Leadership and Keynote Speaker and member of the Data Science Research Centre at University of Derby
We have been reading various warnings about the impending collapse of the GenAI LLM bubble. However, this is the most comprehensive analysis that I have seen of the situation by Baskar Agneeswaran. He says the signs are more significant than we have seen in decades. "I’ve seen hype cycles come and go, but what’s happening right now feels more dangerous — because the gap between perception and reality is widening at both the micro (AI company fundamentals) and macro (global markets) levels." He considers the signs to be so serious that he has cashed out of all his investments. "When you combine unsustainable AI economics, overvalued public markets, and the structural job displacement AI is about to unleash, the conclusion for me is unavoidable: we’re headed for a crash. The only question is how deep and how soon." Some of his key signs. "Broken Unit Economics The AGI Mirage The Agentic AI Hype The bubble will burst — and when it does, the fallout will spread far beyond AI companies themselves." Some other signs that are significant "The Buffett Indicator (Market Cap-to-GDP) Price-to-Earnings (P/E) Ratio Price-to-Sales (P/S) Ratio Mean Reversion (S&P 500 vs. Historical Trend) The Sahm Rule (Recession Signal)" Only the Sahm Rule is not indicating disaster. The conclusion is dire. "Each of these indicators tells the same story: stocks are not just priced for perfection — they’re outright overpriced. The Buffett Indicator, P/E, P/S and mean reversion have all flashed red before past crashes, but rarely all at the same time. Today, they’re aligned. Valuations have drifted far beyond what the economy, earnings, or revenues can realistically support. History shows that when prices and fundamentals diverge this much, the correction isn’t optional — it’s inevitable." Terry Bollinger Purnima Gauthron Gary Marcus Victoria Coté Chuck Martin Tim El-Sheikh Dr Jason Price Dr. Jeffrey Funk Dinakar R. Bogdan Grigorescu Denis O. Ivo Koutsaroff (掘露 伊保龍, KUTSURO Iboryu) Neil Gentleman-Hobbs Russ Guillette Anindita Biswas Prof J. Mark BishopMick Fews Shobhit Tankha Axel C. David Hsing Srini Pagidyala Donn Gurule Beth Carey Dagmar Monett Richard Brown Lewis Binns MSc CEng MIET Herbert Roitblat Roumen Popov Manny Ko Sing Koo Jason Gulya Evelyn Van Orden Peter Bednar Paul Burchard, PhD Moira S. Kevin Ferron Garrick Villaume Mykel G. Larson ♞ Maria Santacaterina https://lnkd.in/eydD6U3N
Now nVidia throws $100 Billion into OpenAI to keep it afloat.... Come on people, AI is about 5 tech companies in a pyramid scheme each paying one so it can pay the other. There are no customers. Just investors 😂
Interesting, but not sure he's correct about a general market collapse. It's a concern that AI is the buzz word of business at present. People who know little or nothing about it have picked it up as the latest "must have." That should raise lots of questions, not least of which is gullibility. A general market collapse? Maybe: wait and see...
David Pither
2d
Entirely consistent with the hype we see on LinkedIn about vibe coding, and the unmanageable cans of worms that manifest when I try to "Vibe Code" - a huge gulf between information and reality.
Dear Richard Self, Thank you very much for sharing. Quick question, What do you think about AI in aviation? Sincerely, Ramaz https://avramaerospace.com/
None of the traditional, historical, formerly reliable metrics and ratios are applicable today, the result of massive monetary and fiscal intrusion. Perhaps, if we finally face the cleansing recession we need to rid ourselves of the continuously increasing number of zombies, rightsize the mountain of debt we've used to avoid recession, and stop trying to live beyond our means, returning to the reality of risk premia, we just might dust these off and resort to them for guidance then. Couple of fun facts in the meantime: 1. Approximately 92% of the current generative AI market value was created in just the past five years...a 12-fold increase. 2. Roughly 90–95% of today's crypto market value was created in the last five years. This post-pandemic speculative fervor will finally succumb to reality, followed by gravity, and the evaporation of trillions of transient, ethereal "wealth"...and that will be felt by governments, businesses, pension funds, banks, and other entities. Most importantly? Almost no one believes this can possibly happen. Perhaps Carl Jung, writing onthe subject of "Mass Psychic Delusions" in history, triggered by mass fears (e.g. pandemics) might help explain our present day speculation and risk-taking?
Hahaha. Hahaha. Hahaha. Generative AI generates carefully selected garbage 🗑️. Quote me.
Smart man.
Why is that guy an expert to be listened to?
Artificial Innovation the pump and dump that will see another great taking, the second in 5 years, that will finally crash the world
Leadership and Keynote Speaker and member of the Data Science Research Centre at University of Derby
2dSee also https://www.linkedin.com/posts/baskaragneeswaran_i-liquidated-my-entire-portfolio-here-activity-7374593465495642112-Mi7E for Baskar's choices for re-investment.