Don't Look Up

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• The current AI boom is an unsustainable “Rot-Com Bubble” where the growth of major hyperscalers (Microsoft, Google, Amazon) and NVIDIA’s revenue are precariously dependent on two deeply unprofitable AI labs, OpenAI and Anthropic.
• Analyst estimates reveal that 70% or more of hyperscalers’ AI revenues stem from OpenAI and Anthropic’s compute spending, projected to exceed $200 billion in 2027, which these labs can only afford by raising hundreds of billions in venture capital annually.
• Beyond these two AI labs, there is a “calamitous lack of demand” for AI compute and software, with Microsoft’s non-OpenAI AI revenue of approximately $10 billion annually being a “catastrophic failure” that fails to justify its massive capital expenditures.
• The illusion of demand is maintained through credulous media reporting, inflated stock prices, and “spherical” financing schemes, such as NVIDIA’s theoretical $500 billion Memorandum of Understanding (MOU) with private credit firms, which effectively involves NVIDIA backstopping its own GPU sales.
• This debt-fueled, highly concentrated spending cycle is destined to end, leading to “apocalyptic circumstances” for many involved when the unrealistic analyst expectations for AI revenue and compute demand are inevitably unmet.