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The air begins to leak out of the overinflated AI bubble (www.latimes.com)

submitted 2 months ago by grid11@lemy.nl to c/technology@lemmy.world

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[–] sugar_in_your_tea@sh.itjust.works 0 points 2 months ago (1 children)

"Bubbles" are typically defined by stock/commodities prices. The 2000 dotcom bubble was defined by investor losses, the 2008 housing bubble was defined by housing price drops, etc. So an AI "bubble" will be quantified by stock prices of AI-related companies, like Nvidia.

I think the stock price will be at least partially supported by spending by the big tech companies trying to keep AI relevant. So I expect less of a "pop" and more of a gradual deflation.

[–] helenslunch@feddit.nl 0 points 2 months ago (1 children)

Incorrect. It's defined by profits and losses, which the losses typically precede drop in stock values.

[–] sugar_in_your_tea@sh.itjust.works 2 points 2 months ago

I think the opposite is true. Stock values factor in expected future earnings, so if the market seems to be shifting, the stock price will generally drop before the disappointing earnings report comes in.