UnHerd with Freddie Sayers
John Rapley & Philip Pilkington: Is a market crash coming?
Jan 27, 2025
John Rapley, an economist and author of "Why Empires Fall," teams up with macroeconomist Philip Pilkington, host of the Multipolarity podcast. They delve into the significant decline in US tech valuations and the disruptive rise of the Chinese AI app Deep Seek. The duo analyzes potential indicators of a forthcoming market crash, debates the contrasting economic philosophies of the Trump era, and discusses the shifting investments of global elites at Davos. With a blend of skepticism and insight, they navigate the turbulent waters of today’s economy.
30:09
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Quick takeaways
- The emergence of China's Deep Seek AI model raises concerns about inflated U.S. tech stock valuations and potential market instability.
- A market crash could politically impact the Trump administration by shifting blame for economic downturns to the new administration despite underlying issues.
Deep dives
Market Reactions to Deep Seek
A significant sell-off in U.S. technology stocks has caused investors to express serious concerns, with fears that the Deep Seek AI model from China might be a game changer in the industry. Deep Seek, developed at a fraction of the cost of its competitors, is seen as highly disruptive due to its open-source nature, allowing for widespread adaptation without hefty licensing fees. This innovation is contributing to market jitters, particularly affecting businesses reliant on GPU sales, such as NVIDIA and AMD, leading to declines in their stock prices. The reduced demand for chips could signal a potential bubble burst in the AI sector, which has seen inflated valuations driven by previous technological advancements.
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