The AI bubble has burst in China. AI tech stocks were 42% of China’s market capitalization. And the crash is on in China. This is why Anthropic is trying to get their IPO done – to steal from people who don’t know any better.
In the US, AI-linked and core tech stocks account for roughly 42% to 62% of the S&P 500’s total market capitalization, depending on the scope of companies included:
• Core AI-Linked Companies: A broad analysis of 218 AI-associated companies represents 62.04% ($42.39 trillion) of the S&P 500’s total market value.
• Core Software, Chips & Infrastructure: A tighter group of 58 direct AI-building companies (chips, models, software, security) accounts for 47.13% of the index weight.
• AI Big 10 / Megacaps: The top 10 largest AI and tech-related companies account for approximately 42% of the total U.S. stock market capitalization.
So just 10 of S&P AI companies are 42% of total US stock market capitalization. JUST 10! That’s as much percentage wise as the entire Chinese market!
And if you go broader, including Amazon, Google, and other cloud service companies heavily investing in AI, the market capitalization reached 62%!!!
This is going to crash and crash hard. Amazon, Alphabet (formerly Google), and Microsoft are going to take huge losses but they still have a base business underneath the AI bubble so they can potentially recover. But Anthropic? OpenAI? Databricks? Palantir? They’re going to collapse. So is SpaceX, which is primarily an AI company now, not a space company.
This is also why Musk is “giving away” shares of SpaceX – because it’s going to crash too. But by giving away these shares in “Trump accounts”, the shares are locked in for 5 years at current prices. By the time the shares can be sold, they’ll be worthless. Meanwhile, Musk gets a tax break for his “philanthropy”.
The potential bottom for the DJIA is clear down somewhere near 20,000. Today it is at 52,377. 60% of that is 30,000 points. The DJIA is carrying the potential to collapse by 30,000 points.
The collapse won’t happen in one fell swoop. It will take time, but once the bottom falls out and AI, which is still not profitable after 7 years even at extremely high per seat subscription prices, is going to be seen as the con man bust that it is.
No wonder Donald Trump is so big on AI. It’s a total con, right up his alley.
