Election euphoria and hangovers,

Sobriety the following day,

$8,000 for a video card,

Empty boxes on Christmas day.

Can't even rhyme without AI anymore.

Texas: so much spent

Wind blows over clear acres

Buildouts are now dead?

Nvidia got my money,

Micron a little as well,

AI corps with their hands out ?

they can go to hell. :}

Got me a 3090

Cost me 3090

Dunno why I did dis

Guess let's try and see

GPUs are getting dearer,

The models still hallucinate,

I asked AI to write this poem,

Now I have to validate.

coding is forever

AI took my job

the old web was more simple

I miss irc

rakim?

My 3090s I bought at launch would sell for more than I paid.

More than double the price, likely.

and when your girlfriend hears you say that,

you see that investment has parlayed. :}

Nice infill. Well done.

Election inflection, my brokerage account is a mess. The NASDAQ goes down, I still think it's the best.

This time is different, my artificial fiend says. The tokens are worth it, as they spin in the wind.

My net worth goes to zero, but there should be a hero, rescuing me, sometime during a bailout in 2033.

Cloudflare is a steal at $240 IMO.

Regardless of what happens to the AI models, you will still need protection a decade from now.

Not to mention the most comprehensive platform to use with AI, they will inevitably eat Lovable / Repl's lunch.

Agreed on the "steal at $240".

Cloudflare is not competing with app builders like Lovable or Repl though. They are the underlying infrastructure for companies like that. This is why they will win in the AI era.

Lovable is hosted on Cloudflare: https://x.com/CloudflareDev/status/2113651157721600492

They're saying that it's trivial for Cloudflare to go up the stack (build Replit) while it's non-trivial for Replit to go down the stack (build Cloudflare).

It's trivial for those providing internet links to go up the stack and cloud data centers but they typically don't.

Staying in your lane is often a better choice.

Maybe expanding through acquisition is the best of both worlds. So replit might be bought.

I'm not expressing an opinion on whether they should or shouldn't.

Why would either of them do either of those? They seem to be different businesses.

Network effects make it harder for Cloudflare to build Replit than it might seem, too.

What network effects?

And the reason for Cloudflare to do it is because there are several (apparently) very juicy businesses to be built by slapping a chat UI and off the shelf coding agent on top of Cloudflare infra... Not saying they should do this, but the rationale is pretty self-evident.

The reason for Replit to try going down the stack is platform risk and compressing margins from competitors who also have the brilliant idea of slapping a text box and off the shelf coding agents onto Cloudflare.

It's not trivial to change your entire business. Cloudflare is B2B focusing on enterprise sales. These app builder companies are basically B2C and lower end B2B.

By this logic every single company on the planet would be a single-product company. The reality is that companies expand their offerings all the time – despite the cost, complexity, and risk of doing so.

A great time to expand your offerings is when there's an adjacent offering that's producing outsized returns for someone else, is easily replicable, and which you have an asymmetric advantage on.

I think everyone knows that when someone says "it's trivial" for a business to do something, it doesn't mean it's actually trivial. Doing anything of any value anywhere is non-trivial. It's shorthand for "doing Activity X is almost certainly achievable with an acceptable outlay of risk for Business Y."

> By this logic every single company on the planet would be a single-product company.

This is absolutely not true, and proof that you completely misunderstood what I said.

You took an upmarket B2B infrastructure company and compared it to a low-end B2B/B2C software company. That is a completely different type of business.

Cloudflare launches new products and offerings all the time - and all B2B within their market space. The difference is that if they did what you suggest (make a Lovable), it would put them in a position of competing with their own customers, and it would have a chilling effect on selling more infrastructure to other companies who would then fear competition as well. It's not that they can't do it. It's that it is not wise for them to do so, and it's a different type of business entirely.

As I understand it, very little of Replit and Lovable (especially) are actually B2C. A lot of it is internal teams at mid-sized companies, which are a huge and demonstrably very fruitful customer segment, and one that Cloudflare does in fact serve already.

Cloudflare has already started releasing products that point in this direction. Not sure how far they will (or should) go, but it's really not categorically ridiculous or impossible or nonsensical, as you're implying.

https://blog.cloudflare.com/cloudflare-os/

Neither are trivial but I would wager cloudflare is the easiest to replace because it's the most mechanical and price sensitive.

It's like VPN service. Some other party comes along and offers it at 40% of the cost, you can do that.

Lovable is more nuanced. It takes more to move away, and there's just no reason to. The unit cost of Lovable buyeres is negligible aka less buyer sensitivity

Lmao, they’re just wrappers around ChatGPT. You could replace them in a day.

It takes decades to build the kind of network cloudflare has.

“Please mr bezos, can I connect my new trivial network to yours?” “0.08/GB :)”

LMAO you have it complete upside down, and if you think Lovable is a 'wrapper' around AI maybe you should try building a working app.

Lovable is a layer of abstraction, becoming as as complex as Shopify.

"It takes decades to build the kind of network cloudflare has."

It takes literally no time. Cloudflare's network could be emulated with proper planning and enough budget, and turned on instantly. 'Servers in 300 cities' is a medium sized challenge, but most importantly, it's a relatively clear path.

On the customer side, Cloudflare (in most cases) could be replaced as quickly as individuals replace their VPNs.

Shopify for example is ' just some siple HTML and checkout' - of course not - they are dominant and growing because there's a lot of complex interdependence, switching costs are much higher, their buyers are less technical and much less likely to want to change, and building a Shopify replacement involves hitting a lot of checkmarks.

Lovable started as a wrapper just as Shopify started with something simple, but they've quickly evolved.

AWS could snap their fingers and decide to knock out Cloudflare, it's a 'Commodity Plus' that came to the fore in a time when a specific need was there, and now people are turning to it out of convenience.

Of Lovable, Wix, Shopify, Figma, Stripe - Cloudflare is in the riskiest position because of the inherent commoditizability of their tech and the relatively low switching costs.

The SaaS component of Shopify is also trivial now. That's not where Shopify's moat comes from either. You are very confused.

> Cloudflare's network could be emulated with proper planning and enough budget

lmfao

Whats Shopify's moat then?

No.

Shopify's core offer is a very long gnarly tail with any number of detail and moving parts, a massive eco system of 3rd party vendors, integations, and developer community.

Their service is sticky and switching costs are high.

It would literally cost more in Claude Code tokens to hack a prototype, than to sign up and host Shopify and get 100x the features. It's $0 to build the prototype and $1/mo to literally have a full product for the first 3 months.

At the same time, Claude Code can build you a full variation of Cloudflare's core product, and with less than $1M you can scale across 300 regions if you really put your mind to it.

Cloudflare is competing with Akamai, and a few others. Not some content hosting outfit.

Lovable is one ChatGPT/Claude update away from extinction, IMO.

Our designer uses some some of open-source Lovable. I don't remember the name, it's just pointed to our liteLLM gateway. A dev helped him with the setup, so there's still a bit of value in lovable's "it just works", but it's so much cheaper someone is bound to eat their lunch.

During the dot-com boom, Cisco was the underlying infrastructure of the Internet. A lot of investors that believed themselves to be savvy bought Cisco stock. Their reasoning was that individual dot-com startups may go under, but the Internet itself was here to stay. In practice, the Cisco stock price peaked in March 2000, and anyone who invested at the peak would not have broken even (in nominal dollars, not real dollars) until December 2025.

The investors were right that the Internet would be important, and that Cisco would continue to be an important manufacturer of networking infrastructure. This just fundamentally did not matter because after the dot-com bubble popped, the market decided that Cisco simply wasn't worth the price it was selling at during the height of the bubble.

In an April 2002 interview with Bloomberg Businessweek, Scott McNealy, then CEO of Sun Microsystems, reflected on investors paying 10x revenue for Sun stock at its dot-com peak ($64/share in 2000):

At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don't need any transparency. You don't need any footnotes. What were you thinking?

Now this analysis is imperfect... but it's good enough.

For reference Cloudflare trades at 39x revenue

A tech stock paying dividends? It'll never happen.

hehe

https://giftarticle.ft.com/giftarticle/actions/redeem/8605e6...

Uh.. The big guys do.

Yeah, but they just do that for inclusion into some investment products that require a dividend.

Share buybacks are always better for the company and investors.

Ever looked at MSFT or AAPL’s dividends? It’s a token “here’s your fucking dividend, now go away” percentage. (I’m sure it’s actually to placate funds that require a dividend, but I repeat myself.)

Why would you want a dividend? It’s mathematically better for a business to do share buybacks and allow investors to choose when to sell shares so they can minimize tax liability.

That depends a whole lot on your tax jurisdiction, your other income and your investment strategy.

I don't know of any jurisdiction in the world that taxes unrealized gains in publicly listed equities.

In no scenario does losing control of at taxable event benefit the taxpayer.

Australia has one of, if not the highest rates of CGT in the world.

ASX dividend stocks are popular with retirees in particular because the dividends are fully franked, meaning you get a credit for the tax already paid on the dividends by the company.

If you’re in a low enough tax bracket, this can turn into a tax refund if the tax the company paid exceeds your own personal tax liability.

Interesting, thanks for the info.

No one is saying they want a dividend, I'm explaining how small the dividends of big tech companies are.

Yeah big dividends are for companies that can't do anything better than the money.

This isn't 2010. Almost all big tech companies are paying dividends now.

That analysis completely neglects growth.

Obviously you wouldn't pay 10x revenue if you expect revenue to be flat for the next 10 years.

No wonder that company no longer exists with a CEO that doesn't get that.

Cloudflare's growth is capped to 100% of internet traffic. it's already at 20%.

Internet traffic is projected to grow 25% YoY over the next decade.

Most of that is bot traffic.

Sounds like a new business expansion opportunity for Cloudflare.

What does that even mean? Revenue is measured in dollars not in % of internet traffic. They could "own" 100% of internet traffic and still have growing revenue.

That assumes 100% of Internet can or would be willing to adopt Cloudflare, which has no real basis.

The EU is finally waking up to the fact that putting all its eggs in the U.S. basket is a bad thing. China is enormous, and they're not going to go all in on Cloudflare either for a myriad of reasons. And a bunch of folks just don't like nor want to do business with the company and its CEO.

you're right on growth being excluded, which is why I said the analysis is imperfect.

Cloudflare is now a mature company, they don't have a huge amount of room for growth, and no, they will never sit in front of the entire internet.

"In the short term the market is a popularity contest; in the long term it is a weighing machine." - Warren Buffett

Here's the valuation though. Percentage of total web traffic going through Cloudflare.

- 2016 ~3.9%

- 2017 ~5.3%

- 2018 ~6.6%

- 2019 ~7.6%

- 2020 ~11.2%

- 2021 ~15.4%

- 2022 ~19.4%

- 2023 ~18.0%

- 2024 ~18.9%

- 2025 ~19.2%

- 2026 (early) ~20.9% (with later snapshots higher, up to the mid-to-high 20s)

Combine that with consistently excellent execution and popularity, you get the valuation.

The quote comes from Ben Graham and it goes "In the short run, the market is a voting machine, but in the long run, it is a weighing machine"

You're confusing market share with not valuation. Also, look into business cycle theory from marathon asset management.

The four most dangerous words in finance "this time is different"

Not "I'm smarter than that"?

I’m not confusing market share with valuation.

I’m saying that 1/5th of global internet traffic runs through their servers. Period. Thats significant and if anything shows that there’s potentially a lot more opportunity.

All it takes is for that % of internet number to go down or stagnate and the narrative to change and that valuation will quickly snap back to reality.

Sure. As would be expected.

That's qThe person you responded to is a speculator.

Disclaimer that I'm a long-term Cloudflare holder, and that I've also sold NET in the past year.

I empathize with this view, however it is very hard to value businesses that have extremely high margins, and who grow revenue very quickly on existing products while they're adding additional products.

I don't think NET is a steal at 39x revenue. But at no point in the last 5 years has NET been available to purchase for <15x revenue [1].

During that time, it has had Gross Margins in the exceptional range of 70%-75%, and YoY quarterly revenue growth in the similarly exceptional range of 25-40%, which has increased in our post-AI agent software economy.

If you're a Ben Graham acolyte, you would have sat out of NET since it's IPO. However, if you're a Charlie Munger/Buffet admirer who understands the pivotal role NET plays in the software ecosystem (i.e. it's inside your "circle of competence"), you'd do well to consider the Mungerism:

"Forget what you know about buying fair businesses at wonderful prices. Instead, buy wonderful businesses at fair prices."

That still leaves as an exercise to the reader what a "fair price" is for NET, but (to me, at least) it's clearly a wonderful business.

[1]: https://www.macrotrends.net/stocks/charts/NET/cloudflare/pri...

It looks like Cloudflare generates $633mm operating cash flow a year, up 5% for TTM from 2025 [1]. I’m surprised that’s supporting a $95bn market cap.

[1] https://finance.yahoo.com/quote/NET/cash-flow/

How does that compare to other tech companies?

As an example, Palantir has a similar cash flow / market cap ratio. I didn't check many others.

now that they have most of the internet corralled I don't see why they won't start charging for bandwidth

IT Sovereignty is likely to be a growing trend after the past few years - including issues of Election interference not just by governments but by individual Tech CEOs. I think a lot of particularly Europeans have realized that putting all your eggs in American jurisprudence might -not- be the best way to go.

Cloudflare has a moat but it already smells like sewage.

I'd be very surprised if the internet isn't well on its way to being balkanised by 2036.

When I decide what price to pay for a business, it is about how much a business can earn in the future relative to other businesses, not about how much it earns now.

Given how much people have started actively looking for alternatives, and how much spray-and-pray Cloudflare's offerings now seem with so many launches every few weeks, steal is a bit too optimistic.

Yeah we are actively building our own alternatives due to excessive CF bills

You selling?

Im still crying about having sold it at 20

I’m still crying about taking a Dropbox offer over Cloudflare’s pre-IPO in 2016.

Yeah hindsight is incredibly frustrating.

Also owned a bunch of asml shares a decade or so ago. But it didn’t really move so got bored and sold. Good picks bad patience.

Cloudflare is in no position to eat lovable or Repl.

And frankly, they should basically be a commodity.

If anything, AWS or MS or other parties make it about as profitable as hosting web pages.

They have good potential for cloud services too. Competing with AWS is much more viable when you have data centres everywhere and a huge network.

Dude I made 2k off the earnings call tonight thanks to your comment. Thank you!

The beginning of the year 2000 style crash.

[delayed]

Bought a bunch of dips in the last 5 years until I had to sell all of them at one point, because they kept dipping.

People need a reason to route.

With the housing bubble, it was because people owned multiple homes then struggled to pay two mortgages as economic conditions degraded, and banks were willing to absorb losses if the homes were sold below the cost of the mortgage.

What is encouraging people to route from the stock market? Bond yields aren't high enough yet to encourage people to retreat from stocks, and there's no other alternative investments. Plus, so much of the S&P is held in 401ks. And I agree, economic hardship is not widespread enough for people with significant investment holdings to start selling them off to live. Those who are struggling are those who used to be struggling too (thus, no extra money for investments).

There are also a lot of set it and forget it index investors that won't buy a dip, but won't sell either (unless they experience those serious financial hardships). That's the group I'm in.

Just like I already did last time before the 2022 market crash? [0]

[0] https://news.ycombinator.com/item?id=29508238

Democrats are not going to try and stop AI or rein in AI. There is too much money at stake. They'll pass some regulations, sure, some data center rollouts might be blocked or modified, but they aren't going to stop the train.

They're not even going to do that. Trump isn't going to sign that. When was the last time Congress overrode a veto or played hardball (well the Democratic side anyway)? They have no fight in them.

I expect more action on the state & local front than federally

I suppose that's true. State and local does control most of the land use.

They don't have to. This particular train explodes on its own if it drop below 100 mph.

Even tepid regulation will destroy the "our TIA is the entire observable universe due to the potential of self replicating AI probes so we totally deserve 10 trillion dollars in investor capital" trade

I've seen this movie. I think it was called "The Bus That Couldn't Slow Down". It had Keanu Reaves and Sandra Bullock. IIRC it didn't end well for the bus.

They just have to uphold the existing laws. Start prosecuting SpaceX at the fedral level for runing gas turbines illegaly.

I was going to say that Democrats have no power to uphold laws, that's up to the executive and the national executive hasn't changed.

On the other hand a number of governors have changed (Texas in particular just went to a Democrat, and there are SpaceX interests there). They by definition can't prosecute on a federal level but they do hold some enforcement power.

[delayed]

The financial aspect/discourse is for the proletariat who prefer to pretend politics and risk of military conflict do not exist.

They won't stop it because China won't stop. Politicians have to avoid any appearance of xenophobia though (and to be certain many are personally not xenophobic, just saying optics matter to them), so they talk about jobs and wealth inequality as euphemism for ground truth; we aren't secure putting all our eggs in the China basket.

Arguably screwed up there already letting chips and robotics flow offshore while we focused on increasingly useless education in developer syntax and semantics.

They aren't going to stop AI, but they are not going to let the owners of the superintelligence inference engines become god emperors of the planet, and in that case why not just get 4.5% on some bonds?

Well, don't forget this is also about national security. China/state of choice AI going after your infrastructure & national secrets is going to take AI to defend against.

There's zero chance AI datacentres are going away, they are unfortunately a national security necessity now.

It's the "if we don't they will" thing again.

So now there is a new Cold War arms race and the us again has to develop something stupidly dangerous for „its own safety“?

I’m convinced the best thing that happened in the nuclear arms race is the beginning of a dialogue that resulted in the start and salt treaties.

Ai obviously needs something similar.

US just elected a bunch of people who ran on program "hurt US ai companies and help the chinese ones"

Many safe and good technologies were successfully sabotaged for populist and stupid political reasons, e.g. in nuclear power. Or less spectacular, think of the welfare loss due to the NIMBY-fied housing market.

[delayed]

Are we finally realizing "agents" are overrated and jagged in performance?

This is clearly voter sentiment about AI in general and big tech in general.

Most voters don’t know what agents are. Many of my coworkers in tech can’t even define “agent” correctly.

So no, the world is likely not suddenly agreeing with you about “jagged performance.”

My definition for an Agent is "a marketing term for long running LLM Chat sessions that has increased access to use your computer to complete tasks it cannot otherwise do by itself".

That's my attempt at a universal definition for technical and non-technical users. How does it compare?

[delayed]

A chat bot with a feedback loop.

> This is clearly voter sentiment about AI in general and big tech in general.

There is growing public sentiment about AI & Tech, but per exit polls that wasn't a Top 3 reason swing voters went blue (Economy, Wars, Corruption). Today's market correction is being driven by the majority in both houses of congress flipping blue. Trump and most Republican legislators were seen as broadly supporting AI / Tech and most Democrats are seen as being less supportive.

AI / Tech-friendly legislation is now likely to face a slower, more difficult path through committee and passage. IMHO, the actual impact of the political change is nowhere near 5% of company value, but outsized swings tend to happen on any adverse news when the market is already fearful they've bought into a high-priced bubble far in advance of actual earnings.

My hope is that this moment is a decisive but constrained tempering of market enthusiasm. But that sounds too reasonable, so…probably next week it’ll all be back to crazy town.

I agree. The best case would if this 5% drop in AI-centric tech isn't a 'dip', but the beginning of a gradual unwinding of the AI bubble. I'd take as a positive sign if 3 months from now AI-centric stocks had slipped another 5% but other sectors where slightly higher than today.

I think it is much simpler than that.

The Trump administration was expected to invest massively into AI, and money invested into AI is effectively free money for AI company shareholders, that free money is priced in the stocks. With the change in direction, investments are expected to be less, which means less free money, and therefore less valuable stocks.

So in other words the industry will have to survive without taxpayer funded welfare handouts. Got it.

Well, yes, but it is even more mechanical than this.

Here is the simplified version:

Let's say I have a company worth 1 billion dollars, publicly traded, 10 million stocks worth $100 each. I get promised $100M from the state (aka taxpayers), shareholders estimate there is about 50% chance I will actually get the money: $100M * 50% / 10M = $5. It means the stocks are now worth $5 more, so $105.

Now the government has changed, and gone are my chances to get that money, so the sock is back to $100.

It's not only about the people who were elected, but 44/45 ballot initiatives specifically aimed at restricting or banning data center construction passed.

Bedsides coding agents, which only work extremely well if you are a developers or you train a person with the right inclination I have plenty running that work quite well, they do data extraction and data entry from emails and documents. I run them with Chinese and other open models on a bunch of H100, they cover tens of thousands of emails per month and as many documents.

Whenever I see daily stock results I try to reframe it in a longer term. Interestingly, Nasdaq is only up ~4% YoY.

This is surprising to me, given how much acceleration there has been in AI capabilities since the same time last year. I guess costs and risks are accelerating just as fast.

The problem is that the economy is kinda flatlining and only the AI bubble (that is also hoovering up other, seemingly unrelated parts of the tech sector) is what makes this number as big as it is.

Stocks have been somewhat flat this year. Some big gains, but a lot of stagnation around the time the Iran war began. I got my hopes up yesterday, but the crash today puts us back to ~May depending on which index you're looking at.

Given the tariffs debacle and Iran war followed by the energy crisis being positive at all is a miracle.

The Trump-Tech Bro alliance guarantees of bailouts for data centre and AI brinkmanship seems no longer guaranteed to the market.

And is actually the only thing I’m sad about in this whole thing. Ecstatic about the blue wave sad that they’re going to restrict AI progress. It’s the future, and it would be a horrible move to curtail it.

Introducing moral hazard for AI investors is a bad way to spur on AI progress.

It's _your_ future perhaps. Not _the_ future.

We curtail literally millions of these "futures" every day around the world. They are called children. They are the literal future of humanity.

AI progress doesn't require doing it full ahead right now. Beyond the risks of getting out of control, you get bubbles if hype goes beyond economic reality. AI should be done more slowly with regulation and slower build out. Better to do it slowly than wreck the world with unexamined consequences.

It's only "progress" if it's making the world a better place. I have not seen LLMs do that at all. It only made everything worse.

As uncomfortable as this may be for the tech industry, I have been hoping for AI related stock prices to come back to reality. A market correction is a healthy thing so long as it doesn't turn into a collapse. IMO, some AI companies have ludicrous valuations considering their astronomical debt. A reality check may be healthy long term.

a reality check for a crazy person can result in a mental breakdown

Debt to Equity ratio thresholds are a common metric for lenders to call in loans.

[delayed]

Market is still up from 3 months ago

Yeah I'm not sure how Anthropic is going to IPO at this rate...

With more visits to the Vatican.

i died reading this lol

> Yeah I'm not sure how Anthropic is going to IPO at this rate...

There are plenty of suckers willing to gamble on a failing business (massive and rapidly growing debts, assets that can easily be cloned, no realistic path to profitability), so I don't think an IPO is off the table.

It had a big user base boost during the Cancel ChatGPT movement, but still not a viable business model, not at their current prices.

A collapse would be nice too.

Not sure if you're joking, but I go back and forth between this thought. Finance is not my forte, far from it for sure, but there's a part of me that hopes a collapse can at least open the door for future opportunity. A "reset" if you will. The younger generations are up against a massive wall when it comes to acquiring wealth (or even a reasonable means of living at this point), it would be nice to give them an equal chance. I know this is very likely a naive take, but it's the only hopeful aspect of a collapse I can accept.

That's what people said in 2008, instead, wealth was incinerated, the most vulnerable got hurt the most, while the already wealthy got bailed out and bought back assets at bargain bin prices. The wealth owning class would love a collapse.

Oddly enough, 2008 is exactly what inspired my comment and it's based off my exact experience back then. I couldn't afford investing in the market, I couldn't afford a home, and the interest on car loans were higher. All of that changed after the 2008 collapse. First I should mention that I was laid off and unemployed during some of it, so there was a huge negative impact for sure. What followed after though was amazing. I was able to invest in some $1-$5 stocks in the market that were previously not obtainable to me. This investment actually took me/my wife from being in debt living with my in-laws to completely out of debt and into our own place. Once I finally got employed again, I was able to save up enough just in time to buy a home at near the bottom with low interest. Car loans were also low interest. It was life changing and for the better in my situation.

This is actually kind of inspiring. Obviously, I still feel concerned about the parallels between the 2008 housing crisis and the current tech bubble bursting. But as someone who also wants to get into investing but feels to broke to do so, now I know I just have to wait until the world is burning (kidding, lol). All jokes aside, this is still interesting. Especially as someone who will live through both.

How would this give young people a chance? If they have cash to buy up assets cheaper then so do older rich people.

Please see my comment here, I think it answers your question: https://news.ycombinator.com/item?id=50385037

Your anecdote about getting lucky doesn’t answer the question, sorry. Rich people have money to buy cheap assets when shit hits the fan, unemployed people do not.

It really doesn't. You could've bought any $1-5 stocks in that time. You happened to buy the ones that made you money.

Unfortunately this is not what happens. The Big Short is a great illustration of a few things about collapses:

https://www.youtube.com/watch?v=0k5aVLi_yhM

When the market crashes, a lot of people lose jobs, and a lot of people die. Everyone suffers but those with money suffer the least, by far.

Not quite. Poor people suffer more in real terms, but rich people suffer more in nominal (dollar) terms. Nominal inequality gets reset.

Don't let the term "nominal" undersell this: it's nominal inequality that locks working people out of assets and imposes upon them the need to service the (otherwise) exponentially growing profit expectations of their economic complements. At no point in the cycle is it better to be poor than rich, but the contractionary quadrant is the one where the gap shrinks.

Not sure it works like that: https://pmc.ncbi.nlm.nih.gov/articles/PMC9122750/

2008 decreased inequality for a very short time, inequality increased after. The rich have the available assets to profit from instability and are able to ride out unemployment, for the poor a crash and losing their job can be existential.

> Nominal inequality gets reset.

Why would it? The wealthy people who haven’t allocated their capital to those assets that are depressed from a recession can reallocate to the depressed assets and end up even wealthier on the rebound. People with no money at all don’t have that opportunity to invest.

The stock market is $80T, cash is $20T. The former cannot "weather the storm" in the latter in aggregate, even though I'm sure there are individuals who successfully timed the market.

> At no point in the cycle is it better to be poor than rich, but the contractionary quadrant is the one where the gap shrinks.

The inflation being caused by all the "crowding-out" caused by AI overinvestment is currently incredibly harmful.

That really needs to unwind.

However much potential energy has been stored in it, is going to turn into kinetic energy in the subsequent correction/crash.

The best time for this to happen is as soon as possible, causing the least amount of damage.

I pretty much expect the damage to be immense, though, but that is going to be unavoidable at this point. However big the bubble is, it needs to pop.

In retrospect, we will find that there were truly idiotic decisions made in blowing up the bubble, and in the aftermath the wrong people will almost certainly get hurt, because that is just what we do these days.

There's not much incentive for institutional change when everyone's making money. Yeah, it'll hurt folks a great deal short term. But may be better for our kids long term.

[delayed]

At the very least we could buy hardware again at rational prices.

IMO OpenAI jumped the gun and rushed an immature product to be there first, no matter the costs. The other players saw it as a threat, and started running with the same carelessness. It has been spiraling since then, and while the product keeps improving, their business model hasn't demonstrated sustainability.

Their CEOs know it, and they must have their end game. I'd hate to think they'll just keep running until a hard crash. Hopefully small corrections will slow this down in a more controlled manner.

You forgot the bit where China undermines the whole business model by releasing open weight models.

much to our delight as peasants who were being lined up at the token furnaces of the big american labs.

That was a disruption if I've ever seen one, but they are also paying the price. Every LLM maker right now is losing money.

And I wholeheartedly thank China for doing this. The open weight models are fantastic, and make power consolidation of AI monopolies less likely. Open weights bring real competition to the space and help commoditize inference.

They won't mind a hard crash, as long as they get richer on the way.

I hope they go low enough I'm willing to buy some shares of ANT

I don't know - I think open source will outcompete them. What's their moat?

The moat is GPUs/TPUs, ram and compute. When you need $200k of compute to run the frontier models, you are likely to be renting access to generate your tokens.

Probably close to $1M+ if frontier models are truly 5T and above params.

Current RAM is no moat. Upcoming Compute-in-RAM is. And nobody has that built up at scale yet. So, while a moat might become possible, we only have yesteryear's hardware as "moat".

Can you explain what compute in RAM means?

I thought HBMs are technically the fastest possible thing for inference.

The academic term is now "Compute-in-Memory". That's MOSTLY what has suddenly been hiring SRAM and DRAM designers across the industry this year. It is part of the fast evolving field of doing inference efficiently. This has been all the rage in several Electronics conferences this year.

Please don't rely on my [inferior] explanation and search for yourself (start here for insance: https://www.google.com/search?q=what+is+compute+in+memory+an...). Asking about a new field is much better done with AI these days, because you can get it to explain just the interests and questions you personally have, rather than a generic and boring explanation.

In short, better than HBM is not having to move data in and out of memory at all or at least not as much. The compute part in inference is much simpler than the data hauling part.

Couple of examples: Check out Axelera's Europa board (upcoming) or their Metis board (existing). Or check out Mythic.ai which FINALLY managed to raise funds in Nov / Dec 2025. Ironically, her PhD thesis had been gathering dust before that.

That is not a moat. (and it is not theirs either) It just means that their models are highly inefficient that it requires a lot of compute to run them.

Open weight models such as Deepseek, GLM are just as good as the frontier closed models and already we have bank such as Revolut migrating off of frontier closed models and self-hosting. [0]

[0] https://x.com/guilleflorvs/status/2117379073785696395

Good hardware companies are now trading at far under ten P/E, hardly ludicrous valuations. Sure there are some poor companies out there, but Nvidia and Micron are not among them. Buying opportunity when things settle down.

Nvidia has not been a buying opportunity for a while now. Training new models is the moat it possessed. The models are as good as they can be and have diminished returns beyond this. TPUs by google and CPUs by AMD are eating into their inference margins.

Micron is a different beast though.

All the hardware makers are supply constrained, p/e reasonable, so nvidia has some more room to run. Though not be unicorn growth from here.

Mwahaha. Hope it all crashes down and burns.

The earlier it burns the better, because every day the bubble only grows larger otherwise.

It's a 4% correction, keep your pants on

Stopping DC rollout effectively works as calling the bluff of AI.

AI is a hyped up nothing burger? AI demand retreats, lots of vacant compute, revenues sink (and the DC hold ends up being a (small) blessing in disguise for the labs).

AI lives up to it's hype? AI demand surges, capacity is severely constrained, margins explode as inference costs soar (and the DC block ends up being counter productive knee-jerk behavior)

The only way this plays out in anti-AI favor is if people stop using AI and demand goes down. Even if it flatlines, labs can rebalance towards inference and start harvesting those huge margins.

A lot of AI use is subsidized to get DAU. The only truly productive applications so far are are R&D and SWE.

I'm starting to use it quite heavily and extremely productively for non R&D and non SWE work. It has transformed one aspect of my business, and that won't change -- this type of usage is highly productive, and only likely to grow.

Mind sharing some specifics? Being very siloed in software I don't see as much chatter around how people find an edge elsewhere.

The latest crop of models are extremely capable at classic (physics based) engineering tasks. Their incredible math ability as well as agent use allows them to plow through engineering problems, and they do it with knowledge that I have only heard grey beards talk about. Humans run through designs doing 1st order approximations and intuitive assumptions, but the models can just breeze through 4th order approximations on everything.

They used to not be able to read schematics, but now they can, as well as generate and simulate. They also have made incredible inroads into CAD and reading mechanical diagrams.

Right now I can say with very high confidence that there isn't a gap in ability so much as a gap in awareness of their abilities. On top of that the next round of models has apparently made strides in all these areas too.

> (and the DC block ends up being counter productive knee-jerk behavior)

I don't agree with your description of how the ban is going to be counterproductive.

There won't be massive inference margins. The DCs will get built, in some other country. And in all likelihood they will continue to be built elsewhere even after the block is lifted.

Great opportunity to buy the dip in a couple of weeks. If anyone thinks they can slow down or stop AI adoption by banning data centers, good luck with that... The Chinese built an AI empire with much less compute that exists today in the US.

[delayed]

The thing you're missing is that the political expenditure of AI in the US is massively tied with the GOP and the right. There's a reason why people like Elon Musk have been absolutely freaking out over the result.

This result means that unlimited data center expansion may not be on the table, and bailouts certainly aren't either. So with the leaders crashing out the uncertainty of AI expansion is now being properly priced into the stock.

[delayed]

Depending on how long the bloodbath goes on this could be a massive buy moment similar to: dot bomb, 9/11, 2008, covid panic.

AI is not going anywhere and will only grow more and more.

Also don't be discouraged by these anti-datacenter clowns. Most normal people don't understand where their doomscroll gets pumped out of every day and thinks the internet comes from their phone. These are the same people who are anti-powerplant and think electricity comes from a wall outlet.

No they aren’t.

Doom scrolling is nothing good for society and it’s with us only because extremely well funded organisations make money from it, and has weaponised it against the general population.

I am a high voltage tester and know electricity very well.

What kind of dogshit take is this? AI datacenters are a very different breed of facility in terms of their effect on their surrounding communities. Colossus is literally poisoning South Memphis.

Colossus in South Memphis has been running off the grid for over a year now.

You shoukd watch: https://hackertube.org/watch/t-8TDOFqkQA

Great comments to use as example of Poe's law.

If your industry pisses off "most normal people," then maybe it's not a problem with normal people, but... it's a problem with your industry.

Industry exists within the context of society. It would be great if SV tech bros could understand this reality.

All those people vote.

> AI is not going anywhere and will only grow more and more.

I agree, but I think it's easy to conflate AI (a technology) with current AI companies (who's value is based on a bet about how that technology will develop).

I'm not predicting anything, but its perfectly plausible for Anthropic and OpenAI to suffer massive corrections if proprietary frontier models don't lead to a "a few winners take all" market.

In the same way, the internet grew a lot since the early 2000s, but pets.com did not.

If this is now where this bubble pops, I have to point out that this has by far been the least fun bubble of my lifetime.

Remember the frenzy before the .com bubble? The nerds were finally winning! The housing one? Finally everyone could afford a house!

AI bubble? Layoffs for everyone, techbros turned fascists, impending doom somehow as a selling point. Like, wtf?

Of coursethe consequences were always shit, but that's a given in an economic crisis.

and lots of the growth is private

[dupe] https://news.ycombinator.com/item?id=50381623

Some more discussion: https://news.ycombinator.com/item?id=50381623