“It’s not gonna be one Bear Stearns moment,” Zitron explained. “It’s gonna be a succession of events until the markets freak out.”
The crux of the problem, according to Zitron, is Nvidia. The chip maker’s stock represents 7 to 8 percent of the S&P 500’s value, and the broader market has become dependent on Nvidia’s continued hyper growth. When Nvidia posted “only” 55 percent year-over-year growth in January, the market wobbled.
“NVIDIA’s growth is why the bubble is inflated,” Zitron said. “If their growth goes down, the bubble will burst.”
He also warned of broader consequences: “I think there’s a depression coming. I think once the markets work out that tech doesn’t grow forever, they’re gonna flush the toilet aggressively on Silicon Valley.” This connects to his larger thesis: that the tech industry has run out of genuine hyper-growth opportunities and is trying to manufacture one with AI.
“Is there anything that would falsify your premise of this bubble and crash happening,” I asked. “What if you’re wrong?”
“I’ve been answering ‘What if you’re wrong?’ for a year-and-a-half to two years, so I’m not bothered by that question, so the thing that would have to prove me right would’ve already needed to happen,” he said. Amid a longer exposition about Sam Altman, Zitron said, “The thing that would’ve had to happen with inference would’ve had to be… it would have to be hundredths of a cent per million tokens, they would have to be printing money, and then, it would have to be way more useful. It would have to have efficacy that it does not have, the hallucination problems… would have to be fixable, and on top of this, someone would have to fix agents.”
A positivity challenge
Near the end of our conversation, I wondered if I could flip the script, so to speak, and see if he could say something positive or optimistic, although I chose the most challenging subject possible for him. “What’s the best thing about Sam Altman,” I asked. “Can you say anything nice about him at all?”
“I understand why you’re asking this,” Zitron started, “but I wanna be clear: Sam Altman is going to be the reason the markets take a crap. Sam Altman has lied to everyone, Sam Altman has been lying forever.” He continued, “Like the Pied Piper, he’s led the markets into an abyss, and yes, people should have known better, but I hope at the end of this, Sam Altman is seen for what he is, which is a con artist and a very successful one.”
Then he added, “You know what? I’ll say something nice about him, he’s really good at making people say, ‘Yes.'”
