The Ultimate Guide to Long Term Investing
It's not a great sign--for the company or the market-- when a company that’s booked a $1 trillion in deals (while still managing to lose $11.5 billion) is talking about a pre-emptive bailout.
Saturday, November 8th, 2025
Laramie, Wyoming
By Dan Denning
Recently I emptied an old storage unit in Colorado. Almost all the boxes are books…from college…from Santa Fe and Baltimore…even books I shipped back to America from Australia and London. I’d say too many books, but I’m not sure you can have too many.
It paid off with a copy of a book I forgot I had. It will come in useful today, as we try to understand whether the investment boom in AI is a massive mis-allocation of capital. If it is, then the market value of America’s biggest tech firms will be marked down significantly. In laymen’s terms, the share prices will crash (be repriced to a level that reflects a realistic return on the investment in AI).
Or not. AI might increase productivity. It might also put millions of people out of work and create massive social and political chaos as a result. Worse, it could be used as a new form of psychological violence to control and manipulate an angry population. I’ll get to all that shortly. But let’s start with a chart.
There’s trouble in chip land. Nvidia chief Jensen Huang rattled investors earlier in the week when he said China is ‘nanoseconds’ behind the US in AI development. He said China has cheaper energy costs and explicit backing from the government. To me, it implied he would like more explicit support from Uncle Sam.
This was not long after Open AI CEO Sam Altman made public comments suggesting that the US government ought to guarantee the debt of his company or other US-backed AI companies. Not a great sign when a company that’s booked a $1 trillion in deals (while still managing to lose $11.5 billion) is talking about a pre-emptive bailout. It suggests…problems…with the business model, or with the commercial viability of the technology…or the wisdom of all the money invested so far.
Nvidia’s chart is not exactly breaking down. But from its peak of over $5 trillion in market value, it lost $500 billion in the blink of an eye. Five hundred billion dollars used to be a lot of money. It still is, actually. To put that in perspective, there are only seventeen US companies with a market value greater than $500 billion. For, Nvidia, it was an 11% decline.
The AI boom began in October of 2022. US stocks have added about $25 trillion in market value since then–up 60% to nearly $70 trillion. Stocks are priced for a future that is unbelievably positive. But if it’s anything other than a technological revolution–it will be impossible for most investors to make money over the next ten years. Don’t take my word for it. Look at the chart below.