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Free newsletter: In July, Apollo Economist Torsten Slok said that "AI better work out, or we have a problem." Facing ever-growing high-interest debt, negative-EBITDA AI labs and $200bn+ in warehoused GPUs, that's exactly what the AI industry has. www.wheresyoured.at/ai-had-bette...

The AI bubble is now a global problem, with the highest ever inflows of foreign capital into US equities in history, at a time when when a handful of AI-exposed stocks account for a terrifying proportion of US stock market's value. www.wheresyoured.at/ai-had-bette...

Unlike previous bubbles, equities/stocks now account for the majority of household wealth (ahead of real estate), with economist Paul Kedrosky estimating that Americans hold over 60% of their liquid net work in stocks. www.wheresyoured.at/ai-had-bette...

Retail investors have an estimated $4.65tn in direct exposure to AI-linked stocks - not including index funds - and account for ten times more of the market's trading volume than the Dot-Com Bubble. I fear the damage will be far worse. www.wheresyoured.at/ai-had-bette...

As I've written extensively in the past, the AI bubble is nothing like the dot com bubble. The scale and concentration is different, and a simple 20% correction across the main AI stocks would be worse than the worst day of the Dot Com crash. www.wheresyoured.at/ai-had-bette...

The AI bubble is sustained by vibes and hype, and both have started to sour, with Gartner saying that we have more compute capacity than demand, and that 80% of neoclouds will go out of business by 2030, adding there's not enough revenue to justify them. www.wheresyoured.at/ai-had-bette...

AI is also concentrated around a handful of companies, most notably NVIDIA, which is forecasting over $670bn in revenue next year, at a time when the debt its customers need to buy its chips is increasingly unaffordable as lenders sour on AI debt. www.wheresyoured.at/ai-had-bette...

The GPU trade is the irrational core of the bubble, and the argument that hyperscalers are hoarding scarce commodities falls over when you see that *everyone* has billions in dark GPUs. NVIDIA seems to be channel stuffing, and we all suffer as a result. www.wheresyoured.at/ai-had-bette...

The AI bubble "working out" requires everyone to abandon reason and for a bunch of miracles to occur, like hyperscalers adding $1.4 trillion in cashflow by 2028. Analysts have no idea of where that money is coming. www.wheresyoured.at/ai-had-bette...

In fairness, the whole "abandoning reason" has seemingly already happened. This late in the bubble, there is no consensus on how much a gigawatt of capacity should cost, and many of the projections thrown around exceed the limits of profitability. www.wheresyoured.at/ai-had-bette...