Episode 28: AI Bubble vs. Bitcoin Drop: Is the Market in Extreme Fear?

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Hey everyone, welcome to Social Ledger Report. This is J.R., founder and CEO of

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Social Market. And my name is Leon Hitchens. I’m the

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chief, we’ll get that one right one day. The chief marketing officer here at

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Social Market. Yeah. And this is Social Ed Report, uh,

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episode 28. So, welcome to another episode. We actually have quite a few

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things to talk about. I know we’ve gotten some feedback from the last few

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episodes. So, first of all, thank you all for, uh, it’s more positive. So,

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thank you all for watching. Thank you all for sticking with us this week.

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We’re actually going to talk a little bit more about the market sentiment.

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Like the AI bubble is possibly bursting. The government shutdown actually opened

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again. So, we’re going to talk about some more development stories on that.

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And then Bitcoin actually fell down 100,000. So, that’s kind of interesting.

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959 right now. 959. Wow. Yeah. So, 9,000 95,900. Um,

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and then Sam Otman is possibly asking the government for a Bella, which I have

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mixed feelings on. In principle, I don’t agree with it, but we’ll talk more about

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that here in a moment. But before we continue, uh, just to stop you there,

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make sure to like the video if you like it, subscribe if you want to follow

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these kind of episodes, these kind of, uh, content that we’re delivering for

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you, dislike if you dislike it, just let us know what you think overall. But with

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that being said, um we’ve actually been doing some development on the app. A lot

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of development I should say. And we’ve talked to some customers that have

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expressed like, “Hey, this is like GTA 6, you know, it’s taking so goddamn long

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to release this. Like, what’s happening?” And I’m like, “Dude, we’re

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literally rehauling, overhauling the entire thing.” Anyway, so uh this is me

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going through the app right now. So, I’m going to log in, which if you’ve seen

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past episodes, you would see that you could just kind of access the app and be

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thrown into the market section. But now you’re thrown into the wallet section.

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And this is one of my personal wallets, by the way. So, um, just don’t take my

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money. So, if we go into the market Oh, you got some world coin in there. I

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love that. I do. I have a lot more. This is kind of

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like me playing with it. Uh, my personal account.

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Okay, so let me be clear. This is my developer personal account, which is

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separate from my main personal account, which is where I have like I have at

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least 200 World Coin, but um that’s just me putting my money there. Man, we

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should probably for future reference talk about like this is where we’re

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putting our money. Like I have 200 World Coin. I can I wouldn’t mind showing you

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guys what my personal bags are. And I don’t know if you would feel the same,

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Leon, but just to show you all like this is our investment strategy. It’s not the

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most extravagant. It’s not like Wall Street level, but this is how we make

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money and maybe you can like learn a thing or two.

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So, I’m down. But honestly, most of mine’s

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pretty pretty basic. So, down to show it.

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So, side note, tomorrow in as of recording this video, November 17th,

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Monad is releasing its layer 1 Ethereum based. Well, it’s layer 1, but it’s kind

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of interesting. Most layer twos are Ethereum based, but this is supposed to

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be Ethereum based as another layer 1, which is really interesting. So, I’m

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actually putting a lot of money there and um you guys should check it out. Uh

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not investment advice, right? So, you go into the markets page and this is where

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you can kind of see everything. I’m running this as a local instance right

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now. So, this is not available yet. It will be available tomorrow, November

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17th. Anyways, so this is the market overview here. And yeah, dude. Temp

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extreme fear right now. I wonder why. And it’s still Bitcoin season.

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Inflation’s at three. Yeah, like

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it it ties all to this government shutdown. So liquidity is what’s exiting

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the market right now. Um I’ve got somewhat of a highle overview of this.

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I’m, you know, not an economist. I I I did do some shorts on Bitcoin when the

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government shut down. Really? Um, yes, not a ton. Um, just a

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little bit playing with it. I it paid off. Um, I’m doing some some um calls

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right now. I think, you know, essentially I think Bitcoin and all this

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is going to go up. However, market sentiment matters more than what’s

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actually happening and and that fear and greed index super important like

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essentially and this is my understanding on it Jr. is um we had like essentially

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potential growth. Government shut down so stuff wasn’t getting approved, things

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weren’t moving forward. And then oftent times when government shut down all

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that, people go to safe assets. Gold is an example of that. Um

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you also have like TGA trains. You’ve got, you know, rate cuts coming. There’s

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ETF approvals all all in the the push, but everybody kind of hit that under

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100K and that fear is what what drives it. If the market sentiment is that

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things are not going well, then things are just not going to go well. That’s

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generally how it how it works in the end. And the other part that I think is

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playing a big part of it is perpetual, you know, per like the ability to bet on

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one side of the market. The more pressure you have on shorts, the more

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that, you know, this this market’s going to go go down. I don’t think that people

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are going to keep shorting this. Like you could short it, you know, maybe it

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hits 90,000. Um, but like you’re only going to make a few extra thousand

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unless you’re leveraging really high. And if you’re leveraging really high and

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and you’re going like that, you you have to know something’s happening and I

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don’t know if something’s happening. Uh it’s like, you know, right there,

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Microsoft strategy, you know, they’re still buying Bitcoin

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strategy. Yeah. So,

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let’s talk about strategy actually. Where where does that feed from?

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Where does that feed from that is still called Micro Strategy?

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Uh Trading View. Uh a [ __ ] Well, I can click on it, I

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think, but I’m just curious if um

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Damn it. So, it broke on me here on live. That’s kind of

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because you’re on local. I am on local actually, so that’s why.

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But um it’s pulling all that data from Trading View, which is publicly

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available. Anyone can use it. But I just wonder if they haven’t changed

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their name on there or what what’s the

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Yeah, why they have the new logo. Look, here it

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is. So, Micro Strategy right below $200 their stock. But yeah, I mean it’s it

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doesn’t work on my local. It should work on actual production app.

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So, I just looked it up. I wonder if it’s because the ticker is still MSTR

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and that’s a good point, dude. Wow. That’s the reason I was just more than

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anything curious um out there. Yeah. Yeah, that’s a good point. Um

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wait, so I’m a little conflicted. Damn, I’m seeing all the discrepancies

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here in the app now that I’m developing it and I’m kind of embarrassed, but

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screw it. We’re going to roll with it. So, um, Bitcoin

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and Micro Strategy, they kind of overlap, right? So, let’s talk about

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Bitcoin. It’s according to this 93,941. How bad how here’s my question, Leon.

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How bad are your bags impacted? Are you like

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most of my stuff is in the core ones? my I’m mainly in Bitcoin, Ethereum,

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and um a little bit in Salana, you know, just cuz I I cashed out of Litecoin

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thinking Litecoin was going to, you know, do something at some point. But

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this is this is very interesting, dude. Market activity shows a lot of

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[ __ ] are selling. Some are buying. Some are buying like a

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large amount, like $1,410 like not that long ago. This only pulls

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most recent data. A lot of them are buying in I mean it’s kind of a mixed

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thing. I would just buy, dude. This is probably

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like I don’t want people to think I’m telling you what to do when it comes to

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this stuff, but like I’m I’m going to be buying Bitcoin

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recently just because I mean anything below 100,000 I think

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it’s it’s affordable. Even Michael Sailor himself says buy Bitcoin. But I

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don’t want to be that guy. I don’t want to be known as that guy. I want to be

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known as the guy who is like transparent.

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Yeah. I think so. What all the analysts are saying right now is it’s going to

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hit probably a bottom of 84K. Um

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Okay. I think in the long haul what most

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people should be doing like don’t go [ __ ] mortgage your take a second

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mortgage on your house and dump you know money into it. But right

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take some cost averaging. Right now is a prime opportunity. You got an extra 5k

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that you were like I was going to invest. Buy some Bitcoin. Like I think

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on the long term Bitcoin is gonna do really well. I don’t know if it’s going

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to be a million dollars. I still like I still don’t know if I believe

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that. I also don’t know if I believed 100K back in the day. Like I I think I

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was a little skeptical on all this. But I think on on the part of it, it’s going

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to keep growing. It’s it’s only going to get more rare. it’s only going to get

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harder to compute um without you know some government intervention like I

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think this is going to go go up um you know they’re talking right now about

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zero tax on crypto companies like there’s so many things that could push

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for this I think just you know you’ve got a market sentiment and a selloff

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that’s happening at some point Micro Strategy Strategy is

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going to have to liquidate their crypto too like I don’t know what their bottom

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or their their mark price is I think they bought on March margin and equity.

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And if that equity, you know, if it’s equity, I bet you that they probably

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have to be at like 30 40,000 a coin to to have to liquidate. So, they might be

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safe. But man, some of these other ones out there, I wonder if companies bought

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on margins or bought on loans and like essentially if you lend out on Bitcoin

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at some point like all these loans on Coinbase are going to be margin called

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and you’re going have to you won’t have enough to pay the interest. you’re going

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to have to liquidate and that could be a bigger problem for the market.

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Yeah. So, we were going to talk about Micro

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Strategy here in a moment, but I think it was good to kind of set the the

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precedent with Bitcoin in mind because we all I don’t know if everyone knows

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like you, the audience, but strategy by Michael Sailor is really just aping

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Bitcoin. It’s kind of like some crypto bros on Twitter saying like, “Hey dude,

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let’s just buy this crypto and then make it a whole entire business.” I don’t

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know what strategy was or micro strategy was before Bitcoin, right? I don’t have

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that familiarity and and a lot of people might not know either just because they

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came to the front of the stage by saying, “Hey, yeah, we’re buying

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Bitcoin. That’s our entire strategy.” Um, but I asked Grock like what’s the

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whole thing happening right now with Micro Strategy Strategy’s position now

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that it fell down 100,000 because as you may already know Strategy and a lot of

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crypto companies bought Bitcoin when it was on the top. So it’s down not

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massively but it’s still down and the fears according to the index of fear and

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greed if you look here in the markets it’s possibly going to go down even

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further you know just because people are going to continue to sell. So I asked

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Grock about it and it says Micro Strategy’s aggressive Bitcoin

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accumulation was a hot topic which again we already said that with updates on

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purchases holding reachings about or its holdings reaching over 640,000 bitcoins

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3% of the entire goddamn supply and strategies like preferred stock issuance

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for funding postclarified not selling despite wallet moves with yields at 26.1

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year to date and potentially for more buys. So, I mean, it makes sense. They

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haven’t taken a a huge loss, it seems, because they’ve been buying Bitcoin for

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a a while now. Even year to date, it’s up at 26%. Yeah. So, strategy Bitcoin

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position, it’s kind of interesting. Um, I don’t know what else to talk about

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that. I don’t know if you have any other thoughts on that.

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No, I more than anything, I’m worried where Bitcoin goes. Like this could be a

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pivotable moment for what the United States is doing for crypto. Like maybe

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Bitcoin doesn’t become like the great the greatest. But also like this could

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just be a price correction. Like maybe Bitcoin never was meant to be at that

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price, you know, like this could be a market correction on where the sentiment

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is right now. Like maybe we hover around 90 to 100K for for you know a few years

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just like what Bitcoin did in the past. It went

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all the way to what 50 60 grand back in the day and then dropped down to 20 and

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stood at 20 forever. You know, like right

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we could see something like that happening right now. Maybe 100K wasn’t

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wasn’t where the price needed to hold and you know we could have a a sliding

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scale, you know, over the next couple of years and then all of a sudden it goes

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to 200K. Um I think that’s more possible than Bitcoin going low and staying low

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for forever. um money is getting pushed into it. I think liquidity after it hits

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with the government shutdown, it’s going to take a little bit of time, but there

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is a chart on X and I did I send that to you?

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Okay. I don’t think so. Um

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no, I didn’t get it. You may want to pull it out for us.

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Find it. So, this is what I what I what I saw out there is the last two times

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the government shutdown ended, Bitcoin ripped 700 and 300%.

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This is a possibility that could happen. Like history repeats itself often. Um,

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we’re right right here, you know, every time liquidity exit the market. And hey,

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man, if we get STEMI checks, like most people below $100,000 could get a a

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stimulus check. Um, I don’t I don’t know if if I’ll qualify in there. Like I hope

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that there’s a higher limit for married married uh couples. Um, but if I get a

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Steammy check, it’s going straight into crypto again. Like I could also see that

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happen with a ton of people. So if if the government, you know, the government

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gets back to the normaly, doesn’t invade Venezuela or, you know, start some other

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crazy thing happens in the world, um, I could see Bitcoin flying. Um, I could

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also just see Micro Strategy using this as an opportunity and buying a [ __ ] ton

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more crypto and knowing something that none of us know. Um, but it’s kind of

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yet to be seen. like this this crash is happening over the weekend. So, it it’s

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an interesting part, but I I believe this chart

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is a history repeats itself moment. You know, in some instances, I think the

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and this is the tricky part. Crypto markets are open every day of the week

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and stock markets are only open uh during the week. So, what I’ve noticed

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is sometimes um just ETFs, indexes, they’ll usually perform almost in

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parallel to how crypto performs. Usually, Bitcoin.

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Um I have this position. I’m following inverse Kramer index. I’m using

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Autopoly, by the way. Not an endorsement. I wish just because I

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really find the product pretty cool. Um it’s down like 10%. Uh or excuse me,

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it’s down $10, which is like a very small amount. It’s like about 1 2%. But

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you know, it’s it’s not doing too well. You know,

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I thought it would have been doing better. But,

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um, man, fear right now is every isn’t is in everyone’s mind. I think it’s

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really interesting how massive this government shutdown was. Not just for I

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mean, obviously, it’s very detrimental for the workers, and this is where I

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feel really bad for it. I know people who actually work in the airports. one I

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don’t know what the name of the position is but um you know uh one of my my

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fiance’s co-workers uh has a husband who controls air traffic I’m not sure the

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name of the position and his job was impacted because the government shut

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down I think so

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okay yeah okay so thank you so man he wasn’t getting paid for like 43 days or

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something so I think that’s how long the government shutdown was 43 days

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yeah it’s the long longest in history beat Trump’s other one like

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you know in some ways the Democrats That’s,

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you know, they might have been winning politically in some views. Uh, but, you

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know, in inevitably they they lost and caved and didn’t get what they wanted

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and like they were hurting real dude.

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Yeah. They were hurting real people to have no no win. I think you know that

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in my view they’ve lost the plot. Um, they did

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and and I think that impact’s huge. It’s not just about you know there like

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there’s a ton of people that work for the federal government. It’s the largest

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employer in the United States. There was so many people not getting paid. The US

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military wasn’t getting paid. Some police, you know, the federal government

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police weren’t weren’t getting paid. Like there there’s just I I think we’re

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going to see this market rebound and sentiment go into good into a better

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spot. I want you know Disney just stopped fighting with YouTube. Like

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there’s so many little parts here that on the macro and micro level uh YouTube

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uh and Disney weren’t weren’t you couldn’t view Disney on YouTube TV.

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Oh, I didn’t know that. Dude, first of all, [ __ ] this.

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Is that a rock? I’ve been on top of you.

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Oh, kind of. Yeah, it’s it’s pretty massive

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right now. It’s not the only massive thing. I’ll tell you that much.

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that that Bitcoin turbulence, you know, there there’s a bunch of outflows, alt

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rallies, you know, we’ve got tariffs, like there’s just so many things

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happening that it it in some ways we could be a little

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bit in the bubble hype. Like, you know, I know we wanted to talk about AI

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bubbles here, like there’s a Wall Street skepticism of crypto in some ways.

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They’re now adopting it. like this is the first time that they’re going to

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revolutionize the financial system, but it took crypto better part of 10 years

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to get here, you know, like it really did.

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It it’s been a long driver there. Trump inevitably was the one who made that

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change and what a character to bring that level of change. And the only

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reason is because they all got debanked, you know, like they they were we can’t

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have that anymore. Um, so it’s it’s no different than this AI bubble that we’re

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kind of seeing. like we’re seeing a lot of overhyped AI companies and funds

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shift, you know, shift around and and talk about it. Like I don’t know you

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want to start talking about this AI bubble like it is a style bubble in some

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ways. There’s this chart that I shared with

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you that I um it famously became popular on Twitter.

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At least that’s where I think the original

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uh post came from. Now, let me see if I can pull it out real quick. Well,

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couldn’t find it on Twitter, but I found it on Instagram. Some of you, the

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viewer, might be able to, if you’re watching this on YouTube, this is kind

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of how it looks like. But if you’re watching this on audio, let me just

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explain a little bit. So, here’s how the eye bubble has been created. You have

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literally circles, like big circles that have like all these different arrows

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pointing to another company. As far as the involvement, there’s different

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colored, you know, arrows here. Like there’s one for hardware or software,

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there’s one for investment, there’s one for services, and another one for

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venture capital or like investments. And those are just like different

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associations within every bubble or every company that is represented in the

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bubble. So, Nvidia and you know, this is probably the biggest winner here because

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it built the shovels. Um, I saw somewhere, and this is a side note, I

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saw somewhere that I think it was a YouTube video.

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While Nvidia is probably profiting the most, it’s the most profitable company

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right now in the world. It’s about 5 trillion. It says here 4.5 trillion, but

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I think this is a bit outdated. $5 trillion. It’s how much it’s worth. They

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actually put in a lot of money according to this chart. They put investment

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capital on XAI, on Figure AI, Mistral. Um and then they also gave uh kind of

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like a the most involvement here is hardware or software with open AI with

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Microsoft with um well no a lot of them are just using

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Nvidia as a software as software and hardware you know like the chips

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everything but Nvidia gives out an investment to smaller companies like in

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well Intel is not a small one but it gives it to Intel it gives it to NScale,

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OpenAI, and there’s that famous thing that happened where Nvidia proposed to

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give OpenAI a billion dollars in investment or something to that level.

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And then OpenAI came around and gave that money to AMD and then that money

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came back to Nvidia because they were buying chips. It’s a cluster [ __ ] It’s

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an inbreeding market, as I like to call it. You know, these guys are just

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sharing the same fluids, sharing the same money. It’s kind of weird, man. But

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yeah, it happens sometimes like you know obviously if if your largest buyer is a

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you know uh somebody that you work with often like investments should flow back

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and forth to you know make it make sense but this seems like just a little bit

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too much like yep

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what happen if open AI fails and there’s a there’s a strong possibility that

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they’re not the ones that are going to win like anthropic is crushing it Gemini

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right now polymarket I don’t know if you want to pull Poly market. Go look at the

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best AI right now. I bet you it’s Gemini or Enthropic.

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Um Oh, maybe Grock shows up in the list,

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but which company has the best AI model end

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of year? Dude, I was looking at I was looking for

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this market like earlier this earlier this week and I couldn’t find it. Is it

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like just new? Uh you know, I don’t I don’t know. Um

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let’s see which company has the second second best. Okay. So you got go back.

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Go back one. What do you mean like back?

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Go back a window. Yeah. Hit the first one. U or largest company. No, no.

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Largest company. Can you search AI one more time? Oh, no. That’s the the one

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down there. It’s the which company has best AI model in of 2025. I want that

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one. The fourth one down. Got it. Yeah. So it’s this one.

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Yeah. See, like right now Google’s winning. Gemini has gotten actually very

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good. And and one of the reasons I actually believe Gemini’s gotten really

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good is because they they render JavaScript.

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Uh what do you mean? So when their crawlers are going to the

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web, some of these other crawlers like OpenAI will not render JavaScript from

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my understanding. But Google, can you explain to me in Crayon eating

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terms just for the viewers, they render the code fully. So most of

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the websites are built in what’s called JavaScript. They’re like React. It’s the

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code back end. Most of that code does not render the text normally. It doesn’t

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show the text to the crawler in the code.

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Google and Anthropic, I believe, both render the the actual code of

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JavaScript. So, they’re able to see the website like a human can see it. That’s

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the best way to compare it. And I think that’s why they’re winning. One of the

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studies that recently came out was OpenAI’s data when it was crawled from

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the internet hallucinations like got cut like by 80 90%.

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Jeez. But the training data was what what it

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was a research thing. The training data out there that was fed into like chat PD

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was actually what was causing it to hallucinate. But real life data

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helped it not hallucinate. So, I I think there’s there’s a real possibility that

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like Open AI could just go belly up at some point if their model just is not as

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good. And man, Google’s crushing it. Anthropic’s crushing it in in some way

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XAI is really doing good. I think in a different kind of sphere of what Google

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and Anthropic are trying to do. Um, I think they’re much better for current

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events and, you know, all of that. But Gemini has access to all of Google’s

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first party data and that data is valuable. They can read every email that

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you do. They can, you know, see where you search like that. That that’s

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something that that OpenAI is starting to get where you

24:37

you connect all your connectors and it’s feeding that data, but I don’t know if

24:40

it’s training off that data. You know what’s interesting? Um,

24:45

Birkshshire Hathaway, what’s his name? Um,

24:48

Warren Buffett guy. Thank you. Warren Buffett himself.

24:52

What’s that? You just called him rich guy. I love

24:55

that. Yeah, dude. I mean, uh,

24:57

as soon as you said it, rich guy. I was like, “Oh, Warren Buffett.” That or or

25:01

Jeff Bezos or the trillionaire Elon Musk. There’s only a few of them.

25:05

There you go. Pretty much. So, this [ __ ] guy, dude,

25:10

Warren Buffett, he actually sold his stocks on Apple to buy Google. Well, not

25:16

for that specific reason, but I think he sold Apple not that long ago, but he

25:21

instead is betting on Google. That’s kind of crazy. Is Google undervalued?

25:25

I I you know, in some ways, I think they could be everybody. Can you look up

25:29

their stock price right now for me? Um, since you’re you’re driving, sorry.

25:33

Um, yes.

25:35

I think there was a fear for a second when chat GPT came out.

25:39

Um, can you do it like six months or year to date? Year to date?

25:45

Yeah, they’re up still up 40 [ __ ] five

25:48

though%. Yeah, but there was a second for

25:52

everybody that Google’s cooked. They’re they’re over chat GPT is going to crush

25:57

them. And I don’t think that’s the case. I think everybody is not going to chat

26:02

GPT. I use chat GPT daytoday. I actually mapped it as a as the little action

26:07

button. My action button now does um chat GPT. But I think what most people

26:13

are doing is using AI mode in Google. They’re doing the AI overviews. They’re

26:18

reading that. They’re that’s their interaction with it because behavior is

26:23

that totally go for it. Um, so I know what you’re asking.

26:28

I know what you’re saying. Well, I was just using that myself. I asked Google

26:35

MIT Well, I don’t I didn’t ask it, but I looked up MIT report on AI investing

26:39

because I wanted to talk a little bit more about the bubble. And this is me

26:42

using Google AI overview initially. Yeah, because it gives you the best of

26:48

both worlds. I think where chat GPT fails is it doesn’t give you all the

26:53

links. You have to like kind of press a little thing. Half the time it isn’t in

26:57

the right one. Google’s like, “Oh, no, no, no. We’re still surfacing your

27:02

information.” And again, it’s crawling the web and looking at websites like you

27:06

and I would look at it versus I believe chatbt is not doing that my

27:11

understanding of it. So the the the amount of data and the amount of

27:15

websites that are built in JavaScript and React

27:18

are are a majority of sites these days like you know like they’re all out there

27:23

or they interact with it somehow. The data that they’re probably getting by

27:26

seeing it as a human versus seeing it as like a crawler is is massive.

27:33

Yeah. So AI uh and what was it? OpenAI, they got in trouble with Reddit because

27:40

they were crawling all of their data and you know Reddit is trying to sue them.

27:44

Google doesn’t have to [ __ ] do that. It literally and this is the monopoly

27:47

part. They’re never going to admit it. But they control almost all the data.

27:52

They can access it at will if they need it, right? And this is where they train

27:55

their models. And that’s amazing. I guess that’s why I mean it was Bard the

27:59

first iteration of Gemini which Bard sucked like every other product that

28:04

first [ __ ] name also I kind of like it that’s just the AI

28:10

what’s the um the DND part of me cuz Bard is like a class where you’re kind

28:14

of like so so that’s the only reason why I’m

28:16

like I think it was a cool name but to a normal consumer it’ be like what the

28:21

[ __ ] does that mean what is this which I was also funny enough agreeing with you

28:25

there initially But now it’s Gemini and it’s a it’s a

28:30

nice name. It kind of conflicts with me when I look at Gemini on Google and I’m

28:34

trying to get into the Gemini exchange on crypto. It pulls up Google Gemini

28:39

first and then Gemini Trust. But uh to your point, yeah, it’s it’s gone a long

28:45

way, dude. Uh Gemini is very likely going to be the best model

28:51

for a little bit of for quite some time. And here’s the thing, foundational

28:55

models are extremely hard to make because they require a lot of data. They

28:58

require a lot of iteration, a lot of training, a lot of capital. You need a

29:03

lot of infrastructure for that to train the model. It’s incredibly hard. These

29:07

companies can do it. They have almost the entire money that a an AI startup

29:13

would would need. But talking about AI startups, um I wanted to just read this

29:18

report and kind of just close this off with the AI bubble thing. So this is

29:22

from MIT which some of you may have already seen. I’m not going to read it

29:25

all. It I’m going to read the first paragraph which says a recent MIT report

29:29

fund excuse me found that 95% of companies failed to achieve a return on

29:35

their investment in generative AI with only 5% of initiatives reaching

29:40

production deployment with sustained value. The primary reason for this

29:43

include a lack of clear use case, failure to customize solutions for

29:48

specific business problems, and a preference for internal development over

29:53

external partnerships. Companies that partner with AI vendors or focus on

29:58

narrow well-defined uses use cases like customer support or coding assistance

30:02

are more likely to to see success. And this is kind of like what you and I were

30:06

talking before this call. we were kind of so first of all we’re raising for

30:09

start for for social market and we’ve kind of run into this problem where

30:13

we’re a foremost a crypto company and also a um security company now I mean

30:19

we’ve kind of pivoted quite a bit more than a lot more than we’d like to admit

30:23

this year um and it’s all just based on the markets right we’re pretty flexible

30:27

but also we use AI VCs some angels that we’ve talked to

30:34

they want to see AI in a more specific kind of way. Uh I don’t want to mention

30:40

any names, but we’ve talked to some people who’ve raced who who have raced

30:44

successfully and their use cases are very explicit. AI for real estate, AI

30:50

for notetaking, AI for um prod productivity, you know, if you have the

30:56

name AI on it and you can actually demo the app, which it should be easier now

30:59

that you can vibe code it, um you’re pretty much ahead. And I know I know

31:04

Leon you talked to uh one person who was able to race far easier with talking

31:10

about cryp talking about AI than when they were racing for crypto just a few

31:13

years ago. Oh yeah. It it’s shift like and this is

31:17

why I think in some ways there is a bubble there was a bubble a

31:20

little bit for crypto. NFTTS were never going to take off. Like I think that

31:25

they’re now granded and there’s there’s more use cases for them now. Um just

31:29

like everything’s moving onchain. If you buy a house, you’re going to get an NFT

31:32

that assigns to you. Just like if you have a car, you get a title. That’s an

31:36

NFT. I think there’s some novel uses for that. But AI right now, it’s like you

31:42

you join a a meeting and you’ve got seven [ __ ] um AI notetakers, you

31:47

know? Like this is not sustainable. Like it it’s just not. And there’s market

31:53

corrections. The dot bubble was a totally different thing where there was

31:58

just not companies that existed afterwards. You know, pets.com was a

32:01

prime example and I think that the peak of it,

32:04

but I think this is the same thing. Every single company has added AI. Every

32:08

single company has pivoted. Air Table’s a prime example. They’re like an AI

32:12

company now. And I’m just like, wait, what? Like how? Like they’re building AI

32:16

apps. I think, you know, the biggest win for anybody out there is like Zapier.

32:21

They they were like, you know, kind of the infrastructure for automation and

32:25

now they’re and like we utilize them. If you want anything to work with any

32:30

anything on the internet, you need an MCP server. And Zapier has one of the

32:34

best out there. N8N has popped up that’s, you know, pretty good. Um, you

32:39

know, makes out there, but I think there’s a lot of companies that are just

32:42

building overlays. They say that their stuff’s a gentic, but it’s not a gentic.

32:46

It’s just a chat, you know, overlay. Um, there’s some stuff that’s getting really

32:50

good, but I saw like, you know, many people on Twitter say, “Hey, if you’re

32:55

doing an AI company, you should like innovate on it.” So, if you’re a lawyer

33:00

and your whole company is just run by agents, that’s what people want to

33:03

invest in because it’s just like an AI like a lawyer company. I’m thinking

33:08

think Legal Zoom, but with just all AI. That’s a huge thing. Um, but I don’t

33:14

think that’s going to be the the solve for everything. You’re not going to have

33:16

one employee and like a thousand agents. You’re probably instead of having 10,000

33:22

employees, you’re probably going to have a thousand employees, you know, doing

33:26

doing a lot lot more. Um, what does that mean for people and, you know, jobs and

33:31

percentages like tech just laid off a ton. I think the the economy is trying

33:35

to wrestle with all of that just like the economy wrestled with um what what’s

33:40

happening in 2000 with internet. It was changing everybody’s lives. I just think

33:45

there’s a lot of wrestling with what is happening.

33:49

I think unemployment is closer to two. It’s definitely above 10%. Which is

33:54

insane. We are in stackflation as they call it. Inflation is high.

33:58

Um GDP growth is negative. Unemployment is high. That is

34:02

stackflation. And it sucks. We’re going to feel the effects

34:06

probably next year, dude. I mean, once this bubble pops, it’s going to be

34:10

catastrophic. Um but final note on the whole AI crypto bubble well different

34:16

respective bubbles right so we mostly talk about AI bubble but let me kind of

34:21

just paint the picture a little bit better on how big the crypto bubble was

34:25

which a lot of people don’t really acknowledge because they don’t really

34:28

know much. So four years ago this NFT was worth almost 500 ETH and today it’s

34:35

worth less than 0.1. Yeah.

34:39

And it sucks. I actually like this NFD collection. It’s um Invincible Friends.

34:43

Invisible Friends. Oh, Invisible Friends, not Doodles.

34:46

Yeah, Invisible Friends. I love it. I think it’s great design and everything,

34:50

but just like um Crypto Apes or what the the

34:55

one that’s busted invisible friends. Yeah. So, this is the collection. Are

35:00

you talking about like board apes? Like the monkeys

35:03

board apes? Yeah. Yeah. There you go. Yeah, dude. Man, it’s it’s kind of

35:09

tragic like seeing all of this. I mean, it’s market correction. You’re always

35:13

going to have those no matter what. And that’s what we’ve seen with Bitcoin and

35:17

well, not with Bitcoin, but we’ve seen with crypto. I think Bitcoin is going to

35:20

continue to go high. I don’t know when. I don’t know why or how, but

35:26

the scarcity is a big component to it. You know, it’s more scarce than gold.

35:30

And more people are going to buy it. But yeah, I mean, board apes, these [ __ ]

35:35

things. Um, man, I think and let’s pull up some data actually. So, about or no,

35:41

we can see it right here. Uh, OpenC had a redesign. It’s a little confusing

35:45

right now, but it it’s like you move the forks around

35:48

in your house and you can’t find the forks.

35:52

Exactly. Um, so there’s over 5,000 owners. Half of them are unique, which

35:58

is interesting. You know, I don’t know. Uh, let me know what you

36:03

think on that. only 3.4% are listed and the top offers

36:08

right now is about six E which is about $18,000.

36:13

Dude, I know when people were buying these things for millions and now it’s

36:16

like less than 10% of that which is insane. Um it was a it was a bubble that

36:23

I don’t think anybody Well, I think a lot of people thought it

36:28

was a bubble but I don’t know if any of the people buying it thought it was a

36:32

bubble, you know. You know, this is where I’ve had learn.

36:38

So, I’m 28 and the first bubble that happened in my lifetime was the dotcom

36:43

bubble, but I was like an infant. I didn’t know [ __ ] I was just [ __ ] in my

36:47

diapers. Um, and then in 2008 was the house mortgage crisis or the um housing

36:53

crisis. Yeah,

36:55

I was I was playing le I was playing with my Legos in that time, dude. I was

36:59

watching Star Wars, Clone Wars. I was doing all that stuff and I think

37:04

um well there’s this meme with YC where they’re hiring younger and younger kids

37:09

or you know people which is nice but um there was this viral video that went

37:15

popular on on Twitter where it was um God I think it was like the the kid was

37:20

not no not older than three years old and he was already like talking about

37:24

this is how you can get on YC. How about you first learn how to wipe

37:29

your own ass before you can talk about how to get into YC? But um the point

37:34

here is is you know I think the crypto bubble with the NFT bubble that we saw

37:40

was my first adult bubble where I can be like okay no so this is kind of how

37:45

things are. You know people will this new thing that’s trending will come

37:51

out and then people are going to oversell it. They’re going to think it’s

37:54

going to change the world and it’s going to only go up. That’s how it is. And

37:58

then people realize, “Oh, this thing sucks. It’s not as good. It’s not going

38:02

to solve my problems or it’s not going to make me infinite money.” Boom. People

38:06

sell. People stop selling it. They stop talking about it. It just goes to [ __ ]

38:11

And that’s kind of what we saw with NFTTS. And this is kind of like what

38:15

we’re seeing with AI. You know, a lot of people right now think AI is going to

38:19

replace jobs. You know, there’s this famous article that came out about

38:22

Amazon laying over uh 12 13,000 employees just because of AI. But it’s

38:28

not because AI is going to replace their job. because they were instead

38:32

allocating that money that would go from 13,000 employees or so into their own AI

38:38

infrastructure because they could make more money on the AWS side instead of

38:42

you know putting that money to their employees which still sucks but it’s not

38:48

directly AI is not directly replacing people and there’s still some

38:52

hallucinations I think AIs have gone have come a long way since 2022 but

38:58

I mean one more thing I’ll say is I made this post and it had one like. So if you

39:02

guys want to like it, give it a like. Um, so this is kind of what I talked

39:05

about. I said consumers don’t actually care about AI. They care about outcomes.

39:09

Gen AI, computer vision, automation, robotics, large language models, etc.

39:13

are not the same. Gen AI gets the hype, but automation gets their attention.

39:17

People gravitate to AI when it removes friction, saves times, or handles the

39:22

boring stuff. there is more value more people or excuse me uh value over

39:28

novelty every time. That’s kind of what I wrote and that’s kind of like my

39:33

interpretation what I’ve learned about all these bubbles that we’ve seen where

39:39

you know hype is just not going to last forever. Retention happens when there’s

39:44

value actually given in AI right now. If we can automate the boring stuff, things

39:49

that we don’t want to necessarily handle or don’t care about as much. That’s

39:54

where AI is going to come into use. For instance, we use AI to do market

39:57

research for our next few episodes. It saves me a [ __ ] ton of time. As someone

40:02

who barely has time to eat, sleep, you know, like I’m very sleepd deprived in

40:06

general because I’m working a full-time job. I’m building a startup. I got to

40:10

make sure my dog doesn’t die on me. So, I got to take care of her. I got to

40:13

spend time with my fianceé. I got to barely make some time for my friends in

40:17

between. I am so [ __ ] busy. I don’t want to spend more of my time doing

40:20

market research. I rather just be able to get the stuff that matters as soon as

40:24

I can. And that’s where AI comes in. And that’s why I pay for OpenAI. I pay for

40:29

Claude. And I mean, yeah, I I also could pay for

40:34

Nate end to automate some of my workflows. But that’s the general

40:38

message that I want to leave with. We’ll see. Like I think AI is going to have a

40:44

bust a little bit. Some of these companies that are building on top of

40:47

the big ones are going to go away. And I think if some of these go away, you’re

40:52

not going to, you know, like the amount of credits that are being bought right

40:55

now. Like dude,

40:58

it’s just crazy. Like do you want to talk about real quick too the Sam Alman

41:01

bailout? Like I I don’t understand what’s what’s happening there. I just

41:05

know that there was a meme online. Okay. So, real quick, TLDDR, Sam Alman

41:13

came out doing some press releases, some some marketing or not marketing, but

41:17

much more like interviews. Uh, he was pushing for the government backing

41:22

OpenAI’s debts amid shutdown, which it drew a lot of criticism on X. And this

41:29

is I asked Grock like, “Hey, give me some context.” So, I’m going to read it

41:32

for you again. uh people were criticizing uh his him

41:38

asking that on the government to relieve some of OpenAI’s debts, which is

41:42

basically saying, “Hey, bail me the [ __ ] out.”

41:45

Um this was ironic for a tech billionaire

41:49

seeking socialist style aid. So, a lot of and and I don’t want to get too

41:53

political, but it’s a lot of people push this idea that socialism is bad, but

41:58

right now what we’re seeing, and we saw it in 2008, uh we have corporate

42:02

socialism, which means the government will bail you out at no extra cost, and

42:05

they don’t even ask for anything in return, which is just bad business. Um,

42:09

and I have a couple of posts that I can refer to if you like, but um that’s the

42:13

general premise of it. Um, no, that makes sense. And I think, you

42:17

know, if the government does bail them out, they need to take equity. Like,

42:20

dude, absolutely, dude. You know, Bernie Sanders was really big

42:24

on this. And the iron the irony is Trump is the one who who implemented it with

42:30

Intel and others. Like, I think if we bail out any of these companies, us, the

42:35

taxpayers should benefit. Um, the United States is an extreme amount of debt.

42:40

It’s not sustainable. Like, yeah,

42:42

you know, in the end, it’s just not. Um, the only thing that’s backing it up

42:46

right now is the warships that that move around this this world. Um, and I think

42:52

if we want to see this stuff progress, like we can’t let these these private

42:58

companies just take advantage of that, we should probably forgive their debt in

43:03

the end because unfortunately, if you don’t, they could

43:08

go belly up and it’s going to take the whole US economy just like uh 2008. If

43:12

you let these things that are too big to fail fail,

43:16

it would have sent us into like a depression. You know, like the

43:20

government has so many things to stop another great depression and we’re h

43:25

hurtling towards so many problems. And one of them is is if the United States

43:30

dollar just falls, it is a problem. But if Sam wants to be bailed out, he needs

43:36

to give up equity. And he needs to give up significant amount of equity. Um is

43:39

that worth something? Who knows? Like again, open AI is is pushing this

43:45

forward. Like Microsoft is spinning up um nuclear reactors to power data

43:49

centers. Like there is a problem right now with how do they power all this in

43:54

this world. I think it’s very real what they’re

43:59

building. they have in their last reporting or in their last um I guess uh

44:05

town hall if you want to call it that Sam Elman reported almost a billion

44:09

people using open AI you know or chatbt which is like 800 million the specific

44:14

the the exact number around that ballpark that is a real business and

44:18

that is a real amount of traction I wish 8 billion people or excuse me 8 million

44:24

people were using social market right um and the same could be said a lot of

44:28

people a lot of businesses want that many people. So, I think what they build

44:32

is not vapor work. I think they build a very tangible, very useful, productive

44:36

tool, productivity tool. But asking for a bailout, dude, you’re shooting for the

44:40

moon. You need to be ready to have the conversation of like, what can I give

44:44

back to the taxpayers and the government that is going to build me up? Because

44:49

this conversation was very different in 2008 from what it seems. Again, I was

44:52

wiping I was I don’t know, being a kid, right, in 2008. But

44:56

yeah, um

44:56

licking some eating some Legos and snorting uh nickels probably.

45:02

No, dude. I was snorting glue, dude. That was the thing.

45:05

So, explains a lot,

45:06

you know. Oh, absolutely. So, the thing is is

45:11

banks when they got bailed out, they didn’t give [ __ ] back.

45:15

Real quick, uh small small amendment to your thing. Um, the US Treasury did

45:22

disperse like I think like $450 billion. I believe they got like 95% of that

45:30

money back. Wait, what do you mean?

45:33

They they were repaid on that those bailouts.

45:36

Oh, okay. Yeah, cuz the Treasury the Treasury is

45:40

the one who bailed it out. It’s the same thing as um

45:43

um uh Argentina. Argentina’s the 20 billion dollars that they gave is is

45:49

like a it’s a weird currency swap system where they bail out the country and then

45:54

essentially the Treasury will get that money back at some point, but a lot of

45:59

this stuff is like an odd like like move of money. Um it’s the same thing.

46:06

Yeah. Like the Ukrainian all the stuff that were Yeah. Essentially exactly that

46:11

bubble. But Ukrainian war is the same thing. Every missile we give, we

46:15

essentially get money back for it, but it’s like in a later date.

46:20

Okay. So, it’s not like we’re just giving the money. No strings attached.

46:24

That’s crazy. Yeah. Like in in many ways there are

46:28

strings attached, but they they have to do it. It’s like um the bailouts did not

46:35

address the underlying issues that led to the crisis but it resulted in like a

46:41

moral hazard you know or risk of financial you know future excessive risk

46:46

takingaking by financial institutions like there’s a weird thing but public

46:50

perception is that bailouts were a net positive you know in there um you know

46:56

all of that but uh there was like bonuses paid to bank executives you

47:01

general feeling that no one was held accountable, which is why this bailout

47:05

is that moral, you know, part. Same thing with Sam Ultimate. Like, if if he

47:10

gets bailed out, he’s probably going to take a bonus. He’s going to take more

47:12

equity. Like, no. Like, you you should put all of these tools in in in front of

47:18

them to stop that. But also that was um some of the laws that was passed after

47:22

two 2008 that Trump has actually repealed for the most part um to protect

47:26

the to protect the American people from big banks over lending and doing

47:31

fractional things that just caused caused all this. Um but that money was

47:37

all paid back in that bailout. I don’t know about the cars the car companies if

47:41

they were paid out. I know Ford didn’t take money, but I think GM and all that

47:45

inevitably took money that that, you know, inevitably Stellantis bought most

47:49

of those brands. Chrysler, you know, all Jeep, all that. So, did that one help?

47:55

Probably not. Um, but many of those banks would have gone under. Um, I think

47:58

there were six banks in total. Okay. Yeah, I mean, that makes sense.

48:03

Um, well, there goes my argument. Um, you know, you you probably framed it

48:08

much better than I would, so I appreciate that.

48:10

Great, man. I mean, anything else? No, let’s let’s do the wrap on it. Um,

48:16

great. Yeah, I think that’s it.

48:19

Great. Well, thanks so much for watching. This has been Social Market.

48:23

Excuse me. This has been Social Leisure Report with J.R., founder and CEO of

48:26

Social Market and Leon, CMO of Social Market. And make sure you like this

48:31

video if you liked it. Subscribe if you want to keep watching this kind of

48:33

stuff. If you disliked it for whatever reason, give it a dislike. And yeah,

48:37

this has been Leave a comment, too, if you disliked

48:39

it. I I want to know why you disliked it. Don’t Don’t leave me wondering.

48:44

And if you actually stayed this long to watch it, thanks so much. Um let us know

48:47

what you think. Yeah. We’ll see you in episode 29 next week. Take