The AI Bubble in View of the End Times :: By Todd Strandberg

We have had artificial intelligence (AI) software for several decades. What is new about this technology is that computers can now create text, images, and videos that previously could only be the product of the human mind.

I’ve had a few conversations with AI on the site Poe.com. It quickly became clear that I was communicating with a machine. When I asked AI to explain its own popularity, I received a long-winded technological answer. I then asked for a more basic summary and got this:

“AI algorithms and models have become more accurate in tasks such as image recognition, language translation, and voice recognition. This means that AI systems are better at understanding and interpreting data.”

AI can compile data in a fraction of a second, but it often lacks common sense. In the first week of February, I found an article on Yahoo News about all the celebrities who died in 2024. There were eight of them. Normally, these types of write-ups are only written in late November or December. AI decides that it has enough dead people to write an average-length news story.

Wall Street has become very impressed by AI stocks. Many of them have seen massive increases in their valuation.

Stock bubbles are a regular occurrence on Wall Street. We recently had a group of pot stocks that reached cosmic levels and then crashed back down to earth. The market capitalization for the top cannabis companies in the U.S. currently ranges from $820 million to $4.04 billion dollars.

When Tilray Brands went public, its stock was worth $100 billion. Its present net value is at $3.4 billion. Canopy Growth Corporation once traded at $535 per share; it now trades at $3. Aurora Cannabis peaked at $115, and it now sells at 38 cents.

I could not find a single cannabis company that is making any money. Because of high state taxes, it’s much cheaper to buy pot that was smuggled in from Mexico.

The collapse of the cannabis stocks was a modest-scale occurrence, so their downfall had no real impact on the general economy. A crash in AI stocks would be a major event. Over the past three years, around $10 trillion has been added to stock valuations based on AI hype.

Microsoft is a company that is into many business fields. When it said it was working on AI, its stock went from $1 to $3 trillion. The king daddy of AI stocks is Nvidia. It has gone from a few billion dollars to nearly $2 trillion. The chip company ARM simply said it has a working relationship with Nvidia, and its stock doubled in three trading days. ARM has an insane 1,600 price-to-earnings ratio.

The leader in AI software is the privately held company OpenAI, which created the popular program ChatGDP. The CEO of the firm Sam Altman has lofty goals of building an empire worth $5 to $7 trillion. According to SEC filings, OpenAI has a current valuation of $80 billion based on the sale of holdings by insiders. Once it becomes a public company, speculators can bid up the stock price to the moon.

Because chip and software firms often go through feast and famine cycles, it is incredibly unwise to bid any of these stocks up to such nose-bleed levels. There is no certainty that AI is going to be a cash cow for earnings.

At the peak of the Dot-com bubble, Cisco Systems was worth $500 billion because it was making huge profits on corporations buying its routers to join the internet craze. Once everyone had the equipment to host their own domain, Cisco’s sales went into a sharp decline. Over two decades later, the company is only worth half of its 2000 high.

Intel is the largest chip maker in the world. Because it was late to the AI game, it only has a valuation of $183 billion. When Tesla reached the point where it was worth more than all other car makers on the planet, I was not surprised by the recent stock price correction. Since Intel’s net sales are greater than all AI stocks combined, the general rule of financial gravity calls for a similar price correction.

The government gets a huge amount of money from the sale of stock. If someone sells shares worth $10 million, at least $3 million will go to pay capital gains. If a stock market meltdown was to take place, the federal deficit would explode.

If we were living in normal financial times, it would be logical for me to predict that the AI bubble will go the way of all other major bubbles. Because Jesus said that the days before the rapture would be a time of tranquility, we’ve struck several monetary landmines with no impact. Since my only focus is on something that would trigger the rapture, I welcome an AI bubble that reaches $20, $40, or $60 trillion.

“But as the days of Noah were, so shall also the coming of the Son of man be. For as in the days that were before the flood they were eating and drinking, marrying and giving in marriage, until the day that Noe entered into the ark, And knew not until the flood came, and took them all away; so shall also the coming of the Son of man be” (Matthew 24:37-39).

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