The most obvious thing in the current situation is that no matter what Trump does, he has no exit strategy. Freezing assets is merely a stopgap measure for the market, and Iran will demand reconstruction costs in a clear manner that meets their demands. if he were to pass the burden onto the Gulf states and walk away, the U.S. petrodollar would be under threat. Trump needs to realize this fact as soon as possible.

As a sign of a tightening private market, cash-rich Big Tech companies like Google and Meta are suddenly rushing to raise capital by selling off their own shares, and bubble warnings are ringing out everywhere. Right on cue, Trump announces that the government will invest in the AI industry, planning to give every citizen a stake in AI. Unless you are an irrational investor who went all-in on AI with zero risk management, what else are you supposed to make of such a perfectly timed remark? Doesn't Trump's statement sound like a declaration that he will use tax dollars for a bailout, and that he intends to distribute AI shares in an even more blatant manner, when they are already forcing citizens to buy them through their 401k retirement funds?

The prolonged conflict in Iran has left the blockade of the Strait of Hormuz unresolved. The fundamental differences among the United States, Israel, and Iran remain as wide as ever, with no viable exit strategy in sight to mitigate mutual losses. This protracted war has led to severe disruptions in the supply of Qatari 6N-grade helium and Middle Eastern crude oil. Currently, for South Korea and Taiwan, the United States stands as the sole alternative to replace their Middle Eastern supply routes. Looking at the strategic reserves of 6N-grade helium and crude oil in both nations, if the war continues until the end of the year, they will be forced into absolute dependence on the US. However, most retail investors are only superficially aware that the current return on AI investments is abysmal and that the private equity market—the primary funding source for AI—is in dire straits. But what if the warnings from financial titans about an AI bubble burst actually materialize? What happens if private credit, the lifeline of AI ventures, freezes, multiple US states cancel their AI data center projects, and semiconductor manufacturers are forced to declare force majeure? Let's first examine the stance of the US administration. Earlier this year, the US President and the Secretary of Commerce threatened to impose tariffs on semiconductors from South Korea and Taiwan to pressure them into investing in the US. Although this pressure was short-lived—as it was highly detrimental to Big Tech, the core of the US market—and seemed like a hasty measure, it was actually a desperate move to counter the geopolitical risks associated with semiconductor chips, as profoundly analyzed by US scholars like Chris Miller. Ultimately, the US has no choice but to maintain this stance toward South Korea and Taiwan until it secures its own domestic semiconductor manufacturing capabilities. Now, let's connect the dots. The prolonged Iranian war is rapidly depleting Northeast Asia's reserves of 6N-grade helium, essential for semiconductor manufacturing, and crude oil, which underpins their entire national industries and economies. Notably, as analyzed by the Oregon Group in their article "Helium crisis puts US in control of semiconductor supply chain", Northeast Asia will inevitably face a helium shortage by the end of the year. As for crude oil reserves, South Korea ostensibly has about 200 days' worth, but considering the shares allocated for petrochemical exports, practical analyses suggest it is closer to 68 days (at most 90 days). In this context, suppose the private equity market stiffens, drying up AI investment funds, and more US states begin rejecting AI data centers due to water, environmental, and electricity concerns. A cascading cancellation of AI data center plans would spell the end of the semiconductor supercycle. At that pivot point, the power dynamic will reverse: South Korea and Taiwan will lose their leverage as indispensable suppliers, and the US will assert its dominance as the absolute dictating power. The US will then execute its grand strategy for semiconductor security, meticulously drafted by its top scholars. South Korea's entire industrial spectrum—not just semiconductors, but also renewables, secondary batteries, and EVs—survives heavily on the US market, which has erected high trade barriers against China. Conversely, China represents an absolute threat to South Korea's emerging industries. As for Taiwan, while there is some public sentiment favoring eased economic tensions with China, the aftermath of the Hong Kong protests has left them highly vigilant against the prospect of annexation by a dictatorial regime. In essence, South Korea and Taiwan cannot escape the sphere of American hegemony. What, then, is the fate of the South Korean and Taiwanese markets? Their profit margins, historically bolstered by relatively cheaper labor and material costs compared to the US, will vanish. South Korean memory chipmakers, in particular, will suffer a significant loss of competitiveness against US-based Micron. Moreover, the booming semiconductor industry that previously supported local materials, parts, and equipment (MPE) suppliers in both nations will face cascading issues. Small and medium-sized enterprises (SMEs) excluded from CHIPS Act subsidies lack the capital to relocate their factories to the US. Supplying goods across the Pacific incurs prohibitive logistics costs. Consequently, parts of the supply chain will be replaced by domestic US MPE companies; even if not fully replaced, the chipmakers' profit margins will suffer further damage. This sequence of events will trigger a hollowing out (deindustrialization) of the South Korean and Taiwanese markets long before hyperscalers can secure new funding to resume AI data center projects. For the AI sector to recover from a bubble burst, tech companies must demonstrate renewed productivity, much like they did after the dot-com bubble. However, while the CHIPS Act provides upfront subsidies for US investments, it also demands a substantial share of operating profits. Furthermore, under the pretext of preventing technology leaks to China, the core technological processes of semiconductor companies will be subject to meticulous US audits. Ultimately, capital is drained from their home countries to the US through labor costs, taxes, and the CHIPS Act, while their proprietary technology remains highly vulnerable. TSMC founder Morris Chang accurately predicted this exact hollowing-out scenario. [Conclusion] The US grand strategy for semiconductor security, built upon rigorous scholarly analysis, will persist until it achieves its objectives. Bound to American hegemony militarily, economically, and diplomatically, South Korea and Taiwan—cornered by raw material shortages—will be forced to renegotiate their semiconductor deals with the US from a position of severe disadvantage. Should the US execute its plan successfully, the hollowing out of the South Korean and Taiwanese markets is virtually inevitable.

Whether during the dot-com bubble or the Lehman Brothers collapse, the technological innovations and corporate fundamentals of those eras were not inherently flawed. Financial crises erupted because liquidity dried up precisely when the market collectively chose to ignore the risks. Blind faith in financial engineering and a blatant disregard for actual profitability were the true architects of these two catastrophes. AI is undeniably a monumental innovation, and the free cash flow reserves of Big Tech appear robust. However, the astronomical costs of building AI data centers are being financed through private credit via Special Purpose Vehicles (SPVs). Yet, no one is discussing the real default rates or the effective interest rates within the private credit market. Furthermore, there is a willful ignorance regarding how many of these debt-laden companies are actually bleeding money due to their leverage. AI businesses are currently failing to cover their massive operational deficits with their own revenues. A close examination of Big Tech earnings reports reveals that these losses are being subsidized by free cash flow generated from legacy divisions entirely unrelated to AI data centers, such as traditional search advertising and commercial cloud services. Optimists dismiss AI bubble theories by arguing that AI demand is overflowing and supply is severely lagging. However, this argument completely ignores the physical constraints of the real world required to generate tokens for AI inference. While the demand for AI data centers for training and inference is growing exponentially, the immediate supply bottlenecks in power infrastructure and AI server equipment cannot be resolved in the short term. Crucially, for these massive investments in AI data centers to yield an adequate return, the industry needs to generate an estimated $2 trillion in new annual revenue. Before anyone denies this reality, they must first explain why Big Tech companies are extending the useful life of their chips beyond physical limits for depreciation purposes. For retail investors who cannot easily discern the true nature of the market and these corporations, reading between the lines to find this truth is vital. It is an undeniable fact that the US must go all-in to win the AI hegemony war against China. However, we cannot ignore the sheer scale of US national debt, which has reached its limits post-COVID-19. Moreover, geopolitical risks have essentially erased the possibility of imminent interest rate cuts. Meanwhile, within the private credit market, roughly 40% of borrowing companies are already "zombie companies" unable to cover their interest expenses with their operating profits. If this colossal risk is ultimately offloaded onto the retirement funds and insurance pools of the American public, who will bail them out, and with what money? To reiterate, AI is undeniably a profound innovation and an industry that must be treated as a matter of life and death in the race for global hegemony. But no matter how great the innovation, it is useless without capital. In the face of this reality, turning a blind eye to the true state of its funding sources is incredibly dangerous. Furthermore, it is fundamentally unjust that those who dominate the AI ecosystem and reap all the profits—including lucrative fees from these complex financing structures—are socializing the downside risks, spreading them across the entirety of American society. Despite this, the elites of Big Tech and Wall Street smile and package the situation as perfectly fine, only to put on serious faces and gaslight the public about the inevitable competition with China. Reading between the lines, they do genuinely seem serious—and they really are "fine." Regardless of what happens in the private credit market, they know the bill will ultimately be footed by the pensions and 401(k)s of ordinary Americans, who cannot even avoid the risk through redemption halts. Any moral hazard will surely be smoothed over by the lobbying power of Big Tech and Wall Street, which has hit historic highs this year. Anyone with a bit of common sense can only reach one cynical conclusion: just as Big Tech and Wall Street claim, the situation for them is indeed fine. In an era where the hope for rate cuts has vanished, they are successfully socializing the risks of the private market while using their lobbying power to "correctly educate" the political sphere.