I am aware that some say I have called twenty of the last three crashes, but I noticed this comment in The Guardian this morning:
After months of warnings that AI valuations were too high, and that the bubble might burst, US investors dashed to the exits en masse yesterday.
The warnings were appropriate and right, and I suspect there will be more losses today, not least in European markets this morning. That so many failed for so long to heed the obvious warning signs of a bubble is not my fault.
To put this in context, the NASDAQ index of US tech stocks fell by 6% yesterday, and markets in Japan, South Korea, and Taiwan fell by more overnight, with tech-related stocks being hit the hardest, some being down by more than 20%.
I stress that these falls will not precipitate a crisis. If they continue, they could.
And what is the cause? It is that reality, in the form of real, live, warm-blooded human beings, rejecting what AI is trying to do, has caught up with financial markets that want to believe that those very same people will behave as neoliberal economic models say they will, as unquestioning, compliant automatons whose role is to simply be economic inputs into the neoliberal money-making machine.
The disconnect underpinning this sell-off is, then, very real. It is financial. It is political. It is economic. It is ethical. Most of all, it is human-based, and markets have denied that aspect of the whole AI process.
If people do not want a product, eventually there is no market for it, and that is the reality AI is facing. At the scale and intensity of use that the AI bubble demands, there is no market for its products.
That has been very obvious for some time. We will now have to go through the pain of that awareness developing amongst those who are apparently paid for their expertise in making money, when they very clearly lack the ability to do so.
I reiterate: this correction may not trigger a crash.
I also reiterate, it might.
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Over the weekend I discovered something that surprised and pleased me. During a family gathering it became very apparent that my children actively avoided using AI and businesses that used AI. Even to the extent of not buying from companies that used AI generated images and videos. There opposition to AI was impressive!
This is a very real sentiment amongst Gen Z
When I look at how much local authorities have bought into AI, and how much failure demand gets created (because only warm blooded human beings can really understand other warm blooded humans beings) I shudder at the consequences of it all.
Me too.
So, you only called 20 of the last three crashes? Pah! I have called at least 30!
My concern is that the “crash” (well, modest decline… at this stage… but it’s early days) is being billed as “markets are crashing because the Democrats won so big”. Given the propensity to believe (falsely) that markets are a barometer of economic health, I fear that this will be used as a stick to beat them.
In fact, what is needed is a narrative “Ordinary Americans have struggled in the last couple couple of decades whilst corporations (and not just TechBro corporations) have made super-normal profits. Markets are down because the Democrats might curtail corporate power – we must make sure this happens”.
Correct.