The Case for a Soft Landing

What if the AI Bubble doesn't burst, but instead comes in for a soft landing? Consider:

The stock market has taken to punishing companies for their AI spend, and rewarding those who pull back. Stock price incentives have fueled much of the hyperscalers behavior thus far, and could work again here.

The recent reverse psychology marketing about AI becoming Skynet could be quickly repurposed into an excuse to pull back on capex under the guise of safety. The public backlash against Data Centers could also be used as a smoke screen for a halt, as could memory and component shortages.

Meta,, Google, Amazon and Microsoft all make tremendous profit on their legacy businesses. If they pulled the plug on their AI efforts, they could just write the lost investment off their taxes. Meta just recently did this with the Metaverse.

Rather than fail spectacularly, taking pension plans with them, Open AI and Anthropic could just quietly get bought up by M, G, A or MS, in the hallowed tradition of software startups. The buyer would pay off some of their fiercest creditors, give stock to the second-most-fierce, and stiff the rest.

There really isn't as much financial contagion this time as in 2008. This would be more akin to 1999, which was just a blimp on the average American's radar. Some people lost a lot on money. The average American was unaffected.

Lastly, Ed and other's diligent reporting on this, along with the SpaceX stock cratering, has taken an Open AI and Anthropic IPO off the table for this year most likely. The AI bubble is almost as widely discussed as the "Singularity" or other such hype. This should help to contain the explosion to mostly those who deserve to be blown up.