u/Dont_Pee_In_My_Butt

TLDR: whether or not we have a financial crisis is contingent on Open AI continuing to have an increase in its valuation. If it doesn't increase enough, or especially if it goes down, the bubble pops. There's more money on the line than there was in 2008.

In before someone comments say I'm not reading all that/sir this is Wendy's/ just mix paint.

This is going to be kind of a long one, but I'm going to try and keep it concise while still adequately explaining what I've learned.

First I want to explain what happened in 2008. The easiest explanation for what it was is a Ponzi scheme: using new debt to pay old debt. In the 2000s there was a massive housing price boom that peaked in 2006. There were two problems. The philosophy behind the types of mortgages being issued and the investment opportunity behind them being marketed as a money printer.

The types of mortgages being sold were known as 2/28s. That's a 30 year mortgage with two years of low interest mortgage payments followed by 28 years of substantially higher interest mortgage payments. The ruse was that since the prices of houses were rising meteorically, after two years the increased value of the house would pay off the entire existing mortgage. The bank would refinance the house, and the homeowner would get another two years of low mortgage payment. In hindsight it's easy to see how this is a trap. Eventually the newly appraised value of the house won't be high enough for the bank to justify issuing a new mortgage, and the homeowner is stuck paying 28 years of massive mortgage payments.

The other massive problem was that since the mortgages were rapidly being paid off with the newly issued mortgages, Wall Street saw this as an opportunity for investment. Mortgage backed securities were investments issued where the buyers lent money to Wall Street banks that paid the lender with interest when the homeowner's mortgage was paid. Money poured into this apparatus: pension funds, 401ks, index funds, insurance companies, hedge funds, and global investors all sunk humongous amount of money into mortgage backed securities. Once people inevitably defaulted on their mortgages, the securities became worthless and the entire system collapsed.

Now I want to talk about Open AI. They burn substantially more money than they make. The company is propped up through investments, not profit. It was valued at 1 billion in 2019, 80 billion in 2024 and 157 billion in late 2024. From 2025 to 2026 it's valuation increased from 300 billion to 852 billion where it stands today. Open AI sustains itself through issuing bonds and equity stakes and it justifies being able issue more and more bonds and collecting more investor money through it's every increasing valuation. Its last round of raising capital was somewhere in the realm of 122 billion. They only did 20 billion in revenue last year. It's easy to see how this is similar to home price and mortgages in the 2000s. But wait, it gets worse.

Open AI owes hyperscalers like Microsoft, Oracle (fuck Larry Ellison), Amazon and Google trillions of dollars in promised payments for using their compute. That's how Open AI trains it's models. It uses the hyperscalers' hardware infrastructure. They essentially just wrote an IOU and said, "we're good for it. Trust me bro." The hyperscalers use the IOU as verified income to justify taking on massive amounts of debt to buy GPUs from Nvidia and build data centers (Capital Expenditures aka CapEx).

The most important thing to watch out for is Open AI's next valuation. If it doesn't go up enough to justify issuing more bonds it's in trouble. If it goes down, it's definitely in big trouble. It has to be able to pull in more money than it did last time to keep this whole charade going.

The problem is that so many institutions are invested in the S&P 500 which is where the hyperscalers are traded on the stock market. It's the same deal as 2008. Pension funds, 401ks, index funds, insurance companies, hedge funds, and global investors all have humongous amounts of money invested in the S&P, and a sustainable amount of the stock they bought was bought with leverage. They borrowed money to buy stocks. When Open AI's valuation doesn't increase enough or goes down and the value of the hyperscaler's stock goes down enough, there will be a margin call and all of the sudden we're right back to where we were in the 2008 financial crisis.

There are several more financial mechanisms to take note of that will play into our next financial crisis. The South Korean stock market and RAM manufacturers like Samsung and SK Huynix, the Japanese interest rate and the price of Yen, and the US bond yield curve. If you really want to get anxious just know that the bond yeild right now is nearly the same that it was in 2007. All these are important factors that will interact and influence the outcome of the next financial crisis.

Another thing to take note of is the likelihood of Open AI's valuation going down from the adoption of free open source Chinese models like Kimi K3. US ai model's market share is tanking because of Kimi K3. Having a free, extremely competent model floating around will inevitably reduce the amount of money US companies can charge for their AI. This is a huge problem for US companies with no resolution in sight.

There's no way we all keep our jobs if this bubble bursts. There's just no way. I do anticipate that people will scramble to put their money into hard assets. I even think the Dow may rally a little bit, but overall the amount of money lost with absolutely tank the economy and Sherwin Williams will do the first thing it can to save money: cut labor costs.

What's funny, and I encourage you to do this, if you copy this and ask chat gpt to fact check it, it'll agree with everything I've said about the 2008 crisis. It'll even praise it for being insightful. However it'll argue and obfuscate the truth about what I've said about the AI bubble, not that I'm surprised. If I was Open AI I would certainly train my models to deny the truth about the financial hole I was in. That's just another reason not to trust AI.

Preparing mentally to park your car at corporate headquarters.

I'm pretty satisfied with this amulet for my Hammerdin.

When I had a hammer and sickle in this image originally, it was funny but inaccurate. I've made adjustments and I'm really vibing with it now.

I keep seeing Sherwin ads on Reddit, so I have to fix them.

I found a strong similarity between the housing crash/ mortgage backed securities crisis of 2008 and the AI bubble. If it pops I guarantee we won't all keep our jobs.

Warden, I want my own cell.

Bout to crack me a cold one, inclusively.

One Sherwin

Your true strength lies in your resolve to abstain from excessive fapping.

Juxtaposition: Heidi gets a 12% increase in compensation YoY, meanwhile we get our budgets adjusted mid year so they can avoid paying us a bonus.

We have the meats

Truth in advertising

You will own nothing.

We need to put up a sign

I blast so hard!

Let our powers combine!

Too bad there wasn't a "will Marathon see sub 10k concurrent on steam before June 30th?" on poly market. I'd be rich.

What a release.

Damn that's a lot of blasting!

Good will is a currency, and Sherwin Williams has been rapidly cashing it out with customers and employees.