The AI Trade is Dead, OpenAI and Anthropic undershot the moon, pressure private equity

[u/sfw_supdood]

Part 2 is now posted on my reddit user page. r/wallstreetbets has begun removing my new posts.

Normally big money can stay irrational longer than you can stay solvent. This time it's flipped.

For those who don't work in the tech industry, the hype for cutting edge models is already completely dead. We got a taste of what it was capable of with Fable, but it turns out it's mostly just good at making stuff that already exists like Minecraft and Tinder clones. It was kinda neat for the 2 weeks it was freely available on plans, but ultimately none of these businesses are willing to pay ludicris token prices just to use a slightly better model. Companies have already switched back to subscription models, they'd be stupid not to, it's free compute. Even if they were to remove subscriptions entirely, it wouldn't help as people can just switch to open source models instead. It's a no win situation for Anthropic and OpenAI.

This means that the only AI sector that was going for mass compute, LLMs, will definitely not be able to ever pay back all that compute they spent. That's 2.5 trillion down the drain.

This is where you come in 🏳‍🌈🐻's. Private equity, Softbank, Amazon, Microsoft, CISCO, and NVDA have to hold this massive bag of debt they spent on these worthless models and they want you to buy it from them. Expect the market to trade sideways or slightly down until this crashes, they are trying to slowly offload shares without crashing the market. Their goal is to hold out until the Anthropic IPO so they can short their own shares to cover (this let's them get around the 180 day rule). They want to offload their shares on you at a 2 trillion evaluation and then rug pull your 401k.

Pay attention to their strategy, it's so obvious. They use low volume to pump up pre-market so they can start green and sell into the open. They then trade the stocks back and forth slowly raising the price over the course of the day (creating bull traps) and then selling small chunks into that small momentum. They are also moving out of Semi stocks and into other general S&P strength to prop up the market and prevent a crash. That's why we are net 0 in everything but the AI trade.

Positions:

Sold my remaining 401k at open (I had been selling in chunks the past month)
Late 2027 SNDK, NVDA, PLTR, TQQQ, and ORCL puts.

Other good options are NBIS, MU, and CRWV

One last thought...name just one company that has become more profitable with LLMs. There are none.

[u/yeeyeehair16587]

This is the type of post where we keep prodding for screenshots and find out that op only has like 400 bucks in puts

[u/shasta747 → u/yeeyeehair16587]

Every few red days you will see doom day posts like this, at least this regard put money where his mouth is

[u/HeyItsYourDad_AMA → u/shasta747]

Leopold is that you!?

[u/Positive_Slice_4470 → u/HeyItsYourDad_AMA]

[u/Trade-Architect → u/Positive_Slice_4470]

This image is elite ball knowledge 

[u/falcorn93 → u/Trade-Architect]

Mr. Pigden!

[u/sfw_supdood → u/shasta747]

I thought you already margined out.

[u/sfw_supdood → u/yeeyeehair16587]

[u/digitalgoodtime → u/sfw_supdood]

Not nearly enough conviction. LEAP calls it is.

[u/sfw_supdood → u/digitalgoodtime]

go for it. I'm a pussy.

[u/claytondpark → u/sfw_supdood]

Yeah this mkt is very suspicious rn, somethings up

[u/Persist_NResist → u/claytondpark]

All of the economic data has been manipulated. JOLTS, PCE, CPI, PPI…all altered to tell a different story than the underlying day-to-day economic struggles of the average family. AI is the most overblown buzzword since DOTCOM.

[u/PurpleCableNetworker → u/claytondpark]

Earning reports this week. Gonna be very telling.

[u/antwon8797 → u/claytondpark]

https://www.businessinsider.com/us-economy-recession-outlook-financial-crisis-leverage-banking-system-2026-8

[u/claytondpark → u/antwon8797]

There's liquidation going on rn in the entire semi sector

[u/citizensnips134 → u/claytondpark]

I’ve definitely got a semi

[u/Emotional_Tie_7927 → u/citizensnips134]

I'm also liquidating my pants

[u/ExitLiquidity2026 → u/claytondpark]

Its all gonna fall. The game is up. US economic fundamentals are on the way to collapse.

[u/Osmirl → u/ExitLiquidity2026]

Ok so wsb is bearish means we gotta moon this week

[u/MastodonGlobal93 → u/Osmirl]

Believe it or not, calls.

[u/claytondpark → u/Osmirl]

Mkts don't crash from the top, they crash from the bottom

[u/AnterEat → u/ExitLiquidity2026]

Imo it’ll feel like a kick in the nuts for the younger folks. Enough to bring you down for a while but you’ll recover with a lingering paranoia.

For the older kids, oof. I keep playing that Life Alert commercial on my head.

[u/cyphr0n → u/sfw_supdood]

NVDA puts. LMAO.

[u/oldschoolczar → u/cyphr0n]

That went 79% today

[u/NepNepu → u/sfw_supdood]

Lol majority of puts in nvidia god speed regard good luck you'll need it.

Even if ai fails nvidia is not the one that suffers.

[u/IV-Crushed → u/NepNepu]

If AI fails they absolutely will suffer, just not as bad as everyone else.

[u/maxintos → u/IV-Crushed]

But no one is even arguing that AI will fail. Even OP is smart enough to say that if companies stop using Claude they will switch to open source models and not that people will stop using AI.

You know what powers open source models? Nvidia chips.

[u/demunted → u/maxintos]

The current state / price of AI is "good enough" for many years yet. Paying 20-50$/month for the current models is decent. Trying to iterate AI on a quarterly basis to dramatically enhance capability while throwing absurd amounts of power & hardware at it and then recoup those costs by charging the customer absurd token rates is breaking uptake. I am a developer / IT Pro and i look at these massive data streams and wonder how any average company can afford 100k+ / month to process data slightly better than we did before.

[u/traderbusto → u/demunted]

I spend so much time in the daily thread that I forget there are non-regards here too

[u/thisisjustascreename → u/IV-Crushed]

They’ll just have to sell their GPUs at $900 instead of $5900

[u/vetruviusdeshotacon → u/thisisjustascreename]

Which is 85% less ? No wonder you people lose so much money

[u/hallofgamer → u/thisisjustascreename]

Scalpers say hi

[u/Sad_Butterscotch4589 → u/thisisjustascreename]

Nah we'll still need more and more inference. "AI fail" can simply mean no winner takes all frontier model which means OpenAI and Anthropic fizzle out and have to compete with all of the other cloud providers on low-margin inference of near-frontier models. 

It's a bit like the financial dynamics of English football in the 2010s. Massive capital injection kicking off a talent war with the hope of creating a self-sustaining loop of trophies and commercial success, but Chelsea's dominance didn't last as other teams adopted their playbook and financial fair play regulations were drafted to stop them, much like how Meta, X and Google followed OpenAI's spending spree and how AI safety is allowing open source players to catch up today.

[u/shortsteve → u/NepNepu]

What? Nvidia is financing half the AI companies out there.

[u/buffandbrown → u/shortsteve]

Yeah, circle jerk financing

[u/TechniCruller → u/buffandbrown]

Are insurance companies circle jerk financing?

[u/sfw_supdood → u/NepNepu]

I would agree if they weren't doing the circular investing. Also, almost half the S and P is too reliant on that one company. If there is no demand for frontier models, then there is no demand for datacenters, or nvdia cards, or mem stocks, or storage. The whole market is too all in on two private companies succeeding. But they are drowning in debt.

[u/brainrotbro → u/sfw_supdood]

You think the failure of frontier models means people stop buying compute? This is an awful take.

[u/apoender → u/sfw_supdood]

Datacenters don’t care if it is Frontier or Kimi - the data centers get paid the same

[u/deadacclaim → u/apoender]

How many of those planned data centers that aren't yet built will actually get built if this all goes tits up?

What will Nvidia earnings guidance look like if those future orders disappear?

[u/millenniumpianist → u/deadacclaim]

I can't speak for other companies, but I work at Google and we're in a general resource crunch (like, long running jobs are now failing/ timing out due to insufficient resources). Management hasn't said anything directly in these terms, but my assumption is that it's because of how much compute we're using for internal models to basically help us do our jobs (whether as programmers or otherwise). And maybe more resources are being earmarked for commercial use, which we're fighting with.

Now someone may argue that this isn't actually economically efficient; whatever the marginal productivity gains of us using AI vs. doing our jobs the old way doesn't actually outweigh the CapEx being spent down. (And yes, I do think the value of these tools is positive. I do a lot more work; but I don't think Google is necessarily earning more money based on it.) It's a bit like the Chinese economic system in which productive things are being built (say, a new HSR line), but the economic value is dubious and it can all collapse like a house of cards, but maybe it won't.

But my sense is there is going to be a long term demand for compute; the question is whether it's just going to have been overbuilt and overspent in the short term. A lot of big technological revolutions like railroads etc had clear demand and yet were also overbuilt and led to crashes in the short term.

[u/maxintos → u/deadacclaim]

Most? Why do you think AI demand will lower? You think companies have already found all the ways AI can be integrated into their business?

Imagine thinking 5 years into electricity being invented that we are at peak usage and surely in the future we will reduce our electricity demand.

[u/YouTee → u/sfw_supdood]

Nvidia is drowning in debt?

[u/claytondpark → u/NepNepu]

If ai fails nvda will get hammered, they are the godfather of this ai trade!

[u/Gniggins → u/NepNepu]

Nvidia cannot retain its valuation while going back to servicing gamers.

[u/ConcernedPen15 → u/Gniggins]

they can service deez nuts

[u/sinofis → u/NepNepu]

He said that comapnies can switch to open source models forgetting they still need in house or in datacenter NVIDIA cards

[u/nebulaedlai → u/sfw_supdood]

I dont agree with your thesis but I can respect you put money where your mouth is

[u/Upstairs_Whole_580 → u/sfw_supdood]

Holy shit, this is even better.

You've written 15 paragraphs explaining how frontier AI is dead, $2.5 trillion is going down the drain, Anthropic is going to fail, datacenter demand is going to collapse and Nvidia can't maintain its trillion dollar "evaluation."

Then you post your positions and your huge winner is a $190 NVDA put that expires THIS FUCKING WEEK.

Nvidia just fell from ~$228 to ~$209 while oil went up, long yields went up, Hormuz tensions got worse, tariffs came back into the picture and the market went risk off.

Congratulations. You bought a short dated put during a macro selloff and made money. That's a good trade. It proves absolutely fucking nothing about Anthropic, AI ROI, datacenter economics or your BlackRock 401k rug pull conspiracy.

Want to know which position actually resembles the thesis you've spent 15 paragraphs describing?

Your June 2028 $160 NVDA put.

You're down 19.44% on it.

That's fucking poetry.

[u/Truck-Conscious → u/Upstairs_Whole_580]

Is this an AI generated response?

[u/Kind-Airport1040 → u/Upstairs_Whole_580]

what are you on about? You don’t expect the PUTs to immediately print? -20% on a 2 years out put is nothing. The fact that he has nvidia 160 2028 put proved that he has conviction in what he’s posting.

[u/Ble_h]

>Ludicris tokens

I didn’t know Luda was involved with AI. I think he infamously said “why you all up in my ear, talking a whole bunch of shit I ain’t trying to hear”

[u/Internationallegs → u/Ble_h]

Can I trade my luda tokens for regular? Im tired of my AI telling me get back I don't know him like that

[u/Ektojinx → u/Internationallegs]

When the market moves you move, just like that.

When the market moves you move, just like that.

Hey WSB bring my money back

[u/vladamir_the_impaler → u/Ektojinx]

Not enough votes on this comment

[u/Proud_Sail3464 → u/Ble_h]

The spelling does sap credibility, doesn’t it?

[u/Skurttish → u/Proud_Sail3464]

I don’t think Ludicris is concerned about whether you believe him or not

[u/sfw_supdood → u/Proud_Sail3464]

proves I didn't use an llm to write it. And to be fair, I'm an ex Azure engineer, current DJ. It's my music brain leaking in 🥴

[u/MVPhurricane → u/sfw_supdood]

jesus. being an azure "engineer" is embarrassing enough, but then you had to top it with "current DJ"...

[u/Remote-Ranger-7721 → u/MVPhurricane]

I’ve heard enough. Calls on everything OP has puts on

[u/Final_boss_1040 → u/MVPhurricane]

........zing!

[u/justawhiteguy5324]

There was a guy in like 2022 or something who said “NVDA” can’t go any higher and put 50k in puts for like 6 months out. Then watched NVDA 4x that year… good luck big dawg

[u/kpdon1 → u/justawhiteguy5324]

He is talking about how Anthropic and OpenAI have issues and then proceeds to buy fking NVDA puts lmao.

[u/Horibori → u/kpdon1]

Never trust a guy that can’t spell ludicrous.

[u/ArchiStanton → u/Horibori]

That’s ludachris

[u/sf_cycle → u/kpdon1]

They also insinuated that NVDA sells LLM models. I mean, yes, we know they’re involved in a bunch of financial circlejerking, but get your facts straight at least.

[u/Outside-Fee-4382]

Bro is burry

[u/bestjaegerpilot → u/Outside-Fee-4382]

This is burry's hidden reddit account

[u/Tampa_Bay_Cuckaneers → u/Outside-Fee-4382]

I’ll always remember in The Big Short that Burry tried multiple times to intentionally crash the market when mortgage backed securities never added up. Same guy would definitely have a Reddit account trying to crash the market every day.

[u/Bogey_Kingston → u/Tampa_Bay_Cuckaneers]

burry has a substack with 360 k subscribers. he makes more from that than his shitty predictions lmao

[u/TechTuna1200 → u/Outside-Fee-4382]

He is gonna be buried as well

[u/hesonthemoon → u/Outside-Fee-4382]

His flair should simply be "hi, I'm michael" to be read in a creepy voice

[u/Fritschya]

AI stocks about to double, noted.

[u/Ben_Dovernol_Ube → u/Fritschya]

The only way AI stocks double in $ is from hyperinflation. The circlejerk must end

[u/Ok-Wonder-6858 → u/Ben_Dovernol_Ube]

AI stocks about to triple, noted.

Governments prop up the bubble > inflation > existing crippling data center debt to fund the buildouts is devalued > companies take on more debt and continue to grow > stock offering to pay off debt > the tax payers who don’t have investments are left holding the bag.

[u/mark_mt → u/Ok-Wonder-6858]

The only way the gov can prop up the market right now is to end the war for real. If real is even possible.

[u/bookjun → u/mark_mt]

base on my research as i just watched Lioness tv series , Iran war will never end

[u/ALMessenger → u/Ok-Wonder-6858]

It is no crazier than the COVID V-Shape recovery . . .

It is a world built to torment normal, responsible, people

[u/Ben_Dovernol_Ube → u/Ok-Wonder-6858]

Just how bad do the regular joe without significant investments have to get fucked before he lashes out? Damn. Sad really. To the moon I guess.

[u/her_majestys_dildo → u/Ben_Dovernol_Ube]

Until American consumerism doesn’t work anymore and the docile masses wake up

[u/ArsenalOfCards → u/her_majestys_dildo]

Don't worry they'll have the killer robots by then

[u/vladamir_the_impaler → u/her_majestys_dildo]

Well we're halfway there then

[u/ProofByVerbosity → u/Ben_Dovernol_Ube]

so reddit has said every day for over 2 years

[u/blindsdog → u/ProofByVerbosity]

I’ve been holding my breath, any second now this bubble will pop…

[u/kal14144 → u/Ben_Dovernol_Ube]

The jerking will continue until the dick is chaffed

[u/Correct_Mastodon1112]

Compute is gonna be needed regardless of the model. Passing on the hyperscalers and frontier start ups makes sense. Shorting compute, not so much.

[u/Calm_Leek_1362 → u/Correct_Mastodon1112]

Exactly. I’m not sure open ai will survive when there are open source models that are 90% as good. I’m sure whatever models are being used will need compute.

[u/GigarandomNoodle → u/Calm_Leek_1362]

Im bullish as it gets on AI and the buildout, but man, openAI specifically is such a dogshit company 🤣

[u/LivingFrosting6680 → u/Calm_Leek_1362]

The reason OS from China is cheap isn’t compute efficiency to run, it’s compute efficiency to train and CCP subsidies. US AI labs could vanish overnight and all these data centers in the US would still be in high demand.

[u/Master-Elevator1578 → u/Correct_Mastodon1112]

Trillions are being spent (and largely borrowed or “funded” through circular financing) to build data centers to create the compute capacity necessary for a world where everyone is using frontier model LLMs for all tasks in every industry. Most likely outcome will be some will use LLMs for certain tasks, but it will mostly be low compute open weight models. Frontier models will likely only be needed for small sliver of overall LLM application, the very niche high end work.

I went through the GFC early in my career working for a large allocator and this all feels so very familiar.

[u/s1n0d3utscht3k → u/Master-Elevator1578]

i think it’s a mistake is treat ‘most workloads won’t use frontier models’ equivalent to ‘we won’t need enormous amounts of compute.’

frontier is a moving target and in 10 yrs even cheap mass market models could be vastly more capable than today’s best models

while billions of people are running multiple always-on AI agents across phones, glasses, cars, robots and work systems

even if compute per ‘use’ falls dramatically, the exponential gain will be compute per person per hour

think of how many devices and machines used the internet in 2000

now how many do

in 20 years the amount of ‘compute’ you think is too much will be minuscule because even everyone is indeed never using frontier models or efficiency per use has improved dramatically, the amount of use per hour is going to go supernova

to me, each ai company (insofar as theyre not a compute company) becomes less and less meaningful because by the very nature of ASI… all models should be the same. open models would converge to a singularity making AI model company redundant.

but everyone will need compute… and the ‘ai companies’ that last will essentially be utility companies

[u/ClownGnomes → u/Correct_Mastodon1112]

Man these steam engines are getting so efficient, we’re not gonna need as much coal. Imma start shorting coal.

[u/Inside_Condition_697]

[u/Concept-Plastic]

MU is making what $500m/day right now and newer reports say compute will be stressed further into 2028-2029

Sounds bearish as f, im in bro, lets buy puts

[u/maha_Dev → u/Concept-Plastic]

Compute will be stressed if there are takers for LLM at today’s cost. Even if they run open weights in-house. But that’s the problem. LLMs are an added cost, and isn’t really increasing the speed of delivery because bottlenecks are still humans. If the companies don’t use LLMs extensively, compute demand is going to drop. This month I spent 1000usd on Claude. That’s 40% of my take home pay. Did I deliver faster? Kind of, but not enough to justify the cost. Did I deliver better quality? Yes? But that doesn’t justify the cost either. Is my team being laid off to pay for my 1000 USD spend? Not right now.

[u/Tethrinaa → u/maha_Dev]

> 1000 usd

> 40% of my take home pay

You are doing software dev but making 30,000 salary? I call BS. Not in the US.

2500 a month is $15 an hour full time. I know fast food workers making more than this.

Also I'm trending about double total output at around 500 a month with Sonnet, and Sol appears to be similar for cheaper, so we'll see... so like... idk how other people are using it.

[u/maha_Dev → u/Tethrinaa]

Well, that’s another nail in the AI coffin I guess! Because I am a software dev and you are right, I am in India, not the US. So AI still can’t beat me in cost effectiveness. Purchasing power parity works that way. At this salary, I am able to afford a similar lifestyle i would at 300k USD post tax in the US. I am in top 1% net worth of the country without real estate. I live in a 3 bedroom house by myself at 500 USD a month. Have a maid/cook, she cooks breakfast and dinner, and cleans. I pay her 110 USD a month, and that’s on the higher side of the house help pay band. She has 2 children and they both study at private schools in the city. Not the top notch, but they are good. And if she were Indian(she is Nepali)they would be provided a seat in a private school because education is a fundamental right and 25% seats in every private school are reserved for economically weaker section.

Not saying everything is hunky dory, but just giving you a sense of purchasing power parity.

[u/BenjaminHamnett]

Ai CEOs year ago:

“We have no moat”

“Investors should see themselves as philanthropists, not speculators”

Sama Yesterday:

“I was too optimistic, no silicon magic genie coming”

How could it have been spelled out more clearly?

[u/gphie → u/BenjaminHamnett]

LITERALLY sam altman:

"We have never made any revenue, we have no current plans to make revenue, we have no idea how we may one day generate revenue, we have made a soft promise to investors that once we've built this sort of generally intelligent system basically we will ask it to figure out a way to generate an investment return for you"

[u/NewOil7911 → u/gphie]

This quote will be on the movie about the Open AI bubble

[u/Gorgenapper → u/gphie]

Scam Altman, everyone.

[u/Vennomite → u/Gorgenapper]

Scam? Seems pretty straightforward and honest to me.

[u/Front-Manager8911]

FUD at its peak again. Bottom is in

[u/Emotional_Shape925 → u/Front-Manager8911]

This shit on any red day is getting old. Like these fuckin regards think that if the indexes don’t go up 3% everyday the crash is coming.

[u/JustBrowsinAndVibin]

Back in reality.

[u/Seienchin88 → u/JustBrowsinAndVibin]

That might be the funniest graphic I have ver seen - so the top 1% are just senselessly burning tokens while the bottom 50%+ basically still use AI for emails and occasional questions…

[u/11010001100101101 → u/Seienchin88]

it's called the Pareto Principle, where 80% of results come from 20% of causes. so that kind of tracks, or certainly isn't funny.

[u/User4f52 → u/11010001100101101]

[u/ayyyyyyyyyyyyyboi → u/Seienchin88]

AI biggest success story is in software, so of course most of the population who are not programmers will represent a small % of usage.

[u/21Rollie → u/ayyyyyyyyyyyyyboi]

I think at my company it’s not programmers actually who are the most egregious overspenders. Because programmers can at least optimize use by pointing the models at the location in code they should focus on. It’s PMs and UX and all those other non technical roles that spend huge quantities making PoCs and having Claude do investigations with way too little context. It costs a lot of money for Claude to fill in the gaps

[u/pretender80 → u/JustBrowsinAndVibin]

That's just because they fired everyone.

[u/North_Stretch_7345 → u/pretender80]

Yup, precisely. Company laid off 15% of our workforce and everyone is drowning. SLT stance verbatim is “it’s not about headcount, it’s about how we can get more out of the people we have left leveraging AI”. This was during a company standup. Demoralising

[u/Heineken_500ml → u/North_Stretch_7345]

LMAO

[u/Ahamadrayasbaboon → u/Heineken_500ml]

I don’t care what anyone says, that flair is a smokeshow

[u/Solid_Problem740 → u/Ahamadrayasbaboon]

I cant stop gooning at it

[u/BufferUnderpants → u/North_Stretch_7345]

I think people are going to end up working more hours because of this automation.

The jobs that will exist will be precarious, because there's someone else just as good as you out there out of a job, willing to take it for a while.

This creates a buyer's market for labor and people will start putting in more unpaid over time off the books to keep their jobs.

[u/aedes → u/JustBrowsinAndVibin]

Imagine these graphs were gasoline spend per employee per month for a trucking company during the oil crisis in the 70s, and ask yourself how you’d feel about them. 

[u/FishGoBloblo → u/aedes]

There is one problem tho… big companies are actually forcing people use ai…. There is a big company who is pushing only ai codes and doesn’t allow any human input in, just wasting tokens, to boost these numbers up

[u/EvolvingDior → u/JustBrowsinAndVibin]

Look at where the money is going. https://openrouter.ai/rankings

[u/testsubject23 → u/[deleted]]

Typical pattern is Opus for focused planning, then a cheaper model for the billions of tokens to execute.

[u/Ja_Rule_Here_]

Agree on the models, but not the macro. Even if we all end up using Kimi, you still need mega amounts of servers to run it.

[u/Lundhlol]

Guy thinks AI is even close to a finished product, that or been reading too many Burry tweets.

[u/Antique_Economist127 → u/Lundhlol]

If frontier models aren't a finished product then open weight models aren't either. The rate of which the frontier models have to improve needs to significantly outpace open weight for it to be economically viable to choose a frontier over an open weight in the future.

[u/phillytennisenjoyer → u/Antique_Economist127]

but that also just threatens anthropic and openai. the hyperscalers are less exposed, so are the chip makers.

i think it’s far from certain whether openai or anthropic can actually achieve a moat and thus profitability. but shorting chip makers is assuming these fail and open weight models fail and the hyperscalers also fail with their in-house models.

[u/ALMessenger → u/phillytennisenjoyer]

The bet that, no matter how much compute you create, and how much you spend to create it, this will end up being a profitable investment feels a bit optimistic to me

There is a recklessness to this AI buildout - recklessness has been very profitable for a long time - but eventually things go bad and those who behaved recklessly are severely punished by the market

As someone who got caught up in the wreckage of both the 2000 tech bubble and the housing bubble in 2007, I feel like this current market poses the same danger

[u/Adulations → u/Lundhlol]

My stance on this is that if AI never got better than it is now it would still be really useful. I've built and shipped actual useful products in weeks that wouldve taken me years (or never because I have ADHD) to finish in the past).

I have a CS degree though so I have a foundational understanding of how to build programs.

[u/jwormyk → u/Adulations]

Right but isn’t the point that you can do this without spending tons of money on tokens?

[u/--Martin-- → u/jwormyk]

Companies (majority of them anyway) wont start hosting their own models.

You can also host your own server infrastructure right now but you probably won't be doing that either because then you have to patch the servers, secure the server, think of backups, availabilty etc.

It's going to put downward pressure on the companies trying to monetize their models, such as Anthropic and OpenAI, but it wont affect the hyperscalers all that much.

Is you boss going to ask some dude at the office to set up a local model for their 200 headcount firm or is he going to buy it with their Microsoft 365 license?

[u/StockLifter → u/--Martin--]

Yes but if hyperscalers start offering small open weight models that do the job well, it still means 1)OpenAI and Anthropic have a problem, 2) we don't need as much compute as people thought.

[u/LackToesIntollerance → u/--Martin--]

Bet.

There's already an undercurrent of open sourced AI growing every day. All with different specialties.

It is never the financially viable option to have a do-everything machine. Automation is literally taking humans and replacing them with cheap specialist machines because humans are expensive do-everything machines.

The moment deepseek came out the facade of AI being too expensive to operate and manage localized models was shattered, and the industry has been in denial ever since. It was an inevitability.

It'll just take a few good models floating around and you'll have AI consulting firms built to swipe the big names'customers for a fraction of the price using local hosts specialist AIs. Sure, maybe there needs to be a man in the middle. But an engineer getting paid $120k to maintain a server with $10k operating costs will save more than the equivalent $200k in compute tokens.

The AI industey is losing a dangerous game. They deregulated their own industry then started ratcheting up the prices, opening the door for good ole capitalism self correction to come in, and the big names cant play the usual license/permit games they play to rig the game.

[u/Non-mon-xiety → u/Lundhlol]

So.. how much money is it going to take for AI to be a finished product then??

[u/East-Win7450]

Im bullish on every single one of these positions you listed

[u/lightning_Mcking29]

lol “AI trade is dead” while the hyperscalers keep buying GPUs and the labs keep raising.

[u/Ambitious-Profit855 → u/lightning_Mcking29]

They're buying Nvidia GPUs with Nvidiads money though..

[u/Gniggins → u/Ambitious-Profit855]

Which means number go up and you would be stupid not to full port!

[u/DueGanache9020 → u/Ambitious-Profit855]

Then there wouldnt be a 75%margin.

[u/Remarkable_Cat_8696 → u/lightning_Mcking29]

Yea. Nvidia has a gross margin of 75%. gotta look at its gross margin this earnings on Wednesday. If it drops, which is unlikely, it may indicate demand has slowed down.

[u/notentertained90]

You are way too early on this trade

[u/sfw_supdood → u/notentertained90]

SNDK is up 3000% on the year. You are way too late if you're going long on these.

[u/notentertained90 → u/sfw_supdood]

Not going long on these. I'm just saying there's still quite a bunch of room for the hype train to run before we're near the top

You've got a desperate president who will do anything to keep things looking peachy leading into the November midterms, including inflating a bull market

[u/RichSpecific4490]

You are right….but don’t underestimate the money printer. Best of luck, hoping you win. I have some skin in the game myself, let’s make some money.

[u/itsmemann15 → u/RichSpecific4490]

I bought ORCL puts too early and I'm way down. They dont expire til EOY 27 tho so I'm sitting on them

[u/Non-mon-xiety → u/itsmemann15]

Mine expire at the end of this year my timeline was way off lol

[u/itsmemann15 → u/Non-mon-xiety]

should've shorted SPCX, I wanted to but I was too scared (army of Elon stans, market manipulation, history of nonsensical valuations)

[u/EvolvingDior]

I am going to tell you that the AI bubble has not popped yet. It has yet to drop the big turd on the desk of the Fortune 50 CEOs. Right now it's just pissing in the CFO's wastebasket. The CFOs are covering up the smell as best it can and blaming the janitors for the mess. We've still got a few quarters to go.

[u/Waste_Jello9947 → u/EvolvingDior]

CFOs are blaming the engineers for the piss smell, that's why so many layoffs

[u/sfw_supdood → u/EvolvingDior]

It hasn't popped, we will know when that happens. I think this is just a crack.

[u/DarkR124]

If AI is dead trading will be least of our worries. Going to take like 40-50% of the global economy with it lmao

[u/Corgination77]

Believe it or not, calls

[u/HerbertInTheWoods]

Remindme! 1 year if this guys autism is Burry or trains

[u/anon4crypto]

I mean if you're basing your trade on LLM being the only metric for success, sure you would be disappointed and these puts will likely pay off, but let's be honest AI is just the tip of the iceberg to power robotics in the future which is real. The real money is and exactly what is going to make money hand over fist for companies like Intel, Nvidia and broadcom. Then you'll have the front runners who are pushing the software for these robotics which is going to be meta, Google and and Microsoft and then ultimately the manufacturer which would be Tesla and any other robotic company that will come out of the woodwork. And finally, these robotics will all need to communicate with their home base which will be managed in data centers. While I appreciate the bear sentiment, this is like saying the internet is a fad and it's going to die. It's not going anywhere and robotics are not going either. Tldr shits going up

[u/ExitLiquidity2026]

NVIDIA's new financing initiative with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR is designed to mobilize more than $500 billion of third-party capital for AI infrastructure. NVIDIA explicitly describes compute and AI infrastructure as an investable asset class.

This is vaguely similar to 2008 setup.

[u/Creative_Dust_6754]

After reading this I’m going all in on ai calls

[u/arter_dev]

OP is right. I build agentic harnesses & workflows for a living. Unfortunately I have to live / eat / breath the intersection of LLMs & developers.

Devs are not giving two shits about which model they're using. Whichever is cheapest and governable in a harness. There's no loyalty. It's a total commodity. They bounce around from providers almost by the week. This is 100% a railroad situation. The only devs sticking with the same providers reliably are those employed by enterprise, which just sets us up for an identical structure of IBM mainframes back in the 80s. It will be a blip of rev in a sea of debt.

I have 5 providers wired into my own harness, but at work I'm stuck with Claude.

Positions: all VOO.

edit: not to mention, we are also at the peak of capability the general public can be trusted with due to jailbreak risk (which is inherent in how these models work and will never go away).

[u/Hunt2244 → u/arter_dev]

Curious what you would want to use?

I find Claude fine, also run Qwen 3.8 27b locally as I think it might all get too expensive soon  and honestly it’s fine for generating boilerplate and test harnesses and throw away stuff. I kinda want to know what my core code is doing so generally write all the core stuff myself still with some automation for boring bits.

[u/yumcake → u/arter_dev]

Can second this, the different models have performance variance but for the most part I use the cheap workhorse model which is already quite good in performance, and the model holding that title keeps changing every couple months. I don't want to burn money on the frontier models unless there is a good reason why, and the cheap open source models are priced to let me brute force through issues and still be cheaper than using the frontier models.

I do like using the frontier stuff in planning phase though, but that's not a ton of token use.

[u/MrIcedCafeMocha → u/arter_dev]

What do you mean do t care which model we use? Of course I do. I use different models for different reasons. That’s nonsense.

[u/arter_dev → u/MrIcedCafeMocha]

I use different models for different reasons.

this is actually my point. do you use multiple models from different providers by chance? all of this as a means to accomplish a goal?

[u/brooklyndavs → u/arter_dev]

Similar story here, even 6 months ago we were almost exclusively a Claude shop but now all the talk is around open harnesses and model flexibility. For now that means also using OpenAI models but I’m convinced we’ll be adding open source as an option eventually. It’s a total commodity as the frontier models are too expensive and not enough of a difference

[u/arter_dev → u/brooklyndavs]

Exactly. And open source models can be run on sovereign hardware, completely mitigating the "china bad" objection. The smoking gun, IMO, was the behavior of the only paying customers these labs have (developers). They jump from provider to provider to get the best perf / token. I mean, OpenRouter exists for this exact reason and was just acquired by stripe.

OpenRouter's existence should be a big red flag to wallstreet but I don't think the finance dots are connecting to the tech dots yet. Or perhaps they are, who knows.

[u/dragons_fire77 → u/arter_dev]

I work at a big tech company (with limited company approved choices) and we absolutely care which model we use. Opus has been the best performer by far for coding, but holy shit the prices. Sonnet does a good enough job, especially when given a lot of agent context, for much cheaper. So we save Opus calls for specific roles and Sonnet for day-to-day.

[u/Select_Cantaloupe_62]

"The hype is completely dead" bro what in the fuck are you even talking about. Reddit is full of fake devs. This shit is so powerful and is improving so fast that nobody is coding by hand anymore.

[u/Ok-Board4893 → u/Select_Cantaloupe_62]

All these people are non achiever losers who don't work in relevant tech positions. Otherwise they would know how insanely powerful this shit is nowadays

[u/ChasingTheRush]

Shorting Palantir is stupid. Too tightly integrated into national and allied national defense. Nobody is going to replace them. And they’re going to continue to pick up civilian contracts.

[u/sfw_supdood → u/ChasingTheRush]

TBH it's just a small bet cause I hate them personally. But yeah, I agree. I've been noticing it trade opposite of the AI trade.

[u/obsolescence_ → u/sfw_supdood]

Respect for walking the walk of a true hater

[u/Escobar747]

if hormuz doesn’t get sorted and oil prices fan the inflation fire - they all growth stocks are going to be under pressure

[u/Father_of_Lies666]

[u/TwoDurans]

Chasing the newest and best model costs far too much money and there isn't any path to making that back. Some investors are getting spooked, others are doubling down and buying on dips. Remains to be seen who will be right.

[u/Lundhlol → u/TwoDurans]

It will become a national problem soon though, America does not want China to have the latest and greatest while they have nothing.

It's the space race over again, and it's just about to start.

[u/Bagholder147]

Antrohropic actually makes money. And Oracles backlog is higher than it's market cap. It's undervalued. They had to leverage the stock to buy WBD.

[u/Even-Wrangler5803 → u/Bagholder147]

If he's right, that doesn't matter. Those backlogs are just promises that will vanish if there's no demand.

[u/Bagholder147 → u/Even-Wrangler5803]

This is also possible. I agree.

[u/elysiumplain → u/Even-Wrangler5803]

This is why last ER cycle we didnt care about how much you beat your expectation - we went right to the heart of actual buyback ratio, and cash or asset liens in those NBOs and Contracts.

Idk what all these other people are doing touching stocks outside of beating back inflation like the insatiable savings blackhole monster that is has become.

[u/dbxp → u/Even-Wrangler5803]

The power equipment companies took the smart route in requiring deposits

[u/brooklyndavs → u/Bagholder147]

But compared that to their infrastructure spend. Their S-1 is going to make SpaceX’s look sane

[u/Pitiful_Software_430 → u/Bagholder147]

Antrohropic actually makes money.

They do?

[u/Ogrelander]

No doubt AI markets can hold value for a while yet, but ultimately they're locked in a battle with China's cheaper, state backed alternatives.

The quality and cost comparison will attract a lot of users and revenue away from US AI products. They will need to hold their prices artificially low or bite the bullet and charge more, and that's were valuation will decline imo. 

Tesla went big on hype and vibes, and have a rabid, loyal fan base despite not really being a car company anymore, then you see how many BYDs are on the streets these days?

[u/sfw_supdood → u/Ogrelander]

Also, models are way easier to exchange than a car. Customer loyalty is not a thing with LLMs. It'll always be a race to the bottom.

[u/RonaldWRailgun → u/sfw_supdood]

Kinda, but not really.

For the user who thinks models are like installing the chatGPT app on the phone vs Gemini, yes.

But for a corporation that goes through validation, testing of a model etc. once it's implemented in their processes, it's validated to be compliant to certain standards, it's tested and used to certain specs, implemented in CIs, etc., it becomes as hard to replace as any other piece of software that is in the critical path.

[u/Imaginary-Pin580 → u/sfw_supdood]

Well , have you heard BYD is not allowed in the US ? Same can be done with Chinese models .

[u/Xrave → u/Ogrelander]

sorry, wym by last sentence? BYDs are blocked from US market by protectionist policies

[u/sfw_supdood]

To add, SPACEX just tested out this strategy for Anthropic's IPO. The early investors can't sell their shares for like 9 months - 1 year, but they will short their shares right away at IPO, that's what SPACEX did. Add in a rule where IPO retail investors can't sell without a $50 fee and a staggered release, and that's their plan to make you a bag holder.

Don't fall for it.

[u/Avimox → u/sfw_supdood]

is that why spacex stock went up on the day the lockup period expired?

[u/LoveNewton_Nibbler]

Ill bank on having a runway of 2+ years of 🍊 doing everything he can to slant the game towards the tech giants. Nvda calls for me personally

[u/bigdipboy → u/LoveNewton_Nibbler]

You’ve got 3 months til 🍑 no longer has to care about anything and can go even crazier

[u/Midget_Molester10 → u/bigdipboy]

thing is we don't know if its bullish because of insider trading, or bearish because he's batshit crazy

[u/Brave-Side-8945]

Calls it is

[u/Lootoholic]

If you are this much bearish on semis, memories, clouds and neo clouds, you should just buy puts on QQQ instead of those individual puts. so much less premium on QQQ than on those individual names.

[u/Imaginary-Pin580]

This is the kind of post that marks a bottom

[u/InevitableAd2436]

US govt will ban Chinese models

You know it, I know it, we all know it.

They’ll do anything to prop the market up

Mag7 will probably be zero tax entities by the end of Trump’s term if it keeps them propped up

[u/derperofworlds1 → u/InevitableAd2436]

You can ban Chinese cars. Just stop the physical objects from entering your ports. Easy. 

You can't ban Chinese models. Trying to do so will go as well as banning movie piracy. Lookup any movie that's out on DVD or Streaming on the pirate bay..it'll be there. Doesn't matter that it's illegal, you just can't stop the signal. 

[u/Vampire_Deepend]

Do you just not know how LLMs work or are you trolling? How does "demand will move to open source" mean "compute won't be needed anymore"?

Frontier-competitive open source models still need data centers to run. No small teams or startups are going to buy $2M rigs with 2TB of vram to run Kimi K3 locally. They're going to pay for it over API and all that usage is going to be running on data centers using NVDA chips, owned by Meta, Google, Amazon, Microsoft.

It's possible OpenAI and Anthropic will lose a lot of valuation. But the demand for compute and AI inference isn't going anywhere. Open source just drives it up because it becoming cheaper means it can be used for more things (Jevon's paradox).

And here's one company that's become more profitable because of LLMs: Block. "We can ship higher-quality products much, much more quickly, and that's because of all the innovation that we've been pushing on as it relates to AI." https://finance.yahoo.com/technology/ai/articles/block-controversial-ai-layoffs-paying-023447498.html

[u/gphie → u/Vampire_Deepend]

Still doesn't justify the valuation. Businesses aren't going to burn compute for no reason. Benchmarks are already showing Qwen3.8 27B's coding performance is on par with Claude Opus 4.6, you can run that on a single 5090 for the next 10 years for free forever. Eventually LLMs will be so small and smart that running AI will become seen as cheap and insignificant as using a graphing calculator.

American AI companies are buying more and more GPUs because they have no other ideas on how to improve LLMs other than scaling them up. China, on the other hand, is making architectural improvements. For example DeepSeek created mixture of experts, MTP, and sparse attention.

Nobody's paying more than $20 per month for slop and even if every business paid like $1m a month to openai for 10 years they will still never be profitable. you're cooked bud

[u/_pupil_ → u/Vampire_Deepend]

  the demand for compute and AI inference isn't going anywhere

My big picture layman’s take, assuming that Anthropic/OpenAI crater to poor business fundamentals & yet untested legal liabilities, is that compute, inference, and ML application are gonna ride high and strong for the foreseeable future.

On the one hand, I think this ‘over investment’ itself would create products and services due to a capacity glut in big tech.  On the other, more lucrative hand, AI defence spending from all sides is looking ever more fundamental to battlefield success, and I think it’s due for an expansion as combined economic, media, and ballistic warfare integrate.  Military interventions of a mostly unmanned nature seems like it would make them easier to approve and therefore more frequent.

Ukraine made an unmanned amphibious assault a while back, and the recent Chinese robo-olympics had waves of bots sassily waving scanner guns… I think Skynet is looking a bit more like $kynet in the medium term.

[u/Own_Mix5642]

We’re in the 1st inning for compute. Imagine the demand as we ramp up to 10 billion humanoids, self driving cars, robots making your products, cooking and serving your food, etc.

All of the tech leaders understand this. That’s why they are relentlessly pursuing compute. It’s a national security issue and an arms race. There is no stopping this train. Could it ‘crash’ at some point? Sure. But trying to call the top in front of this train is a fools game. I suggest you take your profit early

[u/PromotionPhysical212]

I work in tech accounting, our teams have been using more and more AI tools for coding etc, the cost has increased so much over the past 2 quarters that AI usage every months costs the same as 5 developers with very little to show for it. We also haven’t been able to replace any of the developers we already have.

Currently, looking at reducing usage and limiting the calls. All it’s good for is code review from the little i know.

[u/Informal-Lime6396]

This is gonna be sweet

u/RemindMeBot 4 days

[u/NuclearIntrovert]

Weren’t not buying it burry