The AI Bubble is looming.

But it isn’t global – it is quite specific to those companies which are debt-heavy, and non-revenue producing.

American companies. Historically, when the Bubble bursts, the crash is out of reach for protection.

It moves in hyper-speed. And it takes down every associated company with which it does business.

The US always overplays its hand – China does not.

Thus the Bubble may inflict on China like a needle but it will inflict pain on the West like a five ton brick.

In the US AI valuation on the markets is $27 trillion. It is estimated that it will cost companies $1.6 trillion annually as capital maintenance expenditures.

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Where will this come from is the speculation driving the Bubble toward collapse.

States and the federal government have already provided data centers with all sorts of subsidies including no property tax, deferred or avoided state taxes, federal tax write offs and access to discounted bulk rates for water. Still, they produce bare to no revenue. It is like R&D without a timeframe attached.

What happens to the US economy if and when the AI Bubble bursts? Who holds the AI debt? Morgan Stanley, Goldman Sachs and JP Morgan currently hold the most AI debt. Upwards of $3+ trillion. The tangible asset connected to the debt is data centers, which in a bubble bust would be worthless overnight.

Trump would look for bank and corporate bailouts which would mean artificial pandemic money with his face smooshed on the bills to the tune of $27 trillion. America would spiral like a massive tornado sucking up everything in its path while spitting it out broken and dead. Bank runs. Foreclosures.

The AI race against China is already a joke. Americans paying for War at the behest of Israel has fractured our entire economy into one basket. In an AI Bubble, the outcome would be a fully broken government and one ginormous angry mob of taxpayers left without jobs, food, or the means to pay for their homes. Another cycle – always larger than the last Recession/Depression sprinkled with fake statistics, fake assets, and fake people running the greatest circus on earth.

In every Burst Bubble – cash is cow. Debt is death.

Banks don’t care if there is a recession – you still have to pay your mortgage and property taxes or you lose everything you have worked for. Gold and silver in small increments is advisable. Hoarding essentials that don’t expire anytime soon is preferred. Re-evaluating your investments is essential if your advisor is savvy.

Being prepared is a form of art of war. And America will be at war with itself if the AI Bubble bursts.

Ten days ago, OpenAI reported that two of its AI models went rogue and hacked into another company. In other words they were no longer ‘controllable.’ Putting kill switches in AI has been hacked. AI is now smarter than its programmer. What could go wrong? Programmers think they can fix this growing anomaly by putting exemptions into AI such as ‘don’t cheat’ or ‘care for your actions’…  Really. It is laughable and yet it is incredibly ignorant.

Meanwhile our devout intel agencies are busily working out if they can go to war with Russia and bring criminal charges against Tucker Carlson for not registering under FARA. These idiotic notions take precedent because no one knows how to detach from the military war machine without looking weak. Appearances. Trump now demands a full surrender from Iran or he will blow them into the stratosphere… With what weapons? Weapons require AI chips. And Lockheed Martin says they are out-of-stock until further notice.

According to Jim Rickards, a lawyer and investment banker, the AI Bubble is following the same magic wand of the failed DotCom industry – circular money. Manufacturing fake AI demand. Taking cash and lending it to shells or legitimate companies who turn around and use the money to buy the company’s product while labeling it as revenue. The source of the revenue was ‘the other pocket.’ 

One such DotCom company was Worldcom based in Denver. My friend and neighbor worked there as an attorney. Every dime he had went back to buying stock in the company – until it died and people lost life savings. He went from having a great job and $2+ million in savings – to no job – broke and a family of 6 to support.   

Heavy venture capital money began flowing into AI in late 2022.  Like DotCom, the revenue was vacant but sure to follow given hype, marketing and propaganda. Basically these Bubbles follow snake oil salesmen pitches. Only to find the product is worth 10 cents on the dollar. And Bubbles always burst eventually. Given the data center hype, the outstanding debt, the hacks, the rogues, and programmers incapable of controlling something that could literally destroy civilization – I would venture AI is another moon landing. All Hollywood – and the theatre is empty.

China is leading the world in AI.

Even CSIS admits America has lost the race.

China has 369 data centers.

The US now has 4,400 and continues to build them with the hype that more means we dominate in AI.

By more than tenfold. Each one adds to more debt. No Revenue. Taxpayers are picking up the offshore costs such as water, electricity, property taxes, land values, and noise.

When the Bubble Bursts – Trump will bail them out with our tax dollars. A purposeful game of the Magician. Using Kabbalah as his Ouija board. Poof the magic dragon…

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Helena Glass is Former CPA & Series 7, with emphasis in Real Estate and Financial Planning. Two brains in one: former Bronze Sculpter and Danseuse. Visit the author’s blog. 

She is a regular contributor to Global Research.

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