Circular financing and various forms of booking sales ahead of or for future delivery are things that have caught up with other companies in the past and/or were straight-up SEC violations. Enron is an example.
Does Jensen's replacement have the industry connections, clout (or bully factor depending on perspective) and appetite to continue the circular financing? Its the CFO I think that is replacing him and they may have objected to these things all along and might have been over-ruled.
>Circular financing and various forms of booking sales ahead of or for future delivery are things that have caught up with other companies in the past and/or were straight-up SEC violations. Enron is an example.
But circular financing isn't illegal, unlike all the other things you listed
Whether its legal or not isn't really the point. The point is with Jensen out and someone else in, they may not like all those circular financing arrangements and may not do more of them. Or another way to phrase is the board and the executives could be less risky with these arrangements. NVidia CEO change (and end of circular financing and/or a cautious board/CEO) could be a funding shock to its weakest customers (unprofitable, debt laden companies like CoreWeave) which would hit NVidia hard because it is the supplier, investor, and loan backer (i.e. they are acting as the bank/insurer of the loan). If one of those companies can't pay, NVidia is left taking all the losses for the circular arrangement with that company.
It’s been a slow climb, but even looking at the last year, you’d have been better off holding tbills than NVDA. It’s pretty much where it was 1.5 years ago.
The market as a whole has done much better.
> Yet if you followed that advice you'd have missed out on a bunch of equity gains
If you never sold your NVDA you’d have round tripped with only a paltry dividend to show for it.
HN has been talking about a crash for almost as long as Dario has been saying white collar jobs will be gone in 6 months and Sam has been saying they’re 6 months away from AGI.
At this point we may literally get commercial nuclear fusion power (which has been “30 years away” for the last 60 years) before any of the other things happen.
Yeah it's pretty odd for me -- I was thoroughly convinced post-QE (~2009-2011) that we were just putting off the inevitable market downturn inherent to capitalism. It was simple and clear: debt was skyrocketing, the underlying economy wasn't changing noticeably other than the arrival of gig workers, and Wallstreet was more greedy and speculative than ever before.
Luckily/sadly, it seems there are more things in heaven and earth than are dreamt of in my media... and all that was pre singularity.
Oh huh just noticed that bit of your post. Uhh I have news you might not like: they announced AGI months ago. You should check it out. It's pretty wild.
People should put money at stake on their idle speculations instead of being another doomer posting consequence-free wishful bias confirmations, hoping AI will fail and leave them be at their now-pointless jobs. This is also why prediction markets are useful signal, which I'm sure is another topic that rustles your jimmies. https://polymarket.com/event/ai-bubble-burst-by
I don't think there is going to be a crash anymore. I have witnessed some capabilities with custom harnesses that make it really difficult to buy the doomsday story.
That is only one side of the equation. Whether something is overvalued has two elements: What is it's true value (unknown) and what is the price people are paying for it.
If you have witnessed miracles with a custom harness that's awesome, but it could still mean the valuation is too high, or maybe it's too low? Without putting specific numbers on it, it's an incomplete picture.
The dotcom bubble didn't burst because the web was pointless and doomed, it burst because it was massively overvalued.
AI being a transformative technology and AI companies being massively over leveraged betting on returns they can never realize are not mutually exclusive scenarios.
"custom harnesses" are a manufactured construct for a loop - the compounding error will never go away due to limitations on transformers (larger context doesn't fix this nor any of the shell game tools that rotate on your x/twitter) - this is old news (we're a few years into this).
I mean, from personal experience, larger context, smarter models, and better designed harnesses have transformed LLMs from "lol this piece of shit hallucinated a function signature" to me not having written a single line of code since fall 2025, compounding errors be damned.
It is going to break the back of SaaS. We can't outspend AI on infrastructure. We've had a global application deployed on GCP then AWS and I've never seen a stockout until this year, and now we get them so often we are being forced to reserve capacity. I also can't wrap my head around the basic economics. If you spend 10x yearly global gross revenue sales on building out infrastructure, software can only get more expensive to make.
Jesus dude chill. I am a person. I don’t know what’s up it looked fine when I initially accessed it, apparently it doesn’t work I just assumed I botched the link. Mea culpa. What’s the big deal here?
Well, now the CFO is in charge of nVidia we may see some problems.
Because while a founder CEO can play fast and loose with gray finance rules, I don't expect an appointed CFO can do the same. At least not one that expects to work again if they are found liable for it. It is kind of interesting in this way that the board has made this choice. It almost says they are looking to insulate against some liability here.
The more cynical framing, especially on this site, is that the "Founder CEO" has a presumptive immunity from prosecution for banal stuff like bookeeping. They aren't perceived as beholden to the shareholders in the same way, because we in the peanut gallery think they "own" the company more than mere investors do.
But obviously no, in the real world fraud is fraud and if you get caught cooking books with other people's money you go to jail.
I wake up, I read articles about how the AI crash is coming. I figure that it's not actually coming because everyone is talking about it, so it's priced in.
And then I pull up HN / LinkedIn / X / Substack where everyone is telling me that this is the new AI economy and the tech can't possibly flop, so I figure that the crash must be coming because there's too much optimism.
It’s made so many people so much money chasing this future that feels just over the next hill. I think being a downer about it is short-sighted, but it’s equally short-sighted to assume that the go-go crazy run that we’ve had will continue forever.
My experience with this has been insane, companies like Nvidia and Micron have made me pretty rich. But you can’t be emo about it. Take advantage of your gains and be a good steward of your resources.
I’m also old enough to remember 1996, and the amazing future as chronicled in Wired magazine. Come 2000, the wipeout was humbling, but many aspects of the web visionaries was correct.
> decide that it's not coming because everyone is expecting it and pricing it in.
I'm in the same boat. I'm hoping that the crashing is moving slowly enough that it can unwind carefully, and that not enough data centers got started that things can't simply be cancelled without much harm.
A bunch of fake money borrowed on commitments over data centers never built and plowed back into the ouroboros rather than escaping into the larger economy seems like it could be unwound with only a few people going broke. The only wasted real production would be in all of the chips - and they might be able to go somewhere, somehow. The data centers currently built will certainly be well-utilized - the overcapacity hasn't actually, physically been done, right?
If a bunch of circular financing went into doing something that never fully happened, is that a crash or a lifting of a mask over a real economy that has continued its previous slide?
And if capacity ends up fully utilized and prices do go up, won't there be dozens of viable half-done projects, the best of which that could be dusted off and rolled out again?
The public opinions on AI are split between two camps
the folk who don’t like AI slop forced in every product and media (creative/artistic AI backlash)
And the people who see the power of LLMs for coding, investigative work, science
I think there will be a crash with the creative side and all the companies that just adopted it without a real plan (FOMO) and sunk millions into it too quickly
But the actual tech is real and never going away. This is not a dot com bubble. This is a paradigm shift for people who know how to leverage an LLM effectively
It’s no longer smart to predict an AI bubble pop. The question is only when. Any article trying to sound smart without giving dates and justification for those dates isn’t saying anything.
Hasn't the AI bubble already popped a bit? I mean Oracle is at less than half its ATH. SuperMicro (another company suspected of smuggling hardware to China) is not worth 1/4th of its ATH.
What does TFA mean by an "AI Crash"?
That the rushed Anthropic IPO at 3% of the US GDP won't 10x to 30% of the US GDP?
That Micron (30% down from ATH) won't be selling much RAM anymore? Or that NVidia (30% down from ATH) won't have buyers for its shovels?
We have seen complete irrational exhuberance in the stock market but some stuff are already coming down back to earth (Datadog which reached 550 P/E TTM just took a more than 50% slap in the face if I'm not mistaken).
What are the candidates for the pop? Palantir? What else?
Circular financing, without regard to technical limitations. We've known about this for a few years. Old news.
AI hype organizations like Latent Space (+ others) ban people who disrespect any aspect of AI today, and articles like this get buried.
Isn’t it what they call Recursive Self-Investment?
Recursive self-investment. Can't believe we didn't come up with this phrase earlier
Truly bootstrapped…
Circular financing and various forms of booking sales ahead of or for future delivery are things that have caught up with other companies in the past and/or were straight-up SEC violations. Enron is an example.
Does Jensen's replacement have the industry connections, clout (or bully factor depending on perspective) and appetite to continue the circular financing? Its the CFO I think that is replacing him and they may have objected to these things all along and might have been over-ruled.
>Circular financing and various forms of booking sales ahead of or for future delivery are things that have caught up with other companies in the past and/or were straight-up SEC violations. Enron is an example.
But circular financing isn't illegal, unlike all the other things you listed
Whether its legal or not isn't really the point. The point is with Jensen out and someone else in, they may not like all those circular financing arrangements and may not do more of them. Or another way to phrase is the board and the executives could be less risky with these arrangements. NVidia CEO change (and end of circular financing and/or a cautious board/CEO) could be a funding shock to its weakest customers (unprofitable, debt laden companies like CoreWeave) which would hit NVidia hard because it is the supplier, investor, and loan backer (i.e. they are acting as the bank/insurer of the loan). If one of those companies can't pay, NVidia is left taking all the losses for the circular arrangement with that company.
Yeah doesn't seem like news. More of a case of when than if.
In the words of Keynes, "The market can stay irrational longer than you can stay solvent.”
A crash (or at least notable correction) is coming but I sure as hell couldn’t time when.
Yeah, and also the similar quote that being early is just as bad as being wrong.
Could be worse when near term cash is paying 5% and TIPS are paying 2.5-3%.
As they say, when you’ve won the game, it’s best to stop playing.
>Could be worse when near term cash is paying 5% and TIPS are paying 2.5-3%.
Wasn't this true for much of the AI bubble? Yet if you followed that advice you'd have missed out on a bunch of equity gains
> Wasn't this true for much of the AI bubble?
It’s been a slow climb, but even looking at the last year, you’d have been better off holding tbills than NVDA. It’s pretty much where it was 1.5 years ago.
The market as a whole has done much better.
> Yet if you followed that advice you'd have missed out on a bunch of equity gains
If you never sold your NVDA you’d have round tripped with only a paltry dividend to show for it.
A failed anthropic IPO could be a trigger, a lot is riding on the imaginary valuations of anthropic and openai.
A crash cannot happen when everyone is expecting it.
By definition, the conventional wisdom cannot predict big changes, whether positive or negative.
HN has been talking about a crash for almost as long as Dario has been saying white collar jobs will be gone in 6 months and Sam has been saying they’re 6 months away from AGI.
At this point we may literally get commercial nuclear fusion power (which has been “30 years away” for the last 60 years) before any of the other things happen.
Maybe, but only one of these predictions follows from known principles.
Yeah it's pretty odd for me -- I was thoroughly convinced post-QE (~2009-2011) that we were just putting off the inevitable market downturn inherent to capitalism. It was simple and clear: debt was skyrocketing, the underlying economy wasn't changing noticeably other than the arrival of gig workers, and Wallstreet was more greedy and speculative than ever before.
Luckily/sadly, it seems there are more things in heaven and earth than are dreamt of in my media... and all that was pre singularity.
Oh huh just noticed that bit of your post. Uhh I have news you might not like: they announced AGI months ago. You should check it out. It's pretty wild.
You don't just announce AGI. You declare it, as in everyone does. And that hasn't happened.
At a certain point the entire economy is a cycle. These are like the....epicycles.
(...The design hack to make the geocentric models work. Maybe it's also a metaphor...)
People should put money at stake on their idle speculations instead of being another doomer posting consequence-free wishful bias confirmations, hoping AI will fail and leave them be at their now-pointless jobs. This is also why prediction markets are useful signal, which I'm sure is another topic that rustles your jimmies. https://polymarket.com/event/ai-bubble-burst-by
They are putting money at stake. Then they post or comment whatever propaganda benefits them.
hey c'mon, there's no need for that kind of language. it's called 'recursive financing'
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I don't think there is going to be a crash anymore. I have witnessed some capabilities with custom harnesses that make it really difficult to buy the doomsday story.
That is only one side of the equation. Whether something is overvalued has two elements: What is it's true value (unknown) and what is the price people are paying for it.
If you have witnessed miracles with a custom harness that's awesome, but it could still mean the valuation is too high, or maybe it's too low? Without putting specific numbers on it, it's an incomplete picture.
The dotcom bubble didn't burst because the web was pointless and doomed, it burst because it was massively overvalued.
AI being a transformative technology and AI companies being massively over leveraged betting on returns they can never realize are not mutually exclusive scenarios.
What a silly perspective
Do you think there is no value in the Internet? Because that crashed.
Do you think there is no value in housing? Because that crashed
A market correction, aka a crash, merely implies that the valuation is is unreasonable for it's current impact.
The "crash" isn't going to happen because ai has no value, it's just going to be a chain reaction from some companies having overextended themselves
In 10 yrs a 1T valuation may be plausible, but today isn't 2036
"custom harnesses" are a manufactured construct for a loop - the compounding error will never go away due to limitations on transformers (larger context doesn't fix this nor any of the shell game tools that rotate on your x/twitter) - this is old news (we're a few years into this).
I mean, from personal experience, larger context, smarter models, and better designed harnesses have transformed LLMs from "lol this piece of shit hallucinated a function signature" to me not having written a single line of code since fall 2025, compounding errors be damned.
It is going to break the back of SaaS. We can't outspend AI on infrastructure. We've had a global application deployed on GCP then AWS and I've never seen a stockout until this year, and now we get them so often we are being forced to reserve capacity. I also can't wrap my head around the basic economics. If you spend 10x yearly global gross revenue sales on building out infrastructure, software can only get more expensive to make.
Anyone got a gift link or archive?
Gift link for 7 days https://www.economist.com/leaders/2026/11/12/why-you-should-...
Gifting like this with economist only works for personal sharing
> The recipient has seven days to access the story and can open it five times before it expires.
https://myaccount.economist.com/s/article/What-is-article-gi...
Unfortunately it already says expired.
The page says "gift" but I still can't see TFA. Am I holding it wrong?
I wonder if they limit how many times gift links can be accessed.
Requires a “free trial”
dang's rule is this can be a submission if the content can easily be accessed with some tech savviness. This might need to be flagged.
Nobody seems to be able to read the article.
> Nobody seems to be able to read the article.
that certainly doesn't stop people from downplaying it!
Yes, The Economist keeps updating its website security against anyone seeing an article for free.
This link is inaccessible, locked behind a very effective paywall.
And we have a salacious headline that people keep upvoting. At this point it's an ad for the Economist on HN.
copy html from https://search.google.com/test/rich-results?url=https%3A%2F%...
into https://codebeautify.org/htmlviewer
Gift link: https://www.economist.com/leaders/2026/11/12/why-you-should-...
“This gift link has expired. Register to access this article”
Archive.today had a bad grab, waiting for it to be updated after reporting it.
[flagged]
That link is to an effectively empty page.
Must’ve accidentally deleted a character from the URL or something. It’s archived
No, it’s not archived. It’s just a blank page.
Are you a bot or just otherwise incapable of looking at the link you posted?
Jesus dude chill. I am a person. I don’t know what’s up it looked fine when I initially accessed it, apparently it doesn’t work I just assumed I botched the link. Mea culpa. What’s the big deal here?
Well, now the CFO is in charge of nVidia we may see some problems.
Because while a founder CEO can play fast and loose with gray finance rules, I don't expect an appointed CFO can do the same. At least not one that expects to work again if they are found liable for it. It is kind of interesting in this way that the board has made this choice. It almost says they are looking to insulate against some liability here.
The more cynical framing, especially on this site, is that the "Founder CEO" has a presumptive immunity from prosecution for banal stuff like bookeeping. They aren't perceived as beholden to the shareholders in the same way, because we in the peanut gallery think they "own" the company more than mere investors do.
But obviously no, in the real world fraud is fraud and if you get caught cooking books with other people's money you go to jail.
Elon Musk is not in jail
The public has spoken and they do not like corruption. It’s only a matter of time.
we'll see. It is equally interpretable that they do not like gas being $1.50 higher than before.
According to polls economy was the #1 reason and corruption was #2.
The same CFO who has been signing off on every deal?
With the cover that they advised the CEO of the risk and it was accepted, yes
I wake up, I read articles about how the AI crash is coming. I figure that it's not actually coming because everyone is talking about it, so it's priced in.
And then I pull up HN / LinkedIn / X / Substack where everyone is telling me that this is the new AI economy and the tech can't possibly flop, so I figure that the crash must be coming because there's too much optimism.
I go to sleep. Then I wake up and read...
AI is a parabolic thing.
It’s made so many people so much money chasing this future that feels just over the next hill. I think being a downer about it is short-sighted, but it’s equally short-sighted to assume that the go-go crazy run that we’ve had will continue forever.
My experience with this has been insane, companies like Nvidia and Micron have made me pretty rich. But you can’t be emo about it. Take advantage of your gains and be a good steward of your resources.
I’m also old enough to remember 1996, and the amazing future as chronicled in Wired magazine. Come 2000, the wipeout was humbling, but many aspects of the web visionaries was correct.
> decide that it's not coming because everyone is expecting it and pricing it in.
I'm in the same boat. I'm hoping that the crashing is moving slowly enough that it can unwind carefully, and that not enough data centers got started that things can't simply be cancelled without much harm.
A bunch of fake money borrowed on commitments over data centers never built and plowed back into the ouroboros rather than escaping into the larger economy seems like it could be unwound with only a few people going broke. The only wasted real production would be in all of the chips - and they might be able to go somewhere, somehow. The data centers currently built will certainly be well-utilized - the overcapacity hasn't actually, physically been done, right?
If a bunch of circular financing went into doing something that never fully happened, is that a crash or a lifting of a mask over a real economy that has continued its previous slide?
And if capacity ends up fully utilized and prices do go up, won't there be dozens of viable half-done projects, the best of which that could be dusted off and rolled out again?
> the tech can't possibly flop
That's correct. The big companies may fall, but thanks to research papers, open models, etc, LLMs aren't going to disappear.
> And then I pull up HN / LinkedIn / X / Substack where everyone is telling me that this is the new AI economy and the tech can't possibly flop
Really? It feels like most people are talking about an AI bubble, with a vocal minority in opposition.
If most people are talking about a bubble, then...
The public opinions on AI are split between two camps
the folk who don’t like AI slop forced in every product and media (creative/artistic AI backlash)
And the people who see the power of LLMs for coding, investigative work, science
I think there will be a crash with the creative side and all the companies that just adopted it without a real plan (FOMO) and sunk millions into it too quickly
But the actual tech is real and never going away. This is not a dot com bubble. This is a paradigm shift for people who know how to leverage an LLM effectively
> This is not a dot com bubble. This is a paradigm shift for people who know how to leverage an LLM effectively
The Internet and personal computing was also a paradigm shift. Paradigm shift and bubble are not mutually exclusive.
Any day now: https://www.youtube.com/watch?v=9ETxmOfw0JM
So... a knee jerk contrarian who believes he is smarter than everyone else?
Well, we're both on HN, my friend.
..and how much of that AI optimism (and some pessimism) is generated by the same proprietary llms? Recursive self-enbubbling?
I guess a broken clock is right two times a day, 14 times a week and 700+ times an year?
Great can't wait for GPU prices to come down.
Someone else is going to figure out what to do with them before gamers can get their hands on then again
Emmm. AI maybe? Does AI stop becoming useful if SP500 drops? If anything we get constrained build out while demand continues.
Probably some breakthrough in quantum simulation running on them or something
I just want RAM
In life, one should expect anything. In compute, one should expect zero.
It’s no longer smart to predict an AI bubble pop. The question is only when. Any article trying to sound smart without giving dates and justification for those dates isn’t saying anything.
A lot of people still don’t think it will happen so it does need to be said
Hasn't the AI bubble already popped a bit? I mean Oracle is at less than half its ATH. SuperMicro (another company suspected of smuggling hardware to China) is not worth 1/4th of its ATH.
What does TFA mean by an "AI Crash"?
That the rushed Anthropic IPO at 3% of the US GDP won't 10x to 30% of the US GDP?
That Micron (30% down from ATH) won't be selling much RAM anymore? Or that NVidia (30% down from ATH) won't have buyers for its shovels?
We have seen complete irrational exhuberance in the stock market but some stuff are already coming down back to earth (Datadog which reached 550 P/E TTM just took a more than 50% slap in the face if I'm not mistaken).
What are the candidates for the pop? Palantir? What else?
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