I don’t think people know what the definition of this bubble is yet. I can provide one:
- AI-first app companies that actually go public on the stock exchange
- Massive influx of investment from retail as the basket of “AI” is just too much to pass up
- This basket is no longer a collection of top tier hardware and software titans, but led by resellers and wrappers like Palantir, like something like Cursor, like Windsurf, and finally rounded out with crud-apps turned publicly traded companies. Figma going public is a very bad indicator of what’s to come. Perplexity going public would be one of my biggest Red Flag moments.
- The basket I’m describing is the package that includes all these “toxic” assets.
- Some really dumb big players will lose here too because they will acquire some of these resellers and wrappers at prices they’ll never recoup (Newscorp buying MySpace).
- And finally, those who know, know, and they will bail first unscathed. Say it ain’t so, the story of our lives.
That will be the vehicle retail will pile into. We’re a little bit aways from that as companies are still building out their AI offerings. We’ll need a flurry of companies like that to go public soon after OpenAI does, sparking the beginning of one of the worst bubbles ever. You won’t be able to make sense of it because the bull market will make it impossible to not FOMO in.
That’s the systemic risk to this entire industry and the broader economy in about a few years.
Remember, humans can’t have nice things. If the secondary companies didn’t rush to the stock market as their prime imperative, we wouldn’t have to worry about it because all sensible investment will be in the large caps. The pursuit of gaudy returns will fail humans again, as always.
Stay safe and right-sized, all. The actual tech is not over-hyped.
So, one difference between this and the dot-com bubble is that it is much, much harder to go public now, and much, much easier to raise funds as a private company. This has lead to loss-making private companies with valuations that would not have been remotely plausible a couple of decades ago. Arguably a more likely end to all of this is that the VCs turn off the tap, which will kill most companies in the space within a year or so, with fairly limited contagion to the broader markets; public companies who've gone heavily into it may be badly burned, but that would be about it.
Retail may never really get to participate at all, beyond trading Nvidia and similar.
- AI-first app companies that actually go public on the stock exchange
- Massive influx of investment from retail as the basket of “AI” is just too much to pass up
- This basket is no longer a collection of top tier hardware and software titans, but led by resellers and wrappers like Palantir, like something like Cursor, like Windsurf, and finally rounded out with crud-apps turned publicly traded companies. Figma going public is a very bad indicator of what’s to come. Perplexity going public would be one of my biggest Red Flag moments.
- The basket I’m describing is the package that includes all these “toxic” assets.
- Some really dumb big players will lose here too because they will acquire some of these resellers and wrappers at prices they’ll never recoup (Newscorp buying MySpace).
- And finally, those who know, know, and they will bail first unscathed. Say it ain’t so, the story of our lives.
That will be the vehicle retail will pile into. We’re a little bit aways from that as companies are still building out their AI offerings. We’ll need a flurry of companies like that to go public soon after OpenAI does, sparking the beginning of one of the worst bubbles ever. You won’t be able to make sense of it because the bull market will make it impossible to not FOMO in.
That’s the systemic risk to this entire industry and the broader economy in about a few years.
Remember, humans can’t have nice things. If the secondary companies didn’t rush to the stock market as their prime imperative, we wouldn’t have to worry about it because all sensible investment will be in the large caps. The pursuit of gaudy returns will fail humans again, as always.
Stay safe and right-sized, all. The actual tech is not over-hyped.