Take a wild guess…
I am genuinely curious how Musk will be affected by the AI bubble. You see, almost all AI companies are utilizing copious amounts of debt and equity sell-offs to fuel their wildly unprofitable operations. That is why everyone has suddenly realised the AI bubble is real and hugely dangerous, becautilize companies like OpenAI are borrowing more than they could ever create. But not for Musk. Take Tesla; its AI development is paid for by their car sales. So, when the bubble bursts, and it becomes impossible to raise capital to pay for AI, in theory Tesla could be the only company able to keep plodding on. At a surface level, it seems like Musk is perfectly placed to utilise the upcoming AI bubble burst to dominate the market. Or is he?
We are going to have to create some assumptions, becautilize we are talking about hypotheticals.
In this article, I am assuming that the AI bubble bursting will literally decimate the value of AI stocks, as the dot-com bubble did to internet companies. I am also assuming there will be a global debt crisis, driven by the over $1.2 trillion in AAA-rated bonds tied to debt given to AI companies that will almost entirely default, creating a similar situation to 2008. I am also assuming these two factors will severely contract available capital, as raising capital itself will be more…
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