From Karl Marx’s vampire to Warren Buffett’s moat, the crumbling gothic castle has been capitalism’s favorite metaphor for 250 years

Markets have adopted a particularly gothic Halloween theme as the AI trade reveals the crumbling foundation of early 21st century capitalism. Wall Street has been using castle-related language for years, with Jamie Dimon describing JPMorgan's balance sheet as a fortress and Warren Buffett warning that the moats protecting the bank are not particularly deep.

The gothic metaphor has been a favorite image of capitalism for about 250 years, with the crumbling castle and the moat, the vampire, and the creature built in a lab trading places. This Halloween season, the AI giants' moats are at the forefront of the conversation as AI stocks experienced a two-day rout. Companies like Alphabet and ServiceNow saw significant drops in their stock prices due to concerns about the durability of their competitive advantages in the AI era.

Despite significant investments in AI by major tech companies, the companies are not seeing a financial payoff and are treating AI spending as a cost center. The decline in AI spending has resulted in a loss of nearly $900 billion in market value for Big Tech.