The entire US economy is currently being propped up by growth in the AI/tech sector. And I am convinced that LLMs are fundamentally incapable of delivering on the promises being made by the AI CEOs. That means there is a massive bubble that will eventually burst, probably taking the whole US economy with it.
Let’s say, for sake of argument, that I am a typical American. I work a job for a wage, but I’m mostly living paycheck to paycheck. I have maybe a little savings, and a retirement account with a little bit in it, but certainly not enough that I can retire anytime in the near future.
To what extent is it possible for someone like me, who doesn’t buy into the AI hype, to insulate themselves from the negative impact of the eventual collapse?
It makes me rage that even though I’m in a country thousands of miles away, its economy would be dragged down should economic collapse ever happens again in the US given heavy reliance on remittances from workers who are paid mostly in greenbacks.
The only glimmers of a chance of surviving such a catastrophe equivalent to tulip abuse would be not only investment in tangible goods and technical skills/trades – short of becoming a prepper – but also counting on policymakers’ pragmatism to make my country more cooperative with its neighbors to cushion and weather the shock.
invest into real world assets instead of stocks. think of the infrastructure you’ll need once everything stops working. food pantries, solar panels, ham radio, water purification, community self-defense, etc. basically solarpunk
This is all great stuff to have on hand, but not relevant for OP’s question. They’re wondering how to prepare for the equivalent of the dotcom burst or the 2008 recession, not a grid-down scenario.
why I mention prepping and mutual aid strategies is because you can’t pay for daily living expenses if there are no jobs and food becomes unaffordable. in 2008 millions of people became homeless so we need to learn from them how they survived
I don’t see the AI bubble burst affecting people to the same degree; I think it’ll wipe out a lot of investment portfolios, but non tech-sector jobs should be safe. I think it’s useful to have some essentials on hand, but I wouldn’t go on a buying spree if that means draining my savings; I’d rather have the flexibility of money. If it comes down to survival and you don’t have savings, you could preemptively apply for lines of credit, use those to cover living expenses, and declare bankruptcy once they’re wrung out. Not financial advice, but it’s an effective stopgap.
I would like to point out it’s only recent gdp growth being propped up by ai. It’s not like our entire economy relies on ai.
The seven primary companies that are trading around the same tens of billions of “investment” and “credits” are worth 34% of the S&P 500.
Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, Tesla.
All of them are betting HARD, because CEO types think they can be first to market with the singularity and win. (That may be oversimplifying a bit, but every one of these companies is run by Nazi collaborators. Make stupid calls, win shitty reputation.)
While true, those companies all have solid revenue streams that aren’t directly related to AI. If a bubble pops they’ll all suffer, but all of them were profitable before the AI boom and can survive without it. It’s very different from the dot bubble because that was driven by speculation and many companies weren’t making any profit back then.
I completely agree with most everything you said, but I will note that Apple is an outlier in that they are not investing deeply into ai. They are a shit company, and Tim Cook is most definitely a Nazi collaborator, but they are not a crutch of this current bullshit market.
That’s fair. They’re behind, but definitely playing. “Apple Intelligence” has been around for a year, just badly under-developed.
Apple plans to ‘significantly’ grow AI investments, Cook says | TechCrunch
“We see AI as one of the most profound technologies of our lifetime. We are embedding it across our devices and platforms and across the company. We are also significantly growing our investments,” CEO Tim Cook said on the Q3 2025 earnings call with investors.
It’s also funny how Lemmy is buying up this narrative.
The entire US economy is currently being propped up by growth in the AI/tech sector.
What’s happening is that Dementia Don is curb-stomping the US economy. AI investments, mainly in data centers, are the only thing that still seems promising. When you are on a trek and someone leads you through Death Valley, while pouring out all the water, you shouldn’t blame the last horse that still keeps going.
Putting the blame in the right place would certainly help, with a view toward the mid-terms.
Financially: Diversify. Make sure that you are not completely dependent on what happens in the US. But mind that Europe comes with its own imponderable risks (ie Putin). Same with China. Maybe some old leader dies and the new crew runs everything into the ground; they go to war with Taiwan, that sort of thing.
I don’t know that the OP or anyone else necessarily disagrees with you here. It’s one of the reasons that I believe we’re fucked when the bubble pops. Every other sector is shrinking otherwise, which is only making the mania more extreme.
Trump has fucked the economy, but I don’t expect the next administration to be able to pull off a miracle and fix the mess we’ve created within the next 10 years. Foreign relations and our status as the reserve currency are shot to hell. The US is going to have to answer for our behavior.
Those last two sentences are very alarming for anyone paying attention. The dollar bond market is currently collapsing, and we were THE defacto world power because of our soft power. Farmers around me are currently paying the price at China is buying up all the cheap land they can, and although I call them my friends,I can’t help but feel a certain schadenfreude as I told them trump was evil 8 years ago and the only comeback they have is “but other countries were scared of us then!”. Like their entire lives are nothing but a zero sum game, and now they can’t sell their soybeans. I may be a terrible person, but at least I can read the tea leaves.
Divest and buy labubu dolls.
There is a good reason why Warren Buffet is holding so much cash right now, he will be bargain shopping soon.
Still don’t get this take.
Buying low only works if you can sell high.
At the rate we are going. Yer gonna have King Ratfuck fighting King Shit over a an empire of dirt.
You don’t think halliburton made bank off of Iraq? I’m talking outside of the government contracts. A failing economy is good business if you’re flush.
This is how Berkshire has invested over the years. They try to time it, and buy the recession basically. When you’re investing long term, you can either hold and ignore or sell early, losing a bit and buy again after the drop
What did you do in 2020, when everything shut for COVID?
What did you do in 2008, when the arse fell out of the housing market?
What did you do in 2000, when the dotcom bubble popped?
Chances are the answer was “just shuffle on as normal, carry on living paycheck to paycheck, possibly get a new job if you work for somebody badly affected”. Odds are your pension pot will recover by the time you need it.
What do rich people do? They gamble. Watch The Big Short. You could try that, but chances are you’ll lose money. “The markets can remain irrational longer than you can remain solvent”, as the old saying goes.
“The markets can remain irrational longer than you can remain solvent”, as the old saying goes.
Some made big money in 2008.
A lot more lost it.
Buy low when everything crashes and wait for it to recover in 3-5 yrs.
I haven’t seen a job with a pension in the last 18 years being in the workforce.
Unions and Government jobs have pensions. But if you have a 401k or any type of IRA, the same people who invest pensions are also doing that investing for you if you aren’t managing it ( IE: mutual fund and etfs) and the investments are pretty much the same for both, so if pensions tank, so will your 401k.
I had a pension at my last job about 11 years ago. Then not long after I left with it fully vested congress passed a law allowing companies to creatively value pensions far lower than they should have been able to and most companies “bought out” the pensions for a fraction of their value. My pension got turned to mush, then a few month later congress passed a law “fixing the glitch” after most large corps had done their dirty work. My pension would have paid out about $800/month on retirement (likely not great depending on inflation), but their reassessment made it more like $150/month which probably won’t cover a phone bill when I am retired.
That’s wild
Yeah, it sucks. I was not relying on that pension as it was never going to be huge, but it was a big part of why I stayed at that company for over a decade.
Gov jobs still have them
Not necessarily. I had a relative who worked for the federal government back in the 70s/80s, and at the time they were trying to get everyone to switch (it was a voluntary choice for people who were in the ‘old’ system) to the new, non-pensioned options. I can’t imagine that the government suddenly decided to return to pensions.
My experience in small, local government was that everyone was on a matched % of paycheck being put into a retirement account. If you worked for a set number of years with the city/county/parish/state your investment would be matched at a specified rate when you retired. Basically just a glorified retelling of a 401(k).
Sort of. I’m a gov worker (non fed) and mine is a joke. 1% of salary per year of service. Not very significant. The old scheme was 2.5, I think, and before that it was 30 years to full salary. I still work with people on that old one, and they’re about at the full 30. In a generation it’s gone from a nice retirement to being more like a supplement. We do pay into SS now though so I guess that’s meant to replace it.
Been to 3 jobs that offer pensions and they all tell the same story you’re giving.
It’s right in the handbook. Hired before X date and you get 25 years to full salary retirement. Before Y date and 30. Hired after 2008 and it’s all the same. 33 Years gets you 33% of your salary. Which ain’t gonna be worth much thanks to inflation.
I worked next to people who at 60 had a full pension coming in, and then collected a full second salary because they’re allowed to DROP - which means work and collect the pension. One mfer was working on retiring twice to collect 3 paychecks. That is no longer an option for my generation either.
alot of people are also working after retiring otherwise. pension aint enough anyways,.
Do you not have a pension saving scheme that gives a tax break when employers pay into it direct from your wages?
In the UK it’s pretty standard. I think it’s even a legal requirement for employers to offer it, even if the amount they put in is paltry.
In the US those’ve been almost universally replaced by 401k plans, which I assume is what they’re referring to.
I’m in the US, so nothing guaranteed. I have a 401 and a bunch of other pots around.
Buy other stocks, not American ones. They will also be affected but not as much.
If you are living paycheck to paycheck, you cant do anything.
Don’t have money invested in the stock market to prevent it from losing value during downturns
If you are already invested, you can be reasonably separated from the stocks that are inflating, when the bubble bursts, as long as you are diversified the overall dip will serve you.
The directly impacted industries, those AI companies, data centers, blackrock real estate which is currently heavily investing in local power generation, hardware. That kind of stuff will impact the market, but your money is in relation to units owned. That value will come back and you as a long term investor will make a multiplier on any money you lost, because you ownership, your shares continued to go up at the reduced cost.
If you need the money you have invested for living expenses, you are fucked, but long term investors come out of these recessions stronger every time.
That’s managed investment, retail investors who are highly leveraged in the affected industries will be fucked.
Also look at gold, precious metals are a ridiculously solid investment, just don’t buy them at the market highs put of panic.
The stocks that are inflating are a significant portion of the stock market.
When they crash everything will.
When that happens the only way to not lose is to not have money invested.
Right, they lose value, but you still retain ownership. As a part of the regular flow of things the money you make from those stocks gets reinvested into more ownership, something that keeps happening even when the value of those stocks fall.
As long as your ownership stays, the market will rebound and you will make a premium because the number of stocks you owned actually went up during the period of value loss.
When people talk about how much money rich people made during covid, they are largely talking about stock value, not just carpet bagging.
I’m sorry but I can only describe this mentality as cope.
The market rebounding requires diversified investors propping it up, which no longer exist.
If AI goes kaput the stock market is getting set back at least half a decade, it will rebound, over the course of a decade or so.
That’s not good for people who need a retirement, like the vast majority of people invested in the stock market
See 2008. Now, multiply it by 7. Jacked to the tits.
Yeah, no the market has plenty of diversification, there have been times in history where our investments as a country have been much less diverse. When the AI bubble pops, and it will, it’s gonna be just like all the other bubble pops we’ve experienced. People who didn’t sell made back those funds after every crash. The people who needed the money right then, the elderly especially, we’re totally fucked. They couldn’t wait out the dips.
I’ll grant you it’s possible this is end of the American expirement because of mixing this with Trump, but i would have to ignore every other historical example. In which case the money won’t matter at all because there will be no guaranter of American fiat currency, which means you’ll see Argentina levels of inflation, we aren’t even close to that yet.
No it’ll pop, the rich who are heavily invested will make a ton of money when investors move their funds to another bubble, we’re also in a real estate bubble! And the whole machine will keep moving.
If you’re planning for a catastrophic failure you should really be buying that gold tho, precious metals, bullets, guns, fresh water, seeds.
And I am convinced that LLMs are fundamentally incapable of delivering on the promises being made by the AI CEOs.
As a, uh, atypical American, and someone into the ML scene and previously employed in an LLM dev job… I agree.
I don’t think ML is going away, as what’s been made so far are niche tools in the same way a hammer is, but the level of hype and conning is literally criminal.
If you can shift stocks around, take them out of indexes and put the cash in crash-resilient stocks like Berkshire Hathaway (which somewhat famously/infamously saves cash to buy dips during crashes), or Walmart. I’m thinking on such a “Noah’s Ark” basket for myself.
I’m not knowledgeable enough to comment on bonds, gold, or whatever else your savings may be in. But don’t believe a word anyone says to you about crypto.
Start saving a bit extra too, if possible, as the crash may not come for some time. And you want to avoid selling invested savings when the markets at its lowest.
On the tech side, you can get more into self hosting to not be so dependent on Big Tech. You’re on the perfect site to learn that.
If you ask me, that even includes dabbling in open-weights ML stuff, as that might suddenly become a more marketable skill once all the OpenAI hype implodes, and companies sipping the Koolaid turn more practical/frugal.
Other than that… I dunno. Depends on your work and lifestyle, I suppose. I think this will be a bumpy ride no matter what we do.
As a security engineer, I implore anyone to have an LLM walk you through standing up an SIEM.
Like don’t get me wrong. They’re phenomenal. But they just aren’t capable of complex tasks yet.
The current architectures fundamentally aren’t capable of such complexity, no matter how big they get or what prompt wrappers they have.
There are some interesting, deeper innovations in papers, but the AI hyperscalers seem to have little awareness of them, and I’ve seen so many cool experiments just drift by with no further testing these past few years. Which, again, suggests whatever approach the purse holders are taking is not a “innovate our way to better complexity” one.
I am not an expert per-say on AI, but I have survived economic collapses. Kinda.
Here’s what you can expect.
It will happen a lot faster and more sudden than you expect. It will be a few days of “uncertainty” and you will see reports on the market and spending and fear through investors, and then BAM everything goes deep red for a few days and then you suddenly get sent home from work.
Your job, no matter how skilled or stable or unrelated to finance or the stock market you may think it is- is NOT safe. In fact, service industry jobs are often the first to go, because when the market tanks and investors start pulling out money, one of the first, strongest effects we feel is that people with money immediately stop spending. If you install windows and doors, if you cut grass, if you clean or cook, expect people will suddenly start doing that themselves more and more. You may get laid off suddenly depending on how much reserve your company has.
There will be an immediate and overwhelming strain on state and city services. Unemployment offices, food banks, employment centers, and expect the media to create a LOT of hype around it to a destructive degree, there will be the same kinds of supermarket raiding like we saw with covid for no real good reason other than people feeling afraid.
What you should do now to prepare:
Have backup income plans. Even if modest, have some hustles ready to deploy. Get certified or see what you need to get certified ahead of time to do Uber and/or Lyft, people are going to be using ride sharing more because they won’t be able to afford to drive or make car payments. Think about other services people are going to need if they don’t have jobs - handyman work on the cheap, dog and pet care, unlicensed work you know you can do safely, etc. If you or your family can do art and crafts, set up an etsy market now before you’re strained, open it up to international customers.
SAVE MONEY, have cash savings as well as bank savings, have gold too if you can swing it. Expect any accounts that are tied to investments to be frozen or even wiped out, such as 401k’s and the like.
Whatever you can do to reduce debts and spending - pay down or pay off credit cards or cars if you can. Get your finances in order as much as you can, so figure out exactly what you’re spending and what your margins are.
Stockpile canned goods and basic survival supplies ahead of time like it’s the goddamn apocalypse. Seriously, have at least a month of dry goods and preserved food, you have some time (maybe) so start collecting canned food, sacks of dried beans and rice, toilet paper and soap, other supplies you buy regularly. This will give you a safety net if it gets bad, it’s one less [major] thing to worry about as you shift around your expenses and priorities.
Get information ahead of time about where your local DES/unemployment offices are, and what’s required to apply. Find out ALL the programs you can apply for, from, nutrition assistance to grants to stipends or tax credits for whatever your family situation is. You won’t get through on the website, it will be crashed with traffic, so be ready to go stand in line with your paperwork. You will get some number of months of benefits if you qualify (requirements vary by state) and most likely after some political contention, congress will pass emergency funding for extensions and stimulus checks. But it won’t last forever.
Go visit your nearest food bank now. Bring them some food and socks, get to know who runs things so that when it’s your time to stand in line, they know you already and have good associations.
We don’t really know how bad it could get. So get a gun. There may be civil unrest at some point. Our world is about two missed meals away from anarchy, or at the very least crime will increase and homes will get broken into, and police will likely be understaffed and overworked. You will be on your own.
If you’re worried about any economic downturn, you can very well diversify into even larger economic areas if you’d so please. How you do so is of course up to your own discression, given you can look towards different sectors, vectors of investment, and even geographic areas.
Not a useful answer, but a reinforcement of the problem.
Without data centers, GDP growth was 0.1% in the first half of 2025, Harvard economist says
That’s pretty horrific.
It’s also not completely fair, some of that money would have been spent elsewhere without datacenters. Investors still gonna invest.
But what if the net ROI on those data centers is massively below the working average cost of capital… what is stated above is still massively destructive to capital and economic activity
Oh yeah it’s definitely bad in the long run. I’m just saying that it isn’t fair to say that the economy wouldn’t be growing without these new datacenters.
Follow the classic financial advice of setting aside enough emergency savings for a period of unemployment and diversifying the asset classes in your investment accounts (eg, retirement, health, education savings) to align with your risk tolerance & goals.
I keep 6 months of emergency savings in a high-yield savings account & let a robo-adviser passively invest my other savings on autopilot. While that means losses with market downturns, all the advice I’ve read & studies they refer to that run simulations over historic data (including shocks, downturns, bubbles) say that impassively holding that strategy has historically come out gaining & beating inflation.
Non-US countries are buying gold, this seems to be a good way to go.
I do wonder…
With most economic crashes, the rich get even richer. This time it’s different, though.
Right now, the top 8 richest men in the world have as much wealth as the bottom 50%. Homelessness world wide is at an all time high, and a huge swath of people can’t afford all the basic necessities anymore.
If an economic crash happens now, will the 99% of the people finally wake up and just TAKE the resources from that 1%, like it or not?
What do billionaires think will happen to them once shit really hits the fan?
they will think it will be safe to flee to thier bunkers or compounds, in other countries, but they dont have the forethought of having staff they need to pay , or even services like waste removal down.
This time it’s different, though.
Why?
Homelessness world wide is at an all time high, and a huge swath of people can’t afford all the basic necessities anymore.
I highly doubt your homelessness stat. If it is at an all time high by any metric, it is almost certainly a statistical artifact from (1) increased homelessness in developed nations, where tracking is decent and (2) improved tracking in developing nations. Meanwhile the people who can’t afford “basic necessities” are, again, in developed nations - places where the notion of what constitutes basic necessities would be considered grand opulance in many parts of developing nations.
Instead, the majority of people in the world have seen improvements to their quality of life over the past 20, 40, and 60 years. Improved water and sanitation systems, more robust and resiliant food systems, greater access to life saving medical care, huge drops in infant mortality, hugely increased access to technology and education.
If an economic crash happens now, will the 99% of the people finally wake up and just TAKE the resources from that 1%, like it or not?
This is, quite frankly, a ridiculous fantasy. The wealth of the top 1% primarily exists not in vaults of gold bars, but in the ownership of what are intangible human constructs. Particular segments of land (lines on a map); businesses (organized structures of people); intellectual property (literally just ideas).
Elon Musk, for example, has a large portion of his wealth in Tesla. Of course, Tesla has physical assets in its factories and such. But most of the value of the company is speculative - people expecting Tesla to be wildly successful in the future. The next part of its value comes from IP - the exclusive ownership of its various inventions and innovations. And another part comes from the organizational structure itself and the knowledge and intelligence of the individuals who make up that structure. At its root, the value of Tesla is the goose that lays the golden eggs (Musk’s cult of personality and the expertise of the individuals that make up the business) and investor confidence that the goose will continue laying golden eggs. In your glorious revolution, presumably Musk will be beheaded, and all the Tesla employees will scatter to the far winds as the proletariat storms their offices. Without the stable interaction of these technical experts, no more innovation happens, and investor confidence dries up (assuming the investors weren’t also beheaded). The wealth of Tesla, then, does not go to the people, but goes up in smoke.
A revolution premised purely on taking assets from the rich has a predictable ending: in the slim chance that the revolution succeeds, even if the tangible wealth is equally distributed to the people (also a slim chance), the engine that generated that wealth has been destroyed and, deprived of the ability to generate new wealth, the people eventually spend away their windfall and are left with less than they had before they started. This sort of phenomenon was literally the impetus for Adam Smith to write The Wealth of Nations. Spain had spent a couple centuries robbing the Americas of its gold via murder and slavery - enough to literally collapse the price of gold in Europe. And yet, during Smith’s time, Spain was in dire financial straights while England was the world’s predominant economic power. Why? Because England had invested in technology and had developed industrial factories. It had invested in public and private institutions (ie, structures of people) that would continuously generate new wealth, rather than relying on hoarding gold bars.
The “glorious revolution” fantasy, meanwhile, is largely counterproductive to the actual goal of improving normal people’s lives and improving the equality of political and economic power, because it plays into the childish notion that if we just throw a big enough temper tantrum, then we will get our way. And maybe that might be true for a brief moment. It is certainly true for some children some of the time that if they yell and scream and cry enough, they will be given the ice cream they want. But they only get that ice cream because there is an adult there, listening to them cry, who has a job that makes money that they can then use to buy the ice cream. The problem is that, ice cream or not, at the end of the day the child is still a child, completely dependent on the adult to provide for all their needs and make all their important descisions. The child gains real autonomy in their lives not when they throw “The Glorious Temper Tantrum” - they gain it when they get a job outside the purview of their caregivers and are able to spend the money they make at that job on the things of their own choosing.
So, too, with average people growing out of the controlling influence of the political and economic elite. Independence is achieved via building things - communities, relationships, physical infrastructure, businesses, governments, unions - which can be relied on instead of the options presented to us by the elites. And building things takes time and effort. It doesn’t happen overnight with a few molotovs and a good photo op - that’s the narrative the elites want you to believe, the one they put in all the popular movies and tv shows, because it is the strategy that is absolutely sure to fail. The idea that The Great Battle will be followed by Happily Ever After serves the elites because it tells us that we will win when we just put in a reasonable amount of effort right at the very last moment, and then we can relax. This is not how the world works. No - the world gets better when people put in unreasonable amounts of effort right now to gradually improve things and build things bit by bit, and keep putting in that effort for years and years and years. Sure, maybe there will someday be a tipping point or a big marker in history that we can point to and say “ah, that’s when things changed”. But make no mistake - that moment can only happen, and will only lead to a better world after the fact, because of the long term, boring hard work of people who care more about building things to help their friends than destroying things to hurt their enemies.
They will always be safe in the US. Americans truly are not capable of revolution.
What do you think would happen to billionaires in that scenario? The richest people in the world, who all own their own islands and mega yachts and can easily pay anyone enough money to do whatever they want?
No one is “taking” what they want from them lol.
This time it’s different, though
How? How is this fantasised about economic crash different?
When you have 10000 people to 1, a lot can be accomplished with some organization. You don’t have to get to them on their islands if you take back the mainland. Cut them off. Eventually they’ll run out of supplies, and since they’re used to getting whatever they want whenever they want, they’ll run out of something they’re accustomed to getting within days.
You act like billionaires are some smooth brained Neanderthals who will lose their mind in a few days if they can’t get their favourite smoothy lol
Wen you’re accustomed to privilege equality feels like oppression. And that’s just for us regular folk. These people live a life of luxury we’ll never understand, and they never get told ‘no’. So yeah, as dumb as it sounds, when you’ve lived a life getting everything you ever want finding out you can’t have that smoothie can have an effect.
I’m not saying that first smoothie would be the trigger point, but the idea is lack of access. Cut off the new sewage drainage from billionaire island. Cut off deliveries of any kind. They’re used to lobster and caviar at the snap of a finger. Kraft Dinner will be unacceptable. Lock them in their utopias and see how long they last.
How long until their smart homes break down and they can’t bring in IT to fix it? These things can absolutely have an effect.
You’ve got absolutely no idea how the real world works lol. This reads like some fanfic erotica for people who hate billionaires.
In a world like you’re talking about everyone would be out for themselves, not just billionaires, and at that point billionaires will have even more power because they could pay people to shoot-on-sight anyone that comes near their property, and they could just seize the means of production of whatever they wanted to. They can afford to buy whoever they need to, to get whatever they need to.
This entire conversation is based on what the op asked. Would the 99% take what the 1% has. You suggested they couldn’t take it, I suggested they wouldn’t have to they could just cut them off. The entire premise is based on the 99% standing up and uniting. It was an interesting question dude, no need to be insulting.
And I’m saying they couldn’t just cut them off lol.
They all have been building bunkers.
they would have to staff them, and pay them, i doubt they thought that through. thats probably why alot of them are into trafficking.
