With AI bubble burst imminent, where do you put your money?

It could have happened already, but hasn't for some reason. I guess the hype is still too strong. Didn't Sam Altman already come out and say GPT-5 is just going to be a more streamlined offering of the different types of services that already exist?

I like Claude Code. I think it's the best thing that's happened to software development in a long time, actually. Other similar tools are probably good too, I just haven't used them yet. But I'd hardly call that a transformational technology ushering in a new era of civilization.

It took decades for electricity to transform the way we live. Same with computers 100 years later. I suspect it will be the same for AI.

Hold on to tangible assets as they appreciate:

Land/real estate Gold/silver Art/Collector items/vehicles

Savings bonds and the like are also very safe places to put some money.

My backup plan --- don't backup at all.

Instead, short the stocks of overvalued AI players and ride them on the way down to something closer to reality.

I don't think OpenAI still has a lead in LLMs so a disappointing GPT-5 will at maximum burst openai's bubble.

I am both bearish on AI and don’t see the bubble popping soon. People are too invested. Some of the most powerful people in Silicon Valley have staked their reputations in it. What happens to Satya Nadella if the bubble bursts? The freaking president of the United States is all in as they say.

The market can stay irrational longer than you can stay solvent.

S&P 500 as always. Timing the market is a fool’s errand.

Crypto

AI hardware is not a bubble. We're not even close to getting capable AI hardware out to every man woman and child at scale. NVIDA was $90 earlier this year. Overthink at your own peril.

Even if AI pops, I do not think it is going away; the question is only how long it takes to recover. Additionally, robots are on the horizon. I am still very bullish on tech and honestly think it is foolish to be bearish on tech.

As long as NVDA's forward projections are bullish there is not going to be a pop.

Gold.

The skeptics were talking about an imminent AI bubble burst 10 years ago. You can definitely act on your hunch by simply shorting FAANG stocks, but you would be in big gain or huge loss territory. If you are looking to just hedge, maybe buy some traditional non-growth stocks that pay out dividends?

Basic big trackers. I understand very well why tracking a country/continent/the world market is a good idea, and that very understanding also tells me It would be as time consuming as a part time job to invest in specific companies.

There is no “AI” bubble as far as the public market besides Nvidia and TSLA which has always been a meme stock.

The values of none of the BigTech companies that are overweighted in the S and P 500 have seen their values rise because of AI. Their fundamental business value and revenues are mostly the same sources - ad revenue (Amazon, Google, Facebook), cloud hosting (Amazon, Microsoft and Google (?)), enterprise sales and services (Microsoft) and device sales and services (Apple).

The bubble bursting will affect VC and private equity and mostly private companies.

[delayed]

The AI bubble won't pop because too many CEOs have discovered that it's a convenient fig leaf for mass firings, which is then laundered into a broader narrative about "operational efficiency".

Unlike metrics like operational cash flow and net income, statements like "30% of our code is now written by AI" cannot be audited so leaders can't really be called on the veracity of such statements. As long as decreasing opex can be tangentially linked to "AI innovation", they're golden.

General investment advice is to put like 90% (or more) into ETFs, index funds or low-fee mutual funds. That last 5-10% could be individual stocks if you want to play around and do research, etc. If someone went all-in on AI companies and a stock market bubble bursts, you're in the "find out" phase.

Regarding bubble bursting, there have been market protections put in after 2008/09 so I don't know that we'll see major stock crashes. Its more likely that companies may miss targets, products start plateauing on features, etc.

If a crash were to happen, I read in a book (Intelligent Investor maybe?) there are usually macro indicators of patterns to look for, I forget what they are but its things like GDP, jobs, CPI, major indices falling X out of Y weeks in a row and other things like that. But that was all from a book looking in hindsight at prior crashes, prior to 2008 and whatever changes they've made since then.

I don't think AI is as big of a bubble as you think. The hype is very high, but non tech companies are starting to pay gobs of money in monthly subscriptions to get their employees to be a bit more productive.

If you can get a six figure worker to be 20% more productive for a grand a month, you're going to do that. That's a huge market!

Don't listen to the hype about AGI and world changing tech, think about the new market that might make every white collar worker 20% more productive.

How can I win games in matatu champion

I have seen some talks in the recent few months about AI bubble that is comparing to Dot com bubble. I thought this is very strange.

Dot Com was real hype. The usage of internet and PC with Internet as well as user's usage pattern simply wasn't there. AI usage is real and is building on Smartphone platform as well as PC. Even PC, Internet and Smartphone all three in their era didn't get as quickly adopted as AI. Considering Government or business is very slow to adopt to new technology, but CoPilot literally widely deployed from Government to Fortune 500.

I dont believe in AGI or ASI. But I also dont think we are currently in an AI bubble.