1929 AI Crack High

It's unfortunate that global central banks happen to be easing into the apex of the largest Tech bubble in world history. But you trade the market you're given, not the one you want:

"Artificial intelligence and technology have contributed to a remarkable boom in recent years. But, Sorkin said, today's economy is being propped up by the AI boom, and it's too soon to tell if this is a sugar rush, a short-term and unsustainable boost to the markets. But, Sorkin is positive there's a crash coming."

A central bank driven sugar high in a Tech bubble while the economy collapses amid a 1929 warning from a well known pundit - but almost no one sees it coming because AI has rendered society functionally illiterate.

Proof of God's existence.

The pressure is off (me) finally. Because instead of being a lonely bear in the wilderness, I am now joined by a renowned WSJ author and CNBC commentator who agrees that crash is inevitable.

However anyone reading the AI book I mentioned in my last blog post - AI Empire, by Karen Hao would have already assumed that this AI bubble would end extremely badly, less than halfway through the book. Her book is far more prescient than Andrew Ross Sorkin's. She discusses how over the past decade Silicon Valley and Wall Street have constantly amplified the hype around AI to depict it as this utopian technology that will solve all human problems, while making environmental and economic problems far worse. She asserts that this current OpenAI driven model is based upon an AI approach called "Deep Learning" which demands maximum resources to achieve AI nirvana. The only problem she says is that the goalposts keep moving. And they will always keep moving as the distant horizon is never attainable.

Consider these quotes from the book:

"The human brain has about 100 trillion parameters or synapses, Hinton told me in 2020 - "What we now call a really big (AI) model like GPT-3 has 175 billion. It's a thousand times smaller than the human brain".

A trillion dollars for a gerbil brain?

She goes on to describe how this current maximalist OpenAI approach has now sucked in all available resources from every other branch of research and technology. It has caused a massive brain drain across academia due to the unprecedented salaries and bonuses now being offered. Which means that humanity is no longer innovating on anything other than to create the Tron master control program. In a nutshell, her book is an indictment of Silicon Valley, it's an indictment of Wall Street, and hence it's an indictment of the financial media who never question their duopoly of serial fraud.

However, this extreme model of AI is now up against the brick wall of financial markets. It's only a matter of time before even the most finance-challenged on Wall Street realize that OpenAI's deeply negative cash flow cannot sustain this level of investment for much longer. Does anyone remember Facebook's ALL IN Metaverse investment in 2021? Wall Street entertained that fantasy for quite some time but then it spontaneously imploded in early 2022.

Now Zuckerborg is making the same existential bet on AI, paying one employee an asinine $1.5 billion to join his company:

OpenAI is a private company, but if it had a stock I think it would look like Facebook (Meta) right now. Rolling over and imploding due to rampant over-investment in sheer folly.

While I'm here I should mention that last Friday Trump threatened to re-escalate the trade war with China over Rare Earth mineral exports. But then he backed down over the weekend, when his personal Crypto currency collapsed. He realized the U.S. economy is not important compared to $TrumpCoin.

Looking at the Momentum 7 best performing S&P 500 stocks of 2025 we see they rolled over last week and Friday had record down volume. Now on Monday everything is bouncing back to a new lower high (not shown).

We will soon find out if this nascent new trade war skirmish has imploded the AI bubble and the everything else bubble at the same time.

In the meantime until we have definitive proof that financial collapse is already in its late stages...party on at the 1929 AI Crack High. And remember "No one saw it coming". Except the guy who wrote an entire book about it ahead of time.