The Notorious “AI Bubble”, Why It is Likely Not What Many Think, Yet Can Still Be A Slippery Slope

Everyone is talking about the fabled “AI Bubble” but I see a much different problem all together. Here’s what I see in phases. Just my DD.

Phase 1: AI demand will keep exploding for years, like a river that keeps widening no matter how many dams you build. Look at the Micron news recently, or the Genesis Executive Order. The ruling class and the stock market will surf the early AI wave, even if the economy is doing crap (it is).

Phase 2: Job cuts are more apparent as college grads already can’t get entry level jobs. Right now, AI layoffs feel like cutting “cost fat,” but if they keep going, you’re actually sawing into the bone that keeps the body alive. Who is going to buy shit from Amazon when they are broke? Who will buy a house when they can’t establish credit or a down payment? You see how this trickles?

Phase 3: Structural unemployment doesn’t bounce back… AI is on track to genuinely replace occupations in many industries. I’m talking entry level positions in finance, HR, hospitality, etc, etc. Once AI can reliably handle tasks like entry-level coding, customer support, basic analysis, HR screening, or content production, companies redesign workflows around machines instead of humans, so those roles don’t come back in the same numbers or at the same pay. Over time, this creates a gap: a huge pool of workers trained for jobs that no longer exist, while new AI-era jobs (prompt engineers, system architects, AI ops, etc.) require skills, credentials, or geography that many of them don’t have. What bailout can the Fed provide if we happen to have thousands of graduates in debt that also don’t have a career option in their major?

*This is kind of a doomer post, so I want to reiterate I may be and hopefully am wrong. I hope this country can thrive, but I think this AI revolution upon us will have some sour aftertastes coming.