Avi and Jonah discuss whether powerful new AI models like Mythos could crash financial markets, but conclude that the bigger risk is still inflation and higher interest rates.
Key Points
Key Highlights:
- Despite fears around AI models causing market disruptions, the hosts believe rate hikes remain the largest threat to stocks, crypto, and risk assets.
- Inflation is accelerating again, with energy prices driving much of the increase, while strong jobs data makes it harder for the Federal Reserve to cut rates.
- Markets are increasingly pricing in the possibility of another rate hike, which could pressure valuations across technology, AI, and crypto.
- The hosts argue that most of the AI boom's gains have already gone to private investors in companies like OpenAI, Anthropic, and SpaceX, forcing public investors to look for second-order opportunities.
- Wealth created by AI is expected to flow into scarce assets such as luxury real estate, collectibles, rare cars, and other alternative investments rather than traditional index funds.
Takeaway
While many investors are worried about AI models like Mythos breaking markets, the hosts believe macroeconomic forces matter far more. Rising inflation, delayed rate cuts, and the possibility of a new hiking cycle pose a much greater risk to the current bull market. In their view, the key is not fearing AI itself but understanding where AI-driven wealth will flow next.
