Aug. 29 at 12:46 AM
$NVDA $MRVL $AMD $INTC $MU
Whatever your take on the AI bubble debate, it's worth hearing both sides. Altman, Jensen, and Dario say incredible things about AI's future, but they need to be taken with a grain of salt. On the skeptic side, the loudest voice isn't Michael Burry (one hit wonder, in my view), it's Ed Zitron. Agree with him or not, he's clearly done the homework on AI economics. He may cherry-pick data to fit his narrative, but his points on customer concentration (for both Nvidia and the hyperscalers) are hard to dismiss. This might be his best video yet, and it may explain why Nvidia gave back most of its gains after that blowout earnings call on Wednesday.
I don't think the circular financing here is anywhere close to the 90s telecom bubble (vendors like Cisco and Lucent loaning money to startups who then used it to buy their gear, inflating vendor revenue until the startups defaulted en masse). But it's not a great sign that hyperscalers are tapping debt markets and going cash-flow negative just to keep paying Nvidia. It all comes down to debt, and that's why I think potentially rising interest rates are something to keep an eye on for the AI trade.
This video below isn't short, but it's worth a watch this weekend. I'm still a long-term AI bull, but that doesn't rule out a correction at some point in the future. The internet ended up bigger than even the wildest dot-com bubble era predictions, and we still got a brutal bust that took years to recover from.
https://youtu.be/k44OmbYqLzk
