The current state of the economy - part two

aaronyuri

aaronyuri

aaronyuri

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My previous attempt at this thread was closed as at face value it did not clarify the goal of discussion.

Some of my previous posts in other threads triggered my idea of this thread. Examples:

Buy now or hope bubble bursts?

Tbh, if/when the AI bubble bursts we will be dealing with a global economic recession too. I would rather pay a bit more for ram than tightening up the purse strings even more :cry: We're essentially already in a recession with the AI bubble disguising it quite well. But the inevitable...
forums.overclockers.co.uk forums.overclockers.co.uk

DRAM Prices Surge 172% YoY with No Signs of Slowing Down

Wasn't it MSI that did it? I may not be remembering that right... I definitely remember MSI catching some headlines for that, other makes were probably at it too though
forums.overclockers.co.uk forums.overclockers.co.uk

The economy is being propped up by the AI pyramid of investment, with NVIDIA being at its peak. The meme is intended to ignite some discussion.

signal-2025-12-06-12-19-59-615.jpg


What are your thoughts on the current economic situation? What will things look like from here? The bubble can't continue indefinitely but what on earth is that going to look like when it does give up the ghost?
 
Bobmunkhouse said:
Well not sure the bubble will burst in the way people think....AI wont fail it will be a success and put 50% of office workers out of work....what will happen then is anybody's guess ....
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If 50% of the services workforce became unemployed, that would have a catastrophic impact on the economy. It is an interesting notion, however, and what I think could be a likely outcome. It would also be bloody terrible for a lot of service workers.

slinxy said:
My thoughts… I don’t worry about **** that I can’t control…

Let the whales worry about the marcos.
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The old adage of learn to accept the things you cannot change and change the things you cannot accept always rings true; no doubt about that.

For me, the world is far, far too interesting of a place to remain blissfully in my own bubble. I would be pleased if we have some economists or statisticians that could provide a thought or two. One can hope.
 
Bobmunkhouse said:
Well not sure the bubble will burst in the way people think....AI wont fail it will be a success and put 50% of office workers out of work....what will happen then is anybody's guess ....
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I am with you. I don't see this as a traditional bubble at all, it is the start of a very large automation shift. In reality this is financially advantageous to say 90% of companies on earth so I don't agree that this is some ballooning phase that is going to burst.
 
Uther said:
The way the world is currently going you'll be more worried about avoiding Russian missiles than AI in a couple of years!

:cry:
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A missile is a pretty instant way to go. I'd be dead and, well, I'd be dead. Can't spend a Saturday evening pondering about the future economy in that state.

The rise of AI could be a slow decline into poverty for many, and potentially sewing the seeds of a future society where owning anything becomes impossible except for a select few.

I know which one tickles my brain more.
 
aaronyuri said:
The rise of AI could be a slow decline into poverty for many, and potentially sewing the seeds of a future society where owning anything becomes impossible except for a select few.

I know which one tickles my brain more.
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Isn't this just the Luddite view? No different to the introduction of machinery for factory work?
 
If you create a system with 50% unemployment, that would be very damaging to a society, nevermind an economy. An economy is reliant on consumers buying, if you make consumers pennyless, how does that work? Part of the joy of being a billionaire is to have power over people. If most people are dissasociated from society, how does that work? Would the unemployed 50% push for communism in a world that's hopeless for them? There's some very real problems for both the rich and poor. And there's reasons the very rich put in social support measures in England to try and stop the equivilent of a French revolution or Communist take over
 
I watched a documentary about Heinz on YouTube a few weeks ago, in 1975 - 5,500 employed at Heinz factory, Wigan, UK, now less than 1,000 in 2025. Robots moving the pallets about to place on lorrys etc etc.


Microsoft blabbering on their Facebook page about AI resolving 97% of customer queries, and according to this article, 3 million customer service job losses in the next decade due to the rapidly increasing role played by AI and automation.

The Independent
 
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There's definitely going to be a case for something like UBI, but I doubt any government wants or can afford to go down that route.
Trouble ahead.
 
ANDREW GREEN said:
If you create a system with 50% unemployment, that would be very damaging to a society, nevermind an economy. An economy is reliant on consumers buying, if you make consumers pennyless, how does that work? Part of the joy of being a billionaire is to have power over people. If most people are dissasociated from society, how does that work? Would the unemployed 50% push for communism in a world that's hopeless for them? There's some very real problems for both the rich and poor. And there's reasons the very rich put in social support measures in England to try and stop the equivilent of a French revolution or Communist take over.
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As Andrew states, the crux is with seismic societal shifts the ramifications can/could lead to unforeseen outcomes.

2008 crash was horrendous, the next one is gonna be worse since private debt across the West is utterly out of control.

Prof. Mark Blythe (Brown UNI ) put it perfectly...
'The Hamptons are not a defensible position'

So it benefits the rich to ensure that a revolution of some type doesn't occur. If your mass population becomes wholly disenfranchised that leads to grass roots rebellions that can and do lead to revolution. It could be argued that we have started to see those rebellions politically and socially.
The uptick of Nationalism versus Globalisation is the big one.

Although, on hindsight having a major consumption based economy was in itself a huge mistake. We in the UK at least did not create a balanced enough economy and sold off our assets. We didn't create a sovereign wealth fund or invest in areas of industry for the future.
Our 90's boom was off the back off cheap Russian assets we stole for a song and the Spice Girls.

World bank published few years back about the 4th industrial revolution, we are in the midst of it.
The current AI bubble is just a repeat of the dot-com bubble, a lot of high end money laundering/theft by the higher ups. When it crashes as usual the rest of us down with their Government will pick up the tab.
 
p1RATE said:
I am with you. I don't see this as a traditional bubble at all, it is the start of a very large automation shift. In reality this is financially advantageous to say 90% of companies on earth so I don't agree that this is some ballooning phase that is going to burst.
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Financially advantageous until they very belatedly realise that there is then almost nobody left to buy their goods or services.

Still, short-term gains trumps everything especially in the West!

OP: so this thread is really the "Financial threat of the coming AI economy" then?
 
the economy is doomed.

soon gaming will be too expensive, consoles will be too expensive, anything that needs a computer to function will be expensive.
surely the AI demand is going to lead to huge inflation on a general level.
open AI apparently bought 40% of the ram production capacity

Imagine how much more expensive it will be to make a TV series, movie and video game now :O


also the data centres will have huge asset depreciation that will be unsustainable at the pace technology moves, they can't just write off billions a year.

it's like a circle of passing money around until someone breaks the chain and everyone falls on their face too.


AI is basically just a big virtual mall relying on advertising mostly, but the malls full of slop


AI takes jobs but doesnt take over paying taxes or spend in the economy.
ai is likely already leading to massive tax recessions, and higher taxes on real workers to make up for it
anything that relies on general taxation will suffer massive shortfalls year on year
 
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KompuKare said:
OP: so this thread is really the "Financial threat of the coming AI economy" then?
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My opening questions were:
aaronyuri said:
What are your thoughts on the current economic situation? What will things look like from here? The bubble can't continue indefinitely but what on earth is that going to look like when it does give up the ghost?
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The direction it has taken has been interesting, which is why I've lent into it. Then again, some have said AI will half wipe out the services workforce; others have said there is no bubble and AI could be the fourth industrial revolution; some have said to worry about Russian missiles instead. OcUK delivers either way. :D

arknor said:
the economy is doomed.

soon gaming will be too expensive, consoles will be too expensive, anything that needs a computer to function will be expensive.
surely the AI demand is going to lead to huge inflation on a general level.
open AI apparently bought 40% of the ram production capacity

Imagine how much more expensive it will be to make a TV series, movie and video game now :O


also the data centres will have huge asset depreciation that will be unsustainable at the pace technology moves, they can't just write off billions a year.

it's like a circle of passing money around until someone breaks the chain and everyone falls on their face too.


AI is basically just a big virtual mall relying on advertising mostly, but the malls full of slop


AI takes jobs but doesnt take over paying taxes or spend in the economy.
ai is likely already leading to massive tax recessions, and higher taxes on real workers to make up for it
anything that relies on general taxation will suffer massive shortfalls year on year
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This is the same story as machines replacing workers - the workers have to reinvent themselves and do something else. The issue is that, if AI delivers on what people want it to do, there simply won't be enough jobs to go around. That would be economic suicide, but just think how rich the shareholders would be during that process.

I have a few observations based on your points: if AI is the job destroyer but doesn't pay tax then it is simultaneously the greatest boost to capitalism ever created but also a weapon of mass economic destruction. If the money is shifted from one AI provider to another, with each scraping a profit, where/when does the money ever go back into the economy? A rhetorical question of course - it is unsustainable capital extraction. The modern economy cannot function this way, but perhaps a new, more dystopian and twisted economic model could replace it. Truly dark stuff.

Your DC investment point is one that tickles my brain. AI companies are stockpiling all of this silicon, consuming gigawatts of this power, receiving billions and billions of funding... For what? For most of OpenAI's 800 million users to be on the free subscription tier. There are also ethical questions that need to be asked which will obviously go unanswered because money/capitalism/growth being prioritised over such ethics.
 
aaronyuri said:
This is the same story as machines replacing workers
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in the past machines led to better jobs though and ended jobs humans simply hated doing.

AI doesn;t really seem to be creating anything for the average person to take part in job wise.

at least with automation people had to make and maintain the machines and get all the metals.
there's no cottage industry with AI, no cafes needed, no pubs, no infrastructure at all other than electric and water

with AI it's probably about 10 staff on duty in a massive warehouse and all the hardware behind AI is pretty much automated production without human involvement.

people didn;t want to be in the fields with a scythe etc when a machine could do the work and they could work in a factory instead.

automation pretty much just changed where people mostly worked, AI is basically ending jobs with no replacement.


look how much staff all the tech companies are laying off they will mostly be jobs that just stop existing, not the normal cull to reduce wages



the whole thing is going to be extremely parasitical anyway since it's all American companies, it's basically digital colonisation and extraction of wealth.
the truth is no one really needs it, it only really benefits america and in the first decade or two it;s probably just going to lead to lower living standards as there's less money in the economy


if you think about it automation from the industrial revolution needed massive infrastructure to transport goods than benefited almost everyone in society, how is it any way comparable to the AI revolution?

will still see those benefits now, old waggon ways turned into cycling paths, walking paths etc, all the roads the industrial revolution needed and all the trains still benefit us to this day as do all the bridges that would likely not be built other wise.
it created probably more jobs that it erased
 
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Industrial revolution > dotcom bubble > ai bubble. It is all relative, Remember NFT's?

The single purpose of AI is to make money. Same as every new technology, there is a benefactor.

Now if AI manages to lose 50% of the office workforce (and believe me, I work in data analytics, I can see my role disappearing very soon), those people will have less spending power. Where is the money going to come from?
 
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