Paradoxically I’m increasingly believing in two things at the same time:

• Not a bubble. Not overhyped. We’re still near the beginning of the growth and what will be possible.
• Nvidia could crash and bring down much of the stock market with it. We’re all going to be hit hard if this happens.

@manton both are indeed true - WITH the significant exception that this is certainly overhyped and a bubble. importantly: so much is leaning on this bubble, that it's even more "too big to fail" than those responsible for the financial crisis from 2008 - so we the taxpayer will be called to bail out, again. better we learn from our mistakes, and hold people accountable

@manton I fully agree. I also think there is a likelihood that Nvidia will be declared "too big to fail" by the administration, which would make it a lot worse for all of us.

@manton What is the mechanism for (2) to happen if (1) is true? NVIDIA is primarily levered to the large-cap hyperscalers, and if (1) is true then they will be fine and may even capture some of the rents from NVIDIA. NVIDIA is only 8% of the S&P 500. Unless you’re saying the AI capex boom is a bubble.

@kylehugh.es I don’t know. Just a feeling that too much is pinned to Nvidia’s continued success. I think the capex is largely justified, though.

@manton I agree on the capex as well. It is a funny feeling, but ultimately the numbers say we can publicly survive an NVIDIA collapse. Many private AI companies would go kaput, though.