watchu gonna do when the ai hype cycle collapses?

i asked an ai to deep research and tell me when the ai hype cycle will crumble. and it generated the following:

# The AI Boom vs Historical Bubbles

Many analysts warn today’s AI-driven market shows classic bubble features. For example, Reuters notes that today’s tech boom is “by some measures” more extreme than the [1990s] IT bubble. BusinessInsider charts confirm that the Magnificent 7 tech stocks now trade at higher forward P/E ratios than their dot-com counterparts did in 2000. On the other hand, key differences exist: current tech giants like Microsoft, Google, and Nvidia have strong revenues (e.g. Nvidia made $61B in 2024) and P/E ratios that, while high, remain well below dot-com peaks (e.g. 29.5× vs ~50× in 2000). In short, pundits caution that tech valuations are rich and reminiscent of 2000, but the bubble analogy is debated. Historical parallels warn of danger (as the dot-com crash wiped out 75% of Nasdaq’s value by 2002), yet major tech firms today may withstand a correction better than most 1999 startups. (author's note: regardless, a lot of common people's livelihoods will be brutally destroyed.)

## Estimated Timeline for a Crash

No precise “pop” date is known, but many experts peg the likely window to the mid-to-late 2020s. For instance:

• 2025–2026: Some analysts foresee early signs of strain. Sequoia’s David Cahn warns that AI startups must suddenly generate >$600 B/year to justify current spending. UBS strategists even assign a ~25% probability to a “bubble scenario” by end-2026. Wocstar VC Gayle Jennings‑O’Bryne predicts “some pressure” within 2 years (i.e. by 2026) as investors demand real profits.
• 2027: Tech forecaster Gene Munster sees about two to three more years of AI-fueled growth before a downturn. He specifically predicts the bubble will deflate around 2027, potentially dropping the Nasdaq ~30% as the “AI hype train runs out of steam”. (Morgan Stanley similarly notes that if promised AI-driven growth lags, a “meaningful, prolonged correction cannot be ruled out”.)
• 2028–2029: Others expect any full-blown bust to be a bit later. Jennings‑O’Bryne says a definitive “bust” may be 4–5 years out from 2024 (i.e. ~2028–2029) once unsustainable business models collapse. In summary, mid-late 2020s appears the consensus horizon – roughly a decade after the dot-com peak. (Keep in mind dot-com took ~7 years to peak and another ~8+ years to recover.)
• Post-crash: If a sharp downturn occurs, recovery could be very slow. One Reuters analyst cautions that a tech crash “today would take well over a decade to recover from”. In other words, even after the bubble pops, rebound in tech markets may be measured in years.

## What History Suggests (But NOT Advice)

Trying to “profit maximally” from a crash is extremely risky and unpredictable. The assistant cannot give specific investment tips, but we can note general patterns from past bubbles:

• Survivors vs. casualties: In the 2000 crash, many hyped startups failed while a few strong companies eventually thrived. For example, Amazon pivoted (into AWS/cloud and third-party retail) and did not report a profit until 2003. By contrast, weaker dot-com firms went bust. Analysts now predict a similar shakeout: “speculative AI companies would likely fail, while those with robust revenue streams (like Amazon, Google, Meta) would likely survive”. This suggests that after a correction, only businesses with real earnings endure, often in a leaner form.
• Hedging and safe assets: Historically, some investors in downturns have shifted into defensive assets (e.g. government bonds, gold, cash) or used hedging instruments (puts, short positions) to offset losses in tech stocks. However, these strategies carry their own risks and are far from guaranteed. Market timing is notoriously hard: if the “pop” comes late, early shorts can lose money and vice versa. Analysts note that even when a crash happens, the underlying technology usually remains valuable; in other words, “the AI bubble bursting wouldn’t kill AI”.
• Diversification and fundamentals: A conservative approach (not specific advice) is to maintain a diversified portfolio and focus on company fundamentals. For example, after 2000 value rotated back to established businesses, so investors concentrating on solid balance sheets fared better. The AI era likely favors firms with established revenue. Bloomberg columnist Jamie McGeever emphasizes that today’s tech giants have profits and diversified lines, unlike many dot-com startups. In practice, investors concerned about an AI bubble often look for misvalued sectors (e.g. consumer staples, healthcare, or cash equivalents) that tend to hold up during tech sell-offs.
• Uncertainty and professional advice: Importantly, nobody can predict exactly when or how a bubble will burst. Even top analysts give estimates (e.g. 2027) as educated guesses, not certainties. Any attempt to “time” the market is extremely speculative. The safest stance is caution: set stop-loss limits, avoid over-leverage, and be prepared for volatility. As Reuters warned, a correction “cannot be ruled out” if AI-driven earnings disappoint. It’s also wise to consult financial professionals before making big bets based on a presumed crash.

In summary, most forecasts suggest the AI stock bubble – if it is one – could start deflating by the mid-to-late 2020s. However, bubbles often last longer than expected, and timing them precisely is nearly impossible. Any strategy to profit from a downturn is inherently speculative. As in the dot-com era, history teaches that focusing on lasting value and managing risk is generally safer than chasing short-term gains.

ai generated content ends here.

what can we do to profit and/or protect ourselves from this?

idk. that's what we want to talk about! you in?

iceland jailed its bankers for their role in the 2008 crash. maybe time to jail some ceos!

update 3 aug 2025: lol, saw some posts about how investors are already beginning to call for ROI. oops. is it starting?

venue

Usually few or nobody comes to my events. So, please do not just register on meetup. If you are really, really coming, text me directly to tell me. Then we figure out a venue. I will come out if at least one person wants to do this. Probably Kallarbyn. The back room is quiet enough for our collective autisms even though the floor is weirdly uneven.

notes

i didn't do any research. just pulled this outta my ass (based on what i know of past crashes) and asked the glitch goblin to generate some shit up.

i might cancel or postpone this one because i have to go to brussels for some admin crap around the same time. idk yet. or we can do remote?