My prediction if the Anthropic IPO fails, if I had to guess:

The AI bubble will pop. LLMs and local models won’t go anywhere but OpenAI and Anthropic are done.

Tech will face the largest reckoning it has ever faced. Like cataclysmic. So much of the industry has gone all-in on it, that a failure for AI profits to materialise (which I think we all expect) will likely wipe out the sector. Don’t expect to get a job as a programmer anytime soon. There will be no “normal” to go back to. Tech as we know it, even open-source, will change for good, and I don’t mean that positively. An enormous part of the ecosystem is propped up by paid work which will vanish overnight.

I imagine Microsoft will be bailed out because they will basically have to be bailed out. Windows is too widely used to be allowed to fail. I don’t know if the other AI companies will be bailed out and I imagine it’s going to be a major fight.

The real economy beyond AI has not grown appreciably and has contracted in some sectors. Datacentre construction has been the main reason commercial property nor construction have already suffered. I doubt construction or equipment companies go under, but it’s likely to be bad. Construction and tech layoffs will obviously have huge effects on the economy.

Multiple investment firms, especially private equity (already enormous pressure from overleverage during the period from 2008–2022) will likely implode. A lot of businesses that you might not expect to be affected will likely close or be sold off. Expect a huge wave of selloffs and closures of hospitals, restaurant chains, veterinarians, retail, property, etc.

I don’t know what happens to hedge funds or pension investments. Likely they get bailed out. Otherwise it would be the most devastating wipeout of retirement funds ever seen.

Governments will likely mobilise tremendous sums to keep the economy alive. The effect may be blunted for some time. I expect the US national debt to go out of control which who knows what consequences that will have. Many states will likely have to shoulder the consequences too from collapsed projects. Doubtless other countries will have to bail out huge parts of their financial sectors and possibly more.

My personal prediction, based on little more than speculation: severe recession like 2008, but bailouts stop it from getting worse.