Economics

In this scenario, the Big Four (Deloitte, EY, KPMG, and PwC) went bankrupt because major companies had accounting scandals. But the Big Four were also directly and indirectly involved, so their licenses were suspended and they could not accept new clients because of the scandal.

But the scandal is causing Big Four (Deloitte, EY, KPMG, and PwC) customers to leave for fear that it will also affect them. The Big Four's finances are in jeopardy and they are declaring bankruptcy to prevent the problem from getting worse.

I would like to know what economic consequences this event could cause, and if this event could be comparable to the crisis of 2008, 1929 or more serious than the two mentioned above.

https://archive.ph/ZTboj

China is the bigger trade partner for majority of the world. All the trade war will accomplish is to further isolate the US and its remaining vassals.

https://www.mdpi.com/1099-4300/26/2/141

cross-posted from: https://lemmy.crimedad.work/post/321458

I don't underestimate our Dear Leader's ability to do it badly, but isn't a sovereign wealth fund typically a good idea?

Relatedly, eight months ago: Google “We Have No Moat, And Neither Does OpenAI” Leaked Internal Google Document Claims Open Source AI Will Outcompete Google and OpenAI

Nvidia was propelled into becoming a titan of the hardware industry by the frenzy in the AI market. However, an unstable market driven by a speculative bubble is not a sound foundation. We can get an idea of what Nvidia can expect going forward by looking at what happened with Cisco during the dot-com bubble.

Cisco thrived as the backbone of the internet revolution, supplying networking equipment to a wave of startups and tech companies. But when the bubble burst, the contradictions of capitalism came crashing down. Overproduction led to a glut of hardware, bankrupt startups flooded the market with second-hand equipment, and demand for new hardware evaporated. Cisco quickly went from being a star to a company facing serious financial troubles.

Nvidia finds itself in a rather similar position today. The AI boom created a massive demand for GPUs, with VC funded companies investing billions into hardware. All of a sudden, DeepSeek disrupted both the need for Nvidia's hardware the whole AI as a service business model. When the bubble bursts, the market will be flooded with second-hand GPUs, driving down demand and undermining Nvidia's core business.

This is the essence of capitalist contradiction: the system’s drive for endless expansion leads to overproduction, while its reliance on speculative markets ensures that demand is inherently unstable. Both Nvidia's dependence on high-risk AI startups and Cisco’s reliance on dot-com companies illustrate how pursuit of profit creates fragile ecosystems that are vulnerable to sudden collapses.

The broader implications for the industry are equally damning. Companies that have invested heavily in expensive GPUs may pivot to new paradigms, leaving Nvidia with reduced relevance in a transformed market. Nvidia's current valuation, inflated by AI hype, could face a sharp correction as growth slows and the second-hand market undercuts new sales. Other players in the AI hardware ecosystem, dependent on Nvidia's dominance, could also face fallout, further destabilizing the industry.

This scenario isn't an isolated case of one company’s potential decline, it's a microcosm of capitalism’s inherent flaws. The system’s reliance on speculative booms, its tendency toward overproduction, and its inability to plan for long-term stability ensure that crises become inevitabilities. Nvidia’s trajectory, like Cisco’s before it, is a product of a system that prioritizes profit over sustainability, and short-term gains over collective well-being.

The cycles of overproduction and collapse will continue as long as the pursuit of profit remains the driving force of economic activity. The only way to break free is by building a new system based on rational planning, collective ownership, and the prioritization of human needs. Until then, the crashes will keep coming, and the working class will continue to pay the price.