Simple Known Dangers with AI, and Possible Future Dangers Too.

[ssfc72]

Thanks for the link to the article Buster.
I am surprised the AI didn't try to cancel some existing reservation, in order to place it's own reservation. :-)

[buster]

Jason commented he thought the AI froth might stop any day, and today a few have decided it's going to, and not for moral or fear reasons, but because of simple monetary reasons, and have withdrawn money from the AI stocks.

The physical nature of AI requires graphics chips (and other types), storage, and ample electricity. We can maybe leave out for now transportation, clean water, and designers, as well as buildings and some staff.

To build the AI stations and it's needed infrastructure requires trillions of dollars of borrowed money. Trillions. And then the contracts are created and the users gradually pay off the loans. Sounds foolproof. Easy money.

However.

Some companies may not go whole hog and may just dip a few toes in to see if it suits them. And if their contract is 3 years, they may go somewhere else cheaper or better after the contract expires.

Inflation in the USA has kept moving up and lending rates are expected to be raised again in December. USA bond prices range from about 4.75 to 5.25 %. So AI borrowers need to pay back the principal (like trillions?) plus the interest on the principal which will grow each year unless the interest is paid down smartly.

Businesses will want to see results for paying for AI.

A hint of what might happen has taken place on the markets during the last few days. AI stocks, like AMD and Nvidia, have lost value. Some major investors have sold all these stocks. Nothing drastic has happened, but it has been commented upon, which you will notice if you check the market sites each morning and evening.

This is not a prediction, but an expansion on Jason's comment on a cultural turn.

[buster]

Continuing yesterday's post. This quote is from a summary analysis after markets closed today:

"• Semiconductors & Chipmakers: Major players like Nvidia, AMD, and Intel have faced multi-day slides following hotter-than-expected U.S. producer and consumer price inflation reports that shift Federal Reserve rate-cut expectations.
• Sector Rotation: While AI and tech indexes face pressure, investors have shifted capital toward defensive areas like healthcare and traditional value stocks."

[Jason]

I find it fascinating how people's whims can drag down entire economies, even when driven by bad information or the bandwagon effect. I'm taking Sociology this term, which certainly could study this group behaviour, and likely already does.

[buster]

Bit of a sell off today for what is known as "AI stocks" like AMD falling about 5%. Seems to be a worry that borrowing costs will not be covered by revenue, and so chip maker's profits will also suffer, and anyone tangentially connected economically to the expected cash-cow AI. 

But that could all change tomorrow.

[Jason]

Akin & Akin (2026) discuss stock market behaviour. From the abstract:

"The findings reveal several significant correlations: rising real interest rates negatively affect stocks due to loss aversion and sentiment. Conversely, higher consumer confidence tends to positively influence the stock market, driven by herding behavior and optimism. Additionally, market volatility shows a negative correlation with the S&P 500, influenced by risk aversion, recency bias and herding behavior. Moreover, an increase in credit default swap rates leads to stock market declines, primarily influenced by risk perception, loss aversion and herding behavior."

References
Akin, I., & Akin, M. (2026). Behavioral finance impacts on US stock market volatility: an analysis of market anomalies. Behavioural Public Policy, 10(2), 337–361. https://www.cambridge.org/core/journals/behavioural-public-policy/article/behavioral-finance-impacts-on-us-stock-market-volatility-an-analysis-of-market-anomalies/D1CEF34141D03D8BECB2AE42467166B3

[buster]

Microsoft buying out 60,000 employees. AI seems to be the culprit, either in diversion of cash, or 'efficiencies'.

[Jason]

Microsoft buying out 60,000 employees. AI seems to be the culprit, either in diversion of cash, or 'efficiencies'.

I guess at least they're actually buying them out, and not just laying them off. I expect the quality of everything will suffer as we alpha-test all the new crap AI makes. I know somebody who had a great atheist live video stream on YouTube, and then he used Vibe (it generates code based on descriptions of what you want) to set up new streaming features, and we all suffered through watching the feed drop out repeatedly to add all these new features. I expect they'll hire (or try to) back some software developers to fix everything AI breaks. Or they'll just make us put up with lowered quality.

[buster]

AI influenced stocks moving down today, but it's only 1:30, though many stock players don't like holding 'dangerous' stocks over a weekend, so may convert to cash as a safety measure.

Copied this Friday afternoon:

"Worries are rising about whether all those hundreds of billions of dollars will produce enough profit and productivity to make the investment worth it. At the same time, stocks of computer chip companies and other winners from the frenzy to build AI data centers have come under pressure on concerns that high interest rates may slow the further build out of data centers.

"We're moving out of the hopes and dreams phase of the AI trade and into the 'show me' phase," said Joe Tigay, portfolio manager at Equity Armor Investments, in a note to investors.

A drop of 4.7 per cent for the stock price of Nvidia, whose chips have made it the poster child of the AI frenzy, was the heaviest force pulling the S&P 500 downward, even more than Intel."

[buster]

15 minutes have gone by. Intel has dropped over 30%, but it's the worst.

[buster]

Somewhere I have written about the world being too complex for us to fix or control. So I was drawn to the news article about some of Microsoft being down, and not being fixed with their first attempt. Apparently Australia is being hard hit, and it's a world wide communications problem. It seems to involve business communications so should be easy to find with a search.

And the second thing is the Nvidia scandal that emphasizes that no matter what the consequences, men and women seem to end up in bed together. This story has the added twist that one of the copulators may be a spy, but even if this is not the case, it seems to this old wise man that fraternizing with fellow workers in this intimate way should not be surprising or 'dreadful' unless coercion is involved.

There used to be a song called 'Give Me the Simple Life', written in 1945. Those days are long gone.

[ssfc72]

Yes, my Hotmail (Microsoft email) was down yesterday. Could not log in to see my email.
Apparently Microsoft is still down today. Lots of businesses using their email are having outages with their services.

[buster]

And there may be more severe repercussions from the Microsoft glich Bill, though it could be something else. This from CTV news:

"All flights in the United States are grounded due to "extraordinary circumstances," the U.S. Federal Aviation Administration (FAA) announced Friday.

The FAA issued the ground stop after a "communication issue" impacting all U.S. Air Route Traffic Control Centers," U.S. Transport Secretary Sean Duffy said in a social media post.

This is the first nationwide ground stop since January 2023 when a key FAA computer system malfunctioned. Before that the last time had been after the Sept. 11, 2001, attacks."

[buster]

The airport problem has been confirmed not to be related to the Microsoft problem.

However this appeared on the CBC page:

"Experts have told CBC News the outage highlights an over reliance on a small group of technology firms worldwide."

As the number of options keeps getting smaller, we will end eventually with only one: Big Brother. (1984)

[buster]

And finally, I hope:

Because Trent University utilizes Microsoft 365 for student and staff email and digital tools (having transitioned student mailboxes to Microsoft Outlook), the service disruption impacted the ability to log in or access campus email, Teams, and related Microsoft applications.