I've seen a lot of talk about the "AI Bubble" the past year.
So I did a few hours of research one afternoon & made this presentation.
Note that I made this presentation a week before the 10% market correction & China's AI bubble crash.
bubble
At the end of the day, it seems like the days where any public investor can earn huge returns on the hottest startup seem to be disappearing, as most of the value is earned in the private market.
The weakest links are definitely the companies that simply buy GPUs to rent out via debt, the next weakest link would be the AI Labs like Anthropic & OpenAI with huge spending commitments. The strongest links are Big Tech companies who can use their Free Cash Flow to finance Data Centers, although even they're starting to run negative on those as CapEx just grows faster than their Operating Cash Flow.
Whether we're in a bubble really just depends on your belief in the technology to justify the amount of investment, although I personally think we'll be seeing even more market correction than we've already seen. I sure hope it doesn't crash (40%+ plunge) like it did in China as that's bad for everyone. Hope this information helped though.
I'm not a financial analyst but just a 21 yr old interested in tech, so take my explanations with a huge grain of salt as I might be wrong.
So I did a few hours of research one afternoon & made this presentation.
Note that I made this presentation a week before the 10% market correction & China's AI bubble crash.
bubble
At the end of the day, it seems like the days where any public investor can earn huge returns on the hottest startup seem to be disappearing, as most of the value is earned in the private market.
The weakest links are definitely the companies that simply buy GPUs to rent out via debt, the next weakest link would be the AI Labs like Anthropic & OpenAI with huge spending commitments. The strongest links are Big Tech companies who can use their Free Cash Flow to finance Data Centers, although even they're starting to run negative on those as CapEx just grows faster than their Operating Cash Flow.
Whether we're in a bubble really just depends on your belief in the technology to justify the amount of investment, although I personally think we'll be seeing even more market correction than we've already seen. I sure hope it doesn't crash (40%+ plunge) like it did in China as that's bad for everyone. Hope this information helped though.
I'm not a financial analyst but just a 21 yr old interested in tech, so take my explanations with a huge grain of salt as I might be wrong.
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