What I heard on the ground floor from various system integrators, components manufacturers, and other companies, is memory supply has been tied up for all of 2026, and that shortages could last as long as until 2031.
Sure it’s scuttlebutt but wouldn’t surprise me as being true.
Even that isn’t going to be enough. OpenAI has to start making payments on some (most) of these deals and startups starting this fall. If they don’t make these payments (it’s mathematically impossible for them to do so) then everything gets wiped out and the bubble pops.
Pro tip to all you investors here, if your hot new thing can’t do anything other than net360 terms and has double-pledged collateral, it’s not a good investment.
As far as it being like the dotcom crash, at least the few companies that were actually viable and legitimate survived and it “separated the wheat from the chaff” or something along those lines.
There is no viable AI company here, and the market will quickly find out that there isn’t even chaff to be found here, it’s mostly floor sweepings of post processed MDF sawdust and dirt.
I suspect very creative firms of accountants and CFOs are working hard right this moment to identify the next step in the shell game. So I suspect some creative refinance could avoid that outcome. But I definitely hope you’re right.
Oh no it’s far worse than that. Private equity is heavily invested into data centers, and so are most large international banks. Private equity is playing the fun “volatility laundering” game where they are deliberately not reevaluating assets to make them look like they are worth more on paper than they actually are. They are basically saying this
assethouse is still worth the $50,000,000 it was valued at 5 years ago, never mind the fact it burned down and is now a superfund site and uninhabitable.International banks are also issuing loans based solely on “just trust us bro” paperwork, using the AI companies paperwork as gospel and not looking at anything other than what they are presented with. The average cost of renting a Blackwell CPU is now $4.41 an hour, and that’s before the vast majority of these data centers have even come online.
Something something supply and and demand just trust us tho.
Currently, with data from all AI compute companies and services COMBINED in 2025, revenue comes out to 0.5831% of expenditures.
So for every $1,000,000 spent, you will make $5,831.
The only way out of this mess is if the banks either get paid back for their loans (see previous figures) or private equity gets a lot more capital… and starts paying back banks again (see previous figures comment about previous figures)
As an additional note if I am right and this bubble pops (if a single startup goes under, literally any one) then it’s pretty much the collapse of the global financial system and an economic crisis at the level that the world has never seen before.
Literally, and I cannot stress this enough, the entire current system is built on the belief/sentence/mantra “number go up” with no regard for literally anything else.
Well, great. So looking at 2008 for the most recent model, I suppose that means government bailouts or subsidies using taxpayer money to save the companies and thereby prevent a complete collapse of markets?
Kind of? Except the lenders with the largest amounts of loans in order are: 1.Blue Owl (USA) (remember this company, it’ll be important as a canary probably) 2. Mitsubishi UFJ financial group (Japan) 3. JP Morgan Chase (USA) 4. Deutsch Bank (Germany) 5. BnP Paribas (France) 6. Morgan Stanley (USA) 7. Sumitomo Mitsui Banking Corporation (Japan)
So kinda like 2008 but you need (at the very least) Japan, Germany, France, the USA, and possibly South Korea to all coordinate and do bailouts cooperatively together to maybe have a chance.
Good thing we haven’t pissed off our allies or disrupted trade in general, and we also haven’t fucked with interest rates or bonds or anything so we have plenty of tools in our arsenal (god help us all, puts on all of our collective livers.)
There is no saving the AI companies because it is mathematically impossible for them to make money. You would have better luck investing in your local meth heads trying to make alchemy real using nothing but books published by Wizards of the Coast.