--- title: "Investors Laying Groundwork to Profit Massively When Economy Collapses" description: "Economy update: the AI bubble is so big that a record amount of money is now being bet on the S&P 500 collapsing sometime in the near future." date: "2026-07-24" modified: "2026-07-24" authors: - name: "Joe Wilkins" job_title: "Correspondent" link: "https://futurism.com/authors/jwilkins" url: "https://futurism.com/future-society/investors-shorting-economy" categories: - "Artificial Intelligence" - "Finance" - "Future Society" - "Investing" --- # Investors Laying Groundwork to Profit Massively When Economy Collapses ![A stylized photo illustration of a businessman's hand grabbing at a pile of money.]() *Illustration by Tag Hartman-Simkins / Futurism. Source: Shutterstock* Another glowing red indicator just lit up on the control panel steering the US economy: short sellers have placed a nearly unprecedented magnitude of bets against the domestic stock market. A new analysis by the firm S3 Partners has found that short interest in the S&P 500 is now the highest it's been since the company began compiling that data in 2010, [*Business Insider* reports](). In all, S3 found that roughly 3.7 percent of the S&P's free float — meaning the total market value of shares available to the public for trading — is now tied up in short interest. That's a significant number, almost double the short interest in the S&P at the same time last year. For context, *BI* notes that roughly 3.8 percent of the S&P was hedged against itself right before the 2008 financial crisis, adding to a [growing number of data points]() suggesting the economy is due for a major reckoning. Stripping it down to plain English, this is a glaring indication that institutional investors are trying to get ahead of the AI financial bubble, which accounts for roughly [60 percen]()t of the index's growth since April. And the fact that a growing number of investors aren't just exiting positions, but are actively betting *against* the US stock market is a massive tell. For years, a few brave [economists]() and [financial analysts]() have pointed to the fact that the amount of money being spent on AI continues to rise as evidence that the AI bubble is unsustainable. The thing is, investors are fine with rising costs if there's enough revenue coming in to justify the spending, which for AI development has already eclipsed [$1.6 trillion]() as of 2026. But whether we're looking at [data centers](), [digital ad revenue](), or the [cost of inference](), the kind of revenue growth needed simply isn't there, as the leading tech companies play an increasingly expensive game of kick-the-can-down-the-road. This is the situation that has investors — and plenty of [regular people]() — nervous about the AI financial bubble. A perfect example can be found in Google's parent company Alphabet, which reported its first quarter of negative free cash flow this week. The company likewise raised its capital expenditure expectations by a cool $5 to $25 billion, [*CNBC* reported](), sending investors [running for the hills]() as the long-promised AI revolution remains a world away. **More on the AI bubble:** *[SoftBank CEO Says You're Too Stupid to Understand What's Going on If You Believe the AI Bubble Is Real]()* ## Author At Futurism, I focus on the intersection of technology and power — examining the economics, history, and politics behind today’s dystopian headlines. As a writer, I’m interested in topics ranging from AI’s impact on labor to startups nobody asked for. My prior work includes bylines in Jacobin, Verso, and Blue Labyrinths. My work for Futurism has been cited by publications including Forbes, The Guardian, MIT Technology Review, Time, The Nation, Mother Jones, The Verge, and Wired. I grew up in Michigan, attending Central Michigan University as well as Ball State University, where I earned a master of music. I now live in Brooklyn with my girlfriend and our cat Ziti. On weekends, you can find me hunched over a cold pint arguing geopolitics with the other transplants. ### Author social links [Bluesky]()