In 2008, the system collapsed because politicians and global institutions hadn’t yet fully embraced debt-fueled illusions as the only path forward. Back then, Ponzi-like schemes still carried stigma, they weren’t openly endorsed as policy. Today? When every government and leader treats infinite debt as inevitable, and growth itself hinges on ever-expanding financial mirages, there’s no brake left on the system.
To be clear: I’m not calling AI a Ponzi scheme. I genuinely value this technology. But nearly everything else is: the markets, the policies, the promises.
> To be clear: I’m not calling AI a Ponzi scheme. I genuinely value this technology. But nearly everything else is: the markets, the policies, the promises.
Both things can be true. The technology may be valuable, and the investment in the technology may make zero sense from a financial perspective.
Same thing with Enron. They spun their money losing projects off into new businesses that were capitalized from Enron stock (which kept going up) and so somehow all of these spin offs were also solvent but only because of the value of the stock they had, which only went up because Enron was not showing the losses they would have shown if not for their increasing stock.
It's always the same idea, people just find different contortions to make it seem legit this time.
Yeah, feels similar to the various crypto perpetual motion machine scams of "we'll use our own token as capital, but the token only has value because people believe we have capital"...
We're one bad Nvidia release away from the entire market crashing down, and given Nvidia's penchant for sometimes just shitting themselves for a release cycle or two it seems insane to hold the entire market on their back.
Most people doing some investing have heard that diversification is important, but I think a lot of people forget that thit employment sector is part of that. I keep thinking of those Enron employees whose 401ks were all stock in their own employer.
As software engineer, that means there are reasons to avoid investing in AI stuff, regardless of what I think about its trajectory.
In this case I feel like it's the opposite. If generative AI really succeeds, most software devs will be out of job, in which case profits from those investments could become useful. If it flops, then there's a greater chance devs will be still needed.
If these things really become good enough to automate software engineering then it’s just a matter of time before they are used to automate all information work.
That would be such a radical societal transformation that I’m not sure we would come out of the other side even having a capitalist society.
Everybody has starry dollar signs looking at last part. CEOs are really bunch of pretentious little boys (and few girls) cargo culting each other, and showing very little innovation or originality... Clearly enough for markets, till its not.
It's profitable for a large swath of hardware and datacenter adjacent companies. Look at AVGO, now trading at 1.5 trillion (which may or may not be overvalued, but the ryzen evaluation does reflect significant windfalls from AI spending). Optical interconnect/photonics companies, actual server rack builders, you name it, the pick and shovels companies are having an absolute boom in real terms, not just valuations.
As AI skeptic I must also present question how profitable? Unlike previous "tech" and products. There might not be marginal costs for extra units. Instead each generated answer or message use significant amount of power and needs large physical investment in infra.
And if generating those messages are cheap, well there might be competition as price maters more than quality to enough of users.
See, I am not an AI skeptic in the sense that I don't think the tech is great, I mean its kinda great but its also a lot overhyped tbh, but I mean its definitely a mix bag of opinions for me imo
But there are some people who think that just because a tech is great fundamentally makes it oh so lucrative and profitable.
That is the one thing that I really really took away from intelligent investor. And I think he even paraphrased it that this should be the one thing you should take away from the book iirc but I am not sure
Its that, just as how historically airplane companies have been kinda bad in profit even though they are technologically marvels. It doesn't matter the tech if there is a P/E mis-match imo / stock price is overvalued.
The same goes for tech.
You can appreciate tech while still thinking that its sort of being a bubble/shit's not good.
… Wait, what on earth makes you think it’s _profitable_?! Are you using WeWork’s ‘community-adjusted EBITDA’ (a measure of ‘profit’ that was basically just revenue) or something?
And all of it just driven on vague statements of "AGI next year" (a year ago) and now "cancer cure on 10 gigawatts".
Almost every podcast nowadays is just "Where is all this money coming from?", "This is just infinite money and you are just out of the loop."
Feels so weird to hear.
I have actually become less skeptical about claims like this over time.
I didn't expect LMs to be able to attack IMO problems this soon. There's also this video stuff recently discussed here, where it was explained that video models can be prompted to segment, solve blind deconvolution problems, solve maces, etc.
I'm not sure it's going to work out economically-- I think a crash is unavoidable because P/E ratios for firms like Tesla of 200 or whatever it is are silly, but I think that technology is going to keep evolving throughout and I don't see why some kind of mild not-quite-AGI-but-beating-humans-on-what-we-pay-humans-to-do-for-their-jobs type thing is not achievable.
If these video models get better and more available we might actually be able to use them to spot patterns in the natural world and in humans.
Yeah it's worth remembering that the dot com bubble didn't come crashing down because the ideas weren't viable, we're very much living in a world dominated by the very things people were hyped on back then.
The dot com bubble came crashing down because we were still not there yet, at the turn of the millenium. We lacked the logistics to make large scale ecommerce viable, and we also lacked the smartphones to make it practical.
I generally feel we are in a very similar position right now. LLMs shows real promise, but also real limitations. I'm very skeptical it will bring significant utility in the next few years. Maybe in a decade or more, when other pieces of the puzzle are in place.
> I'm very skeptical it will bring significant utility in the next few years.
LLMs are already bringing significant utility to me. I don't think they're a good investment though: they're very expensive to train and somewhat expensive to run. And I'm extremely fickle and will jump ship to the next one without a second thought.
a) it isn't creating that value but taking it from somewhere else (past IME contestants and test preparers, StackOverflow, the job market, etc)
b) users fight to bid up the value of a single set of fixed capabilities, like rats fighting over the same scrap of leftovers. The market floods with generic copies of whatever stuff it can do.
That is to say it's utterly, humorlessly laughable to think that we're trending towards these things doing a whole economy worth of work.
Not sure why you are getting downvoted. AI only worked when you had an internet full of people taking their time to post/help others out. When AI takes those peoples jobs, they stop posting. I don't post anything AI useful on public sites (I answer peoples questions via DM if I want to help).
Imagine the constraint on every breaking change going forward being 'can AI be trained to handle these changes against the pre-AI training dataset'. Because AI is an inertia machine. It takes all the momentum from everything it touches. Next step after it takes the devs jobs is to freeze out all breaking changes that could make the AI training set useless (and we don't have a new one yet, because it's a new breaking change, and also because, you know, no one is posting knowledge for free AI scrapping anymore, yay, huge step forward for humankind!!!). Inertia machine sucking the momentum out of everything.
They tried working with a movie studio for a video tool. They needed more movies than the output of the studio. How do you train in new things if you just happen to need 5 studios worth of 'new thing' but output is all from 'old thing' and AI generated? Inertia machine.
I hope the AI strategy of companies like Amazon and Apple is beginning to make more sense. Staying out of trouble sometimes requires a bit more discipline than seems rational to the tech enthusiast community at first glance.
These companies cannot turn on a dime. I would be very surprised if Microsoft isnt secretly developing a doomsday recovery plan right now. They got very deep into Narnia this time. I have a feeling this particular game of musical chairs will end much more abruptly than the prior ones.
Why do you expect intelligent strategy from a company that is actively enshittifying their most critical product (Windows) at a time when it is on a downward trajectory of relevance (linux and macos are both perfectly viable and well supported platforms).
I have a hard time with this argument when Win32 is currently the most stable ABI on linux. I just got done playing around with Elden Ring via Proton on my Steam Deck and it's very obvious what the right solution is from an end user perspective.
Windows, despite the irrefutable enshittification, is still orders of magnitude more productive in a UI/UX/human/team setting. Anything linux that has to touch a non technical human needs a billion dollar effort to smooth over the rough edges. Even in the case of Steam Deck, I had trouble getting the machine going for the first hour.
> Windows (..) is still orders of magnitude more productive
Is it really, though? Most of the work in the Business Factory is done using cloud software these days. The OS itself has become mostly irrelevant to the end user and has been reduced to the web browser's runtime.
The rest is going to depend heavily on your industry, with some tooling just being better suited to a specific platform. Creative industries? MacOS. Web development? Linux. CAD? Windows. Use the wrong platform, and even if it technically works, you could still end up in a world of pain rather than having it Just Work.
Trying to hammer a square peg into a round hole is always going to lead to friction, that is not a unique Linux-only problem.
I don't speak for all consumers, but at least I prefer a company that puts on a good show of garnering trust even if the UX is eroding. Apple's security and privacy measures all make sense. They do still require some measure of trust, but they are not overtly saying "pay us annual subscriptions so that we can monitor all activity on your personal computing device". That's a business model that erodes customer base faster than execs can snap out of their reality distortion fields. I wouldn't want to be an MS shareholder right now, but I wouldn't mind owning Apple.
In the 2008 housing bust, there were NINJA loans (no income, no job, no assets).
This time around, each GW ai-datacenter costs 40B of which say 20B is debt. The only profits coming out of these data centers are through the ad business models for meta and google, and the cloud business models for the hyperscalers. The rest is funded by equity or debt or capex. It seems likely that the tax-payer will be on the hook for the debt down the road given how ai datacenters are being projected as critical infrastructure - because - the profitability of the new investments are yet unproven and speculative.
> For OpenAI to actually receive its $100 billion in funding from NVIDIA will require them to spend roughly $325 billion — consisting of $125 billion in data center infrastructure costs and $200 billion in GPUs.
Sounds about right to me. Jensen Huang is playing well not as a business but as a global actor.
Yeah it seems like the essence of this deal is that Nvidia is selling their chips in exchange for stock in AI companies. Makes a ton of sense, Nvidia has more cash than they need and it’s a great investment.
I wonder if OpenAI starts getting looked at for antitrust at some point. They now have significant ownership by Microsoft and Nvidia, 2 major parts of the AI supply chain.
It makes perfect sense for Nvidia to own shares of Open AI if one remembers that Open AI is still private.
While I wouldn't invest in Nvidia (not now with the AI bubble liable to pop at any moment) the reason many people have is because they couldn't invest in Open AI (aside from via MSFT which is a less pure AI stock).
So Nvidia investors now get what they wanted all along: exposure to Open AI.
AI investment is more like an infrastructure investment. The telecom boom was the same, and so was the cloud boom, and to some extent, the dotcom boom too.
> Intertwined
And that is the _point_, this same pattern existed in all those previous instances too. OpenAI/Stargate and so on are just "fronts" for a team effort investment into building wildly unprofitable infrastructure costing upwards of 1T. e.g Saudi does not give a hoot about LLM technology itself, its just that there is infra being built, and once it is done, it will lock in energy demand in a massive way, and so it makes sense to help build this infra. Similarly for nvidia/gpus, which is why they invest in openai and such.
All the money people are dumping into this now, will be made back on the millions of small million dollar companies that will build products on top of this infrastructure, once it is built (which causes the money to move out of this and onto those smaller product companies - this is the market crashing/bubble bursting). I don't need to point you at the various SaaS/whatever companies making a killing on top of the extremely unprofitable cloud investments of the past, or the absolutely insane economic reach telecom has enabled today.
During this push to build the infrastructure, there will be a lot of short-term investors trying to make easy cash by greater-fool investing -- they have no intention of staying and building product companies after the crash. A portion of these that don't anticipate the crash's timing will lose lots of money.
Unfortunately, if Wall St. and such package this debt along with other debt that is bought by institutional investors/bonds/pensions, or if these guys and other wide-reaching funds buy the volatile debt themselves, then everyone who is connected to that (including grandma, including aunt's house) is exposed to that risk. This is what will decide whether it's going to be a tech bubble problem or a financial crisis.
And almost surely, the job market will dive for a while [1], since jobs depend on cash flow, and cash flow will dry up in the time period between the "infra building" state, and the "now we have high-margin products on this infra" state.
[1] The key thing is, and this is the primary problem, what "a while" is, is dependent on broader factors. The ability to pick up pace again after a bubble bursts will be dependent on the general economic health of involved countries as a whole. This is because job market diving leads to consumer/real estate/etc etc falling i.e wide reaching negative feedback loop = "macro slowdown"
The weird crisscrossing relationships make me think of Collateralized Debt Obligations during the 2008 housing crash.
Everybody's valuation depends on everybody else's valuation and a bad revelation takes everything down.
In 2008, the system collapsed because politicians and global institutions hadn’t yet fully embraced debt-fueled illusions as the only path forward. Back then, Ponzi-like schemes still carried stigma, they weren’t openly endorsed as policy. Today? When every government and leader treats infinite debt as inevitable, and growth itself hinges on ever-expanding financial mirages, there’s no brake left on the system.
To be clear: I’m not calling AI a Ponzi scheme. I genuinely value this technology. But nearly everything else is: the markets, the policies, the promises.
It's already been decided that the debt will be inflated away.
At this point it's just been who has been paying attention. Look at gold's breakout this year, it's not happening in a vacuum.
Inflating the debt away doesn’t work unless the budget is also balanced.
Otherwise what is inflated away will be recouped by the interest rates when forced to keep borrowing.
> To be clear: I’m not calling AI a Ponzi scheme. I genuinely value this technology. But nearly everything else is: the markets, the policies, the promises.
Both things can be true. The technology may be valuable, and the investment in the technology may make zero sense from a financial perspective.
Using some sort of circular investment scheme to take on debt seem like some sort of Ponzi scheme to me.
... also sometimes a bubble is just a brutal unnecessary wealth transfer between generations
everyone was crying how unsustainable these real estate prices are ... and then they kept going up still.
because supply fucking stagnates, yet demand in cities rises with the force of an angry god (cross-financed by the whole economy, of course)
https://www.fullstackeconomics.com/p/the-2000s-housing-bubbl...
Same thing with Enron. They spun their money losing projects off into new businesses that were capitalized from Enron stock (which kept going up) and so somehow all of these spin offs were also solvent but only because of the value of the stock they had, which only went up because Enron was not showing the losses they would have shown if not for their increasing stock.
It's always the same idea, people just find different contortions to make it seem legit this time.
Yeah, feels similar to the various crypto perpetual motion machine scams of "we'll use our own token as capital, but the token only has value because people believe we have capital"...
We're one bad Nvidia release away from the entire market crashing down, and given Nvidia's penchant for sometimes just shitting themselves for a release cycle or two it seems insane to hold the entire market on their back.
Haven't it already happened when DeepSeek came out?
Yes. Every single stock in the S&P500 took a dive that day
Exactly.
I feel like this tbh:
AI Skeptic: Sure its profitable but its a bubble...
AI guru: Sure it may be a bubble but its profitable...
Pick your sides logically because bubbles (by definition I think, are profitable till they aren't)
Most people doing some investing have heard that diversification is important, but I think a lot of people forget that thit employment sector is part of that. I keep thinking of those Enron employees whose 401ks were all stock in their own employer.
As software engineer, that means there are reasons to avoid investing in AI stuff, regardless of what I think about its trajectory.
In this case I feel like it's the opposite. If generative AI really succeeds, most software devs will be out of job, in which case profits from those investments could become useful. If it flops, then there's a greater chance devs will be still needed.
If these things really become good enough to automate software engineering then it’s just a matter of time before they are used to automate all information work.
That would be such a radical societal transformation that I’m not sure we would come out of the other side even having a capitalist society.
Truth: its only profitable for nvidia, everyone else is just setting cash on fire. talk of bubbles is irrelevant.
Phase 1: Collect underpants. Phase 2: ?? Phase 3: Profit.
Everybody has starry dollar signs looking at last part. CEOs are really bunch of pretentious little boys (and few girls) cargo culting each other, and showing very little innovation or originality... Clearly enough for markets, till its not.
There’s maybe a better way to phrase it but you’re 100% correct re: innovation/originality.
It's profitable for a large swath of hardware and datacenter adjacent companies. Look at AVGO, now trading at 1.5 trillion (which may or may not be overvalued, but the ryzen evaluation does reflect significant windfalls from AI spending). Optical interconnect/photonics companies, actual server rack builders, you name it, the pick and shovels companies are having an absolute boom in real terms, not just valuations.
I think the article points quite well out, these profits cannot be taken at face value, if they are financend by Nvidia in the form of investments.
As AI skeptic I must also present question how profitable? Unlike previous "tech" and products. There might not be marginal costs for extra units. Instead each generated answer or message use significant amount of power and needs large physical investment in infra.
And if generating those messages are cheap, well there might be competition as price maters more than quality to enough of users.
Yup.
See, I am not an AI skeptic in the sense that I don't think the tech is great, I mean its kinda great but its also a lot overhyped tbh, but I mean its definitely a mix bag of opinions for me imo
But there are some people who think that just because a tech is great fundamentally makes it oh so lucrative and profitable.
That is the one thing that I really really took away from intelligent investor. And I think he even paraphrased it that this should be the one thing you should take away from the book iirc but I am not sure
Its that, just as how historically airplane companies have been kinda bad in profit even though they are technologically marvels. It doesn't matter the tech if there is a P/E mis-match imo / stock price is overvalued.
The same goes for tech.
You can appreciate tech while still thinking that its sort of being a bubble/shit's not good.
What are your thoughts?
… Wait, what on earth makes you think it’s _profitable_?! Are you using WeWork’s ‘community-adjusted EBITDA’ (a measure of ‘profit’ that was basically just revenue) or something?
And all of it just driven on vague statements of "AGI next year" (a year ago) and now "cancer cure on 10 gigawatts".
Almost every podcast nowadays is just "Where is all this money coming from?", "This is just infinite money and you are just out of the loop." Feels so weird to hear.
I have actually become less skeptical about claims like this over time.
I didn't expect LMs to be able to attack IMO problems this soon. There's also this video stuff recently discussed here, where it was explained that video models can be prompted to segment, solve blind deconvolution problems, solve maces, etc.
I'm not sure it's going to work out economically-- I think a crash is unavoidable because P/E ratios for firms like Tesla of 200 or whatever it is are silly, but I think that technology is going to keep evolving throughout and I don't see why some kind of mild not-quite-AGI-but-beating-humans-on-what-we-pay-humans-to-do-for-their-jobs type thing is not achievable.
If these video models get better and more available we might actually be able to use them to spot patterns in the natural world and in humans.
Yeah it's worth remembering that the dot com bubble didn't come crashing down because the ideas weren't viable, we're very much living in a world dominated by the very things people were hyped on back then.
The dot com bubble came crashing down because we were still not there yet, at the turn of the millenium. We lacked the logistics to make large scale ecommerce viable, and we also lacked the smartphones to make it practical.
I generally feel we are in a very similar position right now. LLMs shows real promise, but also real limitations. I'm very skeptical it will bring significant utility in the next few years. Maybe in a decade or more, when other pieces of the puzzle are in place.
> I'm very skeptical it will bring significant utility in the next few years.
LLMs are already bringing significant utility to me. I don't think they're a good investment though: they're very expensive to train and somewhat expensive to run. And I'm extremely fickle and will jump ship to the next one without a second thought.
Sure, but is this a degree of utility that stands in proportion to the trillion dollar valuation of the market sector?
That's the mirage of value. It's a mirage 'cause:
a) it isn't creating that value but taking it from somewhere else (past IME contestants and test preparers, StackOverflow, the job market, etc)
b) users fight to bid up the value of a single set of fixed capabilities, like rats fighting over the same scrap of leftovers. The market floods with generic copies of whatever stuff it can do.
That is to say it's utterly, humorlessly laughable to think that we're trending towards these things doing a whole economy worth of work.
Not sure why you are getting downvoted. AI only worked when you had an internet full of people taking their time to post/help others out. When AI takes those peoples jobs, they stop posting. I don't post anything AI useful on public sites (I answer peoples questions via DM if I want to help).
Imagine the constraint on every breaking change going forward being 'can AI be trained to handle these changes against the pre-AI training dataset'. Because AI is an inertia machine. It takes all the momentum from everything it touches. Next step after it takes the devs jobs is to freeze out all breaking changes that could make the AI training set useless (and we don't have a new one yet, because it's a new breaking change, and also because, you know, no one is posting knowledge for free AI scrapping anymore, yay, huge step forward for humankind!!!). Inertia machine sucking the momentum out of everything.
They tried working with a movie studio for a video tool. They needed more movies than the output of the studio. How do you train in new things if you just happen to need 5 studios worth of 'new thing' but output is all from 'old thing' and AI generated? Inertia machine.
I hope the AI strategy of companies like Amazon and Apple is beginning to make more sense. Staying out of trouble sometimes requires a bit more discipline than seems rational to the tech enthusiast community at first glance.
These companies cannot turn on a dime. I would be very surprised if Microsoft isnt secretly developing a doomsday recovery plan right now. They got very deep into Narnia this time. I have a feeling this particular game of musical chairs will end much more abruptly than the prior ones.
Why do you expect intelligent strategy from a company that is actively enshittifying their most critical product (Windows) at a time when it is on a downward trajectory of relevance (linux and macos are both perfectly viable and well supported platforms).
I have a hard time with this argument when Win32 is currently the most stable ABI on linux. I just got done playing around with Elden Ring via Proton on my Steam Deck and it's very obvious what the right solution is from an end user perspective.
Windows, despite the irrefutable enshittification, is still orders of magnitude more productive in a UI/UX/human/team setting. Anything linux that has to touch a non technical human needs a billion dollar effort to smooth over the rough edges. Even in the case of Steam Deck, I had trouble getting the machine going for the first hour.
> Windows (..) is still orders of magnitude more productive
Is it really, though? Most of the work in the Business Factory is done using cloud software these days. The OS itself has become mostly irrelevant to the end user and has been reduced to the web browser's runtime.
The rest is going to depend heavily on your industry, with some tooling just being better suited to a specific platform. Creative industries? MacOS. Web development? Linux. CAD? Windows. Use the wrong platform, and even if it technically works, you could still end up in a world of pain rather than having it Just Work.
Trying to hammer a square peg into a round hole is always going to lead to friction, that is not a unique Linux-only problem.
I mostly agree with you but apple is doing its best to enshitify MacOS.
I don't speak for all consumers, but at least I prefer a company that puts on a good show of garnering trust even if the UX is eroding. Apple's security and privacy measures all make sense. They do still require some measure of trust, but they are not overtly saying "pay us annual subscriptions so that we can monitor all activity on your personal computing device". That's a business model that erodes customer base faster than execs can snap out of their reality distortion fields. I wouldn't want to be an MS shareholder right now, but I wouldn't mind owning Apple.
Data-center debt is the new sub-prime.
In the 2008 housing bust, there were NINJA loans (no income, no job, no assets). This time around, each GW ai-datacenter costs 40B of which say 20B is debt. The only profits coming out of these data centers are through the ad business models for meta and google, and the cloud business models for the hyperscalers. The rest is funded by equity or debt or capex. It seems likely that the tax-payer will be on the hook for the debt down the road given how ai datacenters are being projected as critical infrastructure - because - the profitability of the new investments are yet unproven and speculative.
> It seems likely that the tax-payer will be on the hook for the debt down the road
Already happening. The tax/rate-payers are already on the hook for the cost of building new electric power generation [1]
[1] https://www.axios.com/2025/08/04/electricity-costs-bills-dat...
https://archive.ph/gMDEs
> For OpenAI to actually receive its $100 billion in funding from NVIDIA will require them to spend roughly $325 billion — consisting of $125 billion in data center infrastructure costs and $200 billion in GPUs.
Sounds about right to me. Jensen Huang is playing well not as a business but as a global actor.
Yeah it seems like the essence of this deal is that Nvidia is selling their chips in exchange for stock in AI companies. Makes a ton of sense, Nvidia has more cash than they need and it’s a great investment.
I wonder if OpenAI starts getting looked at for antitrust at some point. They now have significant ownership by Microsoft and Nvidia, 2 major parts of the AI supply chain.
Won’t taxes be a major drag on this circular passing around of money from business to business?
What taxes? No profits no taxes.
Unless you're talking about employee or consumer taxes, but that's unrelated to businesses passing around money.
Would be funny if individuals could do the same. "Sorry IRS, even though my income is $100k, the cost of living took all of that revenue."
When you own your own business that’s pretty much how it works.
It's all non-taxable service/infrastructure/personnel deals and not cash.
"It is what it looks like, in other words: a small group of large companies handing money back and forth."
The cure to this is less software and more hardware. It’s hard to lie with hardware. Embodied AI helper robots when?
What role do ETFs play in this?
It makes perfect sense for Nvidia to own shares of Open AI if one remembers that Open AI is still private.
While I wouldn't invest in Nvidia (not now with the AI bubble liable to pop at any moment) the reason many people have is because they couldn't invest in Open AI (aside from via MSFT which is a less pure AI stock).
So Nvidia investors now get what they wanted all along: exposure to Open AI.
AI investment is more like an infrastructure investment. The telecom boom was the same, and so was the cloud boom, and to some extent, the dotcom boom too.
> Intertwined
And that is the _point_, this same pattern existed in all those previous instances too. OpenAI/Stargate and so on are just "fronts" for a team effort investment into building wildly unprofitable infrastructure costing upwards of 1T. e.g Saudi does not give a hoot about LLM technology itself, its just that there is infra being built, and once it is done, it will lock in energy demand in a massive way, and so it makes sense to help build this infra. Similarly for nvidia/gpus, which is why they invest in openai and such.
All the money people are dumping into this now, will be made back on the millions of small million dollar companies that will build products on top of this infrastructure, once it is built (which causes the money to move out of this and onto those smaller product companies - this is the market crashing/bubble bursting). I don't need to point you at the various SaaS/whatever companies making a killing on top of the extremely unprofitable cloud investments of the past, or the absolutely insane economic reach telecom has enabled today.
During this push to build the infrastructure, there will be a lot of short-term investors trying to make easy cash by greater-fool investing -- they have no intention of staying and building product companies after the crash. A portion of these that don't anticipate the crash's timing will lose lots of money.
Unfortunately, if Wall St. and such package this debt along with other debt that is bought by institutional investors/bonds/pensions, or if these guys and other wide-reaching funds buy the volatile debt themselves, then everyone who is connected to that (including grandma, including aunt's house) is exposed to that risk. This is what will decide whether it's going to be a tech bubble problem or a financial crisis.
And almost surely, the job market will dive for a while [1], since jobs depend on cash flow, and cash flow will dry up in the time period between the "infra building" state, and the "now we have high-margin products on this infra" state.
[1] The key thing is, and this is the primary problem, what "a while" is, is dependent on broader factors. The ability to pick up pace again after a bubble bursts will be dependent on the general economic health of involved countries as a whole. This is because job market diving leads to consumer/real estate/etc etc falling i.e wide reaching negative feedback loop = "macro slowdown"
[dead]