I don't know a single white collar worker who isn't using AI for their job. Not like forced, but like "Oh damn, this bot thing can do a lot of tedious leg work for me".
To think that people won't pay $60-$80/mo to continue using it is wild to me. In a white collar environment it pays for itself in a few hours of use.
If you focus on how much value AI brings to people (mostly in time saved), the bubble hardly looks bubbly.
Did Uber die when a trip across town went from $3 to $13? No. It's giving more rides than ever, 10x more than when it was $3.
I'm sure there will be some losers, but unlike the dot-com boom, the entirety of the population already has all the tools needed to leverage AI.
Why are there an endless flood of comments like this on HN and other social media insisting that because there’s such high demand, it’s IMPOSSIBLE that these tech companies are overvalued and over leveraging debt.
Reality is way more nuanced. Something can have high demand AND be on the precipice of financial catastrophe. See: Spirit Airlines.
Wall Street makes money from issuing debt, trading debt, and IPOs. They need to get the last two mega IPOs off before the curtain call on this era.
But they can only partially influence the market, they can’t control it. The question is if the market will let them get these IPOs off or if the jig is up.
Here’s an exercise for anyone curious: pull up the median stock in the S&P 500. Look at its P/E. Take 15 minutes and look through the company’s financials and figure out what you think about the quality of its earnings.
Then decide if that P/E is appropriate.
The bubble isn’t in just AI, the bubble is everywhere, and AI is its largest manifestation.
Subsets of HN just want to know how long before they need to withdraw their savings, or sell their position.
I would say growth is even expedited with high allowances for borrowing/leverage, but at the cost of increasing systemic risk.
Obviously the people who will suffer from this are the taxpayers, who don't get a say in the matter, so no one is going to stop and consider whether it's a bad idea to continue issuing more and more debt.
The creativity of the financial industry is quite insane. Combined with the scale-at-all-cost strategy in AI companies, this is a ticking time bomb, no doubt.
I think it is easy to forget that a revolutionary technology does not automatically make a viable business model. I think we are yet to see the real winners in this game.
I agree with you. Look at railroads, cars, computers, and other technologies that really did end up being world-changing. How many of the original companies are still around?
Sometimes I feel like OpenAI will end up like Fairchild Semiconductor: an early innovator that quickly became an historical footnote.
There's a kind of inconsistency in that he ends the video talking about overpriced stocks and how it's hard to short them but the title is about the $1.75tn in debt which seems to mostly be from professional investors, apparently:
>JPMorgan Chase and Morgan Stanley, private equity and credit giants like Blue Owl Capital, BlackRock, and PIMCO, alongside international commercial banks
who probably know what they are doing and read the footnotes.
My guess is that the lending is actually ok because there's a lot of real demand for compute. $1.75 tn is about 1.4% of global GDP which doesn't seem that silly in the AI boom.
36 comments
[ 0.22 ms ] story [ 95.4 ms ] thread1. — "The Big Market Delusion: Valuation and Investment Implications" - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3501688
The paper behind the "big market delusion" he discusses.
2. - "Do Stock Prices Fully Reflect Information in Accruals and Cash Flows About Future Earnings?" - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2598
This is the "accrual anomaly" paper Boyle describes.
3. - "The ‘Incomplete Revelation Hypothesis’ and Financial Reporting" - https://publications.aaahq.org/accounting-horizons/article/1...
Paper explains why information can be public yet still not be fully incorporated into prices when extracting it takes effort.
4. - "Limited Arbitrage in Equity Markets" - https://www.hbs.edu/ris/Publication%20Files/Limited%20Arbitr...
Mitchell and Pulvino work on the "limits of arbitrage."
5. "How Pervasive Is Corporate Fraud?" - https://www.chicagobooth.edu/research/rustandy/social-impact...
The paper on about one-third of corporate fraud is detected
6. "There’s never been a better time to commit financial fraud" - https://www.economist.com/business/2026/07/29/theres-never-b...
7. "Firm Data on AI" - https://www.nber.org/system/files/working_papers/w34836/w348...
The Bank of England study on executive AI usage and productivity.
To think that people won't pay $60-$80/mo to continue using it is wild to me. In a white collar environment it pays for itself in a few hours of use.
If you focus on how much value AI brings to people (mostly in time saved), the bubble hardly looks bubbly.
Did Uber die when a trip across town went from $3 to $13? No. It's giving more rides than ever, 10x more than when it was $3.
I'm sure there will be some losers, but unlike the dot-com boom, the entirety of the population already has all the tools needed to leverage AI.
Would Uber have died if a competitor kept offering $3 rides? Yes.
Reality is way more nuanced. Something can have high demand AND be on the precipice of financial catastrophe. See: Spirit Airlines.
"Aswath Damodaran: Big Tech Has No Idea How AI Pays Off" - https://news.ycombinator.com/item?id=49229981
But they can only partially influence the market, they can’t control it. The question is if the market will let them get these IPOs off or if the jig is up.
Here’s an exercise for anyone curious: pull up the median stock in the S&P 500. Look at its P/E. Take 15 minutes and look through the company’s financials and figure out what you think about the quality of its earnings.
Then decide if that P/E is appropriate.
The bubble isn’t in just AI, the bubble is everywhere, and AI is its largest manifestation.
Subsets of HN just want to know how long before they need to withdraw their savings, or sell their position.
I would say growth is even expedited with high allowances for borrowing/leverage, but at the cost of increasing systemic risk.
Obviously the people who will suffer from this are the taxpayers, who don't get a say in the matter, so no one is going to stop and consider whether it's a bad idea to continue issuing more and more debt.
I think it is easy to forget that a revolutionary technology does not automatically make a viable business model. I think we are yet to see the real winners in this game.
Sometimes I feel like OpenAI will end up like Fairchild Semiconductor: an early innovator that quickly became an historical footnote.
>JPMorgan Chase and Morgan Stanley, private equity and credit giants like Blue Owl Capital, BlackRock, and PIMCO, alongside international commercial banks
who probably know what they are doing and read the footnotes.
My guess is that the lending is actually ok because there's a lot of real demand for compute. $1.75 tn is about 1.4% of global GDP which doesn't seem that silly in the AI boom.