Dead Money
4 hours ago
- AI demand is largely an illusion, driven by hyperscalers stockpiling GPUs and funneling compute to OpenAI and Anthropic, who represent 70-80% of AI revenue.
- Hyperscalers need $308 billion annually to break even on 2026-2027 capex, but current AI revenues are only $183 billion, with over 64% coming from just two companies.
- The AI data center debt load is unsustainable, with rates rising to 8%+ yields, and even Oracle and CoreWeave face distressed debt conditions.
- AI startups are deeply unprofitable and dependent on venture capital, with no meaningful revenue outside of OpenAI and Anthropic, making the entire ecosystem fragile.
- Anthropic's leaked S-1 shows it spent $2.75 to make $1 in 2025, worse than OpenAI's $2.60, indicating fundamentally broken economics.
- The AI bubble is a doom loop: rising debt costs inflate hardware prices, which require more debt, and the underlying investments yield no returns.