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Even banks and hyperscalers are now sounding the alarm about the AI bubble
16 days ago
- Bank for International Settlements warns of AI bubble pop risking global economy
- Oracle's stock dropped 40% in a month, exposed to AI bubble risks
- Hyperscalers like Amazon, Microsoft, Google, Meta invest billions with uncertain returns
- Risk extends to suppliers, construction firms, and small businesses
- Enterprises seek control, open-source models, and predictable pricing over frontier AI
- Oracle's SEC filing highlights dependency on OpenAI's uncertain payments and capacity risks
- Challenges include data center permitting, power sourcing, and political opposition
- AI companies may raise prices, but market tolerance is limited
- Shift towards using AI models less and optimizing costs signals bubble strain
Let AI Burn
14 days ago
- The AI industry is described as a bubble inflated by manufactured consent from Silicon Valley, media, and stock markets, lacking real demand.
- Generative AI is criticized for not being truly intelligent or autonomous, with high costs and unsustainable revenue models reliant on venture capital.
- Comparisons to the Dot Com Bubble are rejected, arguing AI GPUs lack the lasting utility of fiber optic infrastructure post-bubble burst.
- OpenAI and Anthropic dominate AI compute spending, but their revenues are unsustainable without continuous funding, masking weak industry-wide demand.
- The article opposes any bailouts for the AI industry, stating it is unworthy of protection and should be allowed to fail naturally.
- SoftBank is highlighted as systemically dependent on OpenAI, risking a liquidity crisis if the AI bubble collapses.
- The AI bubble is linked to multiple simultaneous bubbles: stock market, data center speculation, AI startups, private credit, and semiconductors.
- The piece calls for accountability from tech leaders and media, urging a rejection of bailouts and a critical examination of the industry's impact.
The AI Bubble Is No Ordinary Bubble
9 hours ago
- The AI bubble is driven by hyper-rich corporations, not retail investors, and occurs despite high interest rates, making it unusual.
- It consists of two overlapping bubbles: massive capital expenditure on infrastructure (data centers, chips) and soaring company valuations.
- Tech companies are spending over $700 billion on AI infrastructure, which is propping up GDP growth, but they need huge future revenues to justify valuations.
- The bubble could burst if AI companies fail to generate profits, if communities ban data centers, or if Chinese competition reduces computing needs.
- The insularity of the bubble means ordinary people are not directly participating, but they could still be affected through retirement funds, credit access, or job displacement.

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Even banks and hyperscalers are now sounding the alarm about the AI bubble

Let AI Burn

The AI Bubble Is No Ordinary Bubble