r/AIBubble

Anthropic co-founder Jack Clark said the company is not hiring junior engineers anymore because AI now handles their work. He warned that when other industries follow, it can trigger an economic shock.

Reason:-

Clark said Anthropic is now hiring more senior people because "returns on intuition" have gone up. Earlier, experienced researchers needed big teams of junior engineers to run experiments. Now Claude does that work. So companies want senior judgment, and entry-level hiring is getting skipped.

The data already shows this. Unemployment among fresh college graduates has climbed to 5.7%, compared to 3.6% before the pandemic. One study found that jobs for software developers aged 22 to 25 fell nearly 20% from their 2022 peak, while developers aged 30+ actually grew 6 to 12%.

Big Shift:-

AI is creating a strange split in the economy. It multiplies the output of top experts but automates entry-level work at the same time. Clark warns this can produce something we have never seen: very high GDP growth and recession-level unemployment together. Anthropic itself has pledged $350 million for workers displaced by AI, which shows even the company building this technology is preparing for the damage.

Analysis:-

Three things stand out here.

(1)First, the entry-level ladder is breaking. If juniors never get hired, they never become seniors. (Trade-off: companies save money today, but the industry loses its future senior talent pipeline.)

(2)Second, experience just became the most valuable skill. AI can do the basic tasks, but it cannot replace judgment built over years. (Trade-off: seniors become more powerful, freshers get locked out of the same path that made those seniors.)

(3)Third, the warning is coming from inside the house. The company building the AI is the one predicting the shock and putting money aside for it. (Trade-off: honest warning builds trust, but it also normalizes the damage before it fully arrives.)

What do you think?🤔

If AI takes all the junior jobs, where will the next generation of seniors come from? And should AI companies pay for the jobs their technology removes?

This is nothing new for this sub, but what is surprising is that Forbes would publish this. It suggests the narrative is very much changing. In fact, I would actually say they frame it quite badly for AI.

> But the MIT study found that AI automation is economically viable in only about 23 percent of roles. For the remaining 77 percent, humans remain cheaper. Goldman Sachs' chief economist has stated plainly that he does not view AI investment as strongly growth-positive. Sequoia Capital partner David Cahn has put a number on the resulting gap: AI companies need roughly $600 billion in annual revenue to justify current infrastructure spending. The gap, as of mid-2026, is widening, not closing.

> So the present moment looks like this: companies cutting human labour to fund artificial intelligence that currently costs more than the labour it replaces, in pursuit of productivity gains that most studies cannot yet verify, at a pace that is exhausting annual budgets in weeks.

Many say Ai is in a big bubble, but I feel government is protecting this bubble from being poked. How long can it go like this?

I built a few oss jobs that collect data from the web and quarterly reports from the hyperscalers about AI-related CapEx. This data then populates a static website, and an indicator is calculated showing the probability of the AI hype cooling down.

I host it for free on the GitHub page of the repo: https://laurentiugabriel.github.io/is-ai-hype-cooling-down/.

Meta spent $145B building datacenters to train a model nobody uses, ran out of things to run on them, and figured he'd rent the leftovers out like a Storage Wars unit.

Somehow the takeaway isn't "lol Muse Spark flopped," it's "sell every chip stock on earth." SOX down 6, CRWV and NBIS getting bodied, my SOXL doing numbers I won't be discussing.

Every other lab is paying over a billion a month for compute they can't even get. Zuck's got so much extra it's a garage sale. That's not a demand problem. That's a him problem.

I cannot find a single company in the S&P500 that is up significantly due to efficiency and productivity gains from actually using AI. It's been two years now and there isn't a single one? How long is it going to take?

Our entire economy is hanging on AI right now, and if it fails we‘re all screwed royally. We aren’t making any new money off of AI. It’s almost like this has happened before… nah it couldn’t be possible for a bubble with a shit ton of money going into for more money later on couldn’t POSSIBLY fail right? Right?

(I’m referring to the dot com bubble where everyone lost a bunch of money, and internet only started being financially valuable after BILLIONS were lost.)

US GDP growth in 2026, estimated at ~2%, is projected to be surpassed by hyperscaler capex spending (~700 billion).

What is this money being used for? At first, they said it was to compete for the top spot. Just exactly what privileges that “top spot” comes with has never been made clear, nor what exactly that looks like, but vague notions of technical revolution and the supposed eventual freedom to fire accountants and lawyers has carried the vibe of significance sufficiently as far as the market is concerned.

So besides representing a race to the bottom of the corporate cash pile, what other consequences are there for this spend? The answer is: competition not just with one another, but with you.

Competition for memory, hardware. Competition, now, for more of your capital through public stock offerings and record debt issuance. Competition for water and electricity. AI capex spending has not only been dominating economic growth, it has been a central driver of inflation.

Enter the federal reserve. What could be their response to this kind of inflation? If they raise rates modestly, it has the intended impact of reducing the velocity of money .. except for the fact that these hyperscalers are perhaps the least interest rate sensitive entities in the picture. For every pound of distress higher rates cause economically, maybe an ounce is absorbed by Google. And the “intended effect” is deflationary for everything .. except the very objects of capex spending: your utility bill, your new phone purchase, anything involving memory or chips. Food can be affected.

This techbology is nascent, speculative, and reliably has no top line contribution to the economy. There is no serious suggestion otherwise. At best, and optimistically at that, the upside for the value proposition of AI is our income.

And I say optimistically because I use AI. I use it as somewhat of an enhanced google search. A majority of its responses contain either completely fabricated or incomplete information. Most of the time it gives me responses retrofit to my biases - and why wouldn’t it? That’s a model that works with any other social media. It figures that it works just as well for anti-social media. But besides general purposes as a sophisticated search engine and calculator that understands English, it offers no real utility.

What does it do really well? Well for one, it’s certainly quite validating. So it’s quite understandable for someone with a narcissistic bent to feel like some”one” finally *gets* what they have to say.

This is the technology we’re talking about. Unreliable utility, probably incapable of handling essential tasks unsupervised for decades (if at all), that socially has the net effect that we saw from social feed manipulation but on steroids.

Anyone who has spent any length of time trying to coach an AI to remember rules to be a proper brainstorm or workshopping partner will have no disagreements on these points.

This is the technology that has captivated the egos of the companies that represent half of the US stock market. The effect is that they now compete with you on your regular purchases for a technology that produces no value commensurate with its expense - depending on how greatly you value personal access to a digitized pseudo schizo with no accountability and an emphatic and flattering vocabulary.

Meanwhile, semiconductors and memory are attracting all of the capital in the market place. Technologies that have grown exponentially to accomodate the resource intensive models currently being produced by American companies - while China develops models that are more efficient by a couple orders of magnitude. Slight differences in accuracy aren’t really an argument for a serious person to make here, as the deficit between frequently wrong and sometimes right is a rounding error to begin with. But it represents a path to innovation in this technology that is emblematic of what allowed these hyperscalers to accrue such large sums to waste to begin with - one that is asset light.

From multiple angles, we are in the process of what might be the greatest destruction of capital in history. In absolute terms without question. On a relative basis, it remains to be seen.

Best case, one company CEO after another will stop role playing as Tony Stark and will connsumately be rewarded by the market for doing so. That’s the peaceful sunset. Middle case, hyperscalers lose their unofficial “credit rating” from the equities market and go the way of defunct enterprises in history. Worst case, capex spending continues to warp the economy and monetary policy around the dubious prospect of a digital revolution driven by hardware volume - until it hits a wall at 80mph as earnings growth crests, and the technology remains insufficient to do anything useful for other sectors besides lay off support staff.

The stock market just showed us some serious strength. Major indices are bouncing back, with the Nasdaq leading the way. The big "Magnificent 7" tech giants and massive cloud companies are recovering fast after a brief drop. If you were worried about the recent tech sell-off, this looks like a textbook relief rally.

Investors have been dealing with a bit of an "air pocket" lately. Tech giants are spending billions on AI infrastructure (Capex), but they haven't shown immediate, massive profits from it yet. This lack of instant monetization caused some short-term panic and price swings.

But here is the real takeaway: the broader AI theme is still the most dominant force in the market. Chipmakers and semiconductor stocks are showing incredible resilience. This infrastructure buildout isn't stopping. In fact, these tech-heavy sectors just drove strong quarterly performances, proving that the foundation of the AI revolution is as solid as ever.

What do you think? Are we looking at a temporary bubble, or is this the perfect entry point before the next massive leg up?

I have been in crypto space since 2018. I saw many OGs at that time quit. Never feel disappointed like now. Even in last bear market when btc hits 10k, I'm still opptimistic. I'm still holding but I'm not buying dip. With the same money, I would rather put into AI stock and hold another 3 years.

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What layer of AI will see the biggest upside from this point onwards?

1. GPU designers

2. Memory providers

3. Switchgear

4. Cooling providers

5. Neoclouds

6. Energy providers

7. Hyperscalers

8. AI labs (OpenAI, Anthropic)

My take but please lets debate: energy providers and the whole industry behind chip manufacturing (ASML, TSMC) are the safest bets.

Let me know what you think!

Ok imagine tomorrow Ai bubble will burst what will be the impact on jobs openings and which type of roles will suffer more .