Ask HN: With AI bubble burst imminent, where do you put your money? | Hacker News Reader

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

11 pointsmunchausen4234 comments

Many people on HN seem quite skeptical of the current AI hype—some even believe the bubble could burst soon. For example, a disappointing GPT-5 release in August might already trigger such a shift. If that happens, it could also impact the stock prices of major tech companies heavily invested in AI.

So, what's your backup plan? Are you diversifying your investments to protect your assets, or are you pulling your money out entirely and going full "under the mattress" mode?

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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.

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.

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&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), retail sells (Amazon), 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.

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.

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

I cannot agree more. Since I understand (more or less) how trackers and ETF works, I have a hard time believing economist and economy specialist arguing that you can model human behavior around rationality in an economic system...

Truly. But I would like to see GOOG vibe code back into usefulness some of the projects it killed.

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.

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?

I'd be very interested in seeing an example of someone in 2015 claiming an AI bust was imminent.

Were you just not paying attention back then? The AI naysayers have been at it since at least 2012 or so when DNNs became a thing. It is 2025 now, and it isn't much different, probably the same people from 13 years ago who were saying the AI bubble was about to burst (except now, for real this time).

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.

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.

People have short memories. Their reputations will be fine.

Depends how much of other people's money they lose.

A likely catalyst would be a DeepSeek like model where it has the capability of top model but in a much smaller footprint.

NVDA and cloud providers that are highly staked in AI would likely take a hit if a 70B model could do what Sonnet4 does.

But overall, AI is here to stay even if the market crashes, so it’s not really a AI bubble pop, more like a GPU pop.

And even then, GPU will still be in demand since the training will still need large clusters.

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.

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.

Completely agree. It's definitely a bubble, but it's like the Dotcom or housing bubble. Just because it bursts doesn't mean it's going away, just means it was overmarketed and PR'd. Companies spent billions on foundational models and the hype was necessary for their B2B sales, although they haven't met that yet probably so the hype will continue for some time and Money will be spent for some time too for sure. Although I do think it will take much longer for adoption of AI robots. Main device will be phones and better phones and things attached or pairable with phones for the next decade atleast. IoT will also get a revamp for sure

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.

I'd probably look at things like consumer defensive stocks, materials, and especially suppliers for chip foundries (who supplies the chems and silicon?).

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.

“As they appreciate” AKA “as the dollar depreciates bc the dollar machine keeps going brrrr”

No. The things I have listed have increased in value during the last 25 years. They appreciate independently of the value of the US dollar (even the bonds).

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

How can I win games in matatu champion

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.

Which ones?

I think this is probably safer than pulling out of index funds, as you can afford to hold these shorts long-term. I wasn't aware of any obvious AI frauds that IPOed, but didn't really research it.

How about all of them at once?

Just short the NASDAQ 100.

See "SQQQ.

Mmm... That's extremely risky, even more so than pulling out. I was thinking more short a few select frauds.

The real, extreme frauds aren't traded on the major public exchanges. They are mostly into venture capital and private investment.

But any AI meltdown will hurt the major public companies too. NVDA being probably the largest with the most to lose.

See "NVDQ".

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

Gold.

Crypto

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