Wilder: Space X and the AI Bubble

John Wilder's latest piece, "SpaceX®: The Final Frontier?", discusses the SpaceX initial public offering, profitability, and financial bubbles. 

    Under normal economic theory, money is more or less efficiently used because it chases after business opportunities and investments that will make those businesses a profit, meaning that it is flowing to companies producing goods and services which people actually want and need. This is why socialism and communism always fail--instead of going into things people need and want, it goes where some soulless bureaucrat thinks it should go, which is often for social engineering programs. 

    But bubbles are driven by speculation (a financial term meaning gambling) which chases hype and the fast buck. Unfortunately, it draws in a lot of money that would otherwise have gone to stable, useful investments into a gambling frenzy until it the bubble pops and the money is gone into the pockets of the best gamblers leaving the late comers high and dry.  And if the bubble was big enough, and drew in enough money, it will result in a recession or, even, a depression. 

    The concern that John has is that this IPO was not to support SpaceX or even Starlink, but is intended to fund Musk's venture into AI. And investment in AI (by everyone, not just Musk) may well be a bubble.