of 2028

* buy a bunch of long-dated puts with a break-even of $75

* see the AI investment bubble visibly falling apart in let's say March 2027

and you still lose if OpenAI acquihires the team at $80 in an attempt to prop things up.

[Yopolo]

Thats a weird take. Google/Alphabet can literaly just afford their AI investment.

Microsoft can as well.

So Anthropic only has a few thousand people which is nothing and OpenAI has also only a few thousand.

A lot of people working at these companies would find a new job easily and probably making a shit ton of money anyway.

The broader AI companies do not have that much venture capital, not that many peple and potentially not even that high of risks.

Deepseek didn't do their funding round because they could'nt even get the compute if they wanted to. So they might be very lean.

And even investors for OpenAI and Anthropic might accept that they stop R&D and just keep the services up and running as they are cost effective.

The bigger problem will be the industry itself: If i'm 5x more productive, and generate now more costs on the business, they will reduce headcounts to compensate for it.