Is AI’s Circular Financing Inflating a Bubble?

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If I ever get Alzheimer's or dementia, A.I. might be useful, but until then, I will rely on my own God-given intelligence, for it has served me well so far… Use it or lose it.

You are brilliant, Mr.Boyle.

No such thing as "artificial intelligence"…it's an evolution of the internet search engine, with a language algorithm (LLM), running on graphics chips grafted on, giving it audio-visual capabilities.

That stab at Errol musk. (If you don’t know who he is, he is Elon’s father in-law.

5:16 I see what you did there 😂

Thanks!

And not even the decency to give you a reach-around…

It's a circle jerk and it's anyone's guess who the pivot man is!

I'm looking forward to the GPU glut when it all comes crashing down 😁

While it is true that the overvalued companies today do have earning it's important to note that the money doesn't come from ai. Also more importantly, many people feel like ai is being forced on them, myself included, in the past not giving customers what they want hasn't payed off

Weird how the climate change threat from fossil fuels has completely disappeared after the same players that profited from green energy and pushing the climate change hoax, have pivoted and are chasing a much higher return from AI, despite being acutely aware that their gargantuan Data centers are leaving behind larger carbon footprints in just a few years, than fossil fuels have in the past 150.
Consumers living close to these huge noisy smelly and air polluting data centers are reporting increases in their electricity bills of over 300%, with many suffering sleep deprivation due to the continuous hum emitted by the thousands of CPU operating at 100% capacity 24/7 in their backyards, and complaints fall on deaf ears because local municipalities are getting paid $ millions to host the big Tech giants in their backyards bringing much needed revenue for their towns and districts.
Raise your hand if you’re sick and tired of being taken advantage of, and lied to by your govt, big tech, big Pharma and big business.
🤚

This cooking up will effect banks whove financed these companies all bad news coming

video's worth liking just for the plug cord joke

Robinson and Crooks both suffered from AI Psychosis and they’re hiding it to protect the stock market

wait, so nvidia is giving away free chips to AI, but consumerVideo cards are 1,000 + bucks?

AI bros are the worst crooks in the history of mankind.

The Hollow Boom Thesis: A Structural Economic Shift

The core argument of the Hollow Boom thesis (mine) is that the shift to generative AI is initiating a structural, non-discretionary CapEx cycle. This cycle functions as a massive economic transfer: trillions of dollars in future corporate labor costs (OpEx) are converted into immediate, high-margin revenue streams for a small, concentrated group of AI infrastructure and software mega-corporations.

The fuel for this enormous, multi-year surge, "The Hollow" is the $1.2 Trillion in annual exposed US white-collar wages that AI capabilities are poised to automate. This capital pool funds The Boom for chipmakers and solidifies The Moat of software giants, representing a permanent shift in economic value.

The Capital Waterfall: A Three-Step Value Flow

The $1.2 Trillion in potential US corporate labor savings flows through a clear, three-step economic roadmap, defining the primary financial outcomes and beneficiaries:

The Hollow (The Funding)

AI capabilities expose approximately $1.2 Trillion in annual US labor value (OpEx) to potential automation. This creates immense Corporate Cost Pressure, incentivizing companies to invest heavily in AI to capture these savings and expand margins. The Corporate Customers are the initial beneficiaries of these potential, realized savings.

The Boom (The CapEx Spend)

To deliver the necessary AI compute power, Mega-corps (primarily Cloud Providers like Microsoft, Google, and Amazon) must front-load massive capital investment. This spending triggers a Hardware Sales Boom, with global CapEx on AI servers and semiconductors forecast to reach approximately $600 Billion by 2026. The primary beneficiaries of this spending are the Chipmakers (NVIDIA, ASML, Broadcom).

The Moat (The Value Capture)

The Cloud and Software Giants then monetize this new capacity by embedding high-margin AI features into their platform ecosystems. This results in Recurring Revenue Capture, with global revenue for AI Application Software forecast to reach approximately $270 Billion by 2026. The ultimate beneficiaries of this recurring revenue are the Software Mega-corps (Microsoft, Google, Salesforce).

Mega-Corp Players: Spend, Gain, and Mechanism

The core beneficiaries are divided into two tiers, with their collective revenue gains directly linked to capturing a fraction of the $1.2 Trillion "Hollow."

The Infrastructure Tier (The Boom)

These companies benefit from the accelerated CapEx cycle required to build and power AI data centers, capturing approximately $600 Billion in annual global hardware spend.

Chipmakers (NVIDIA, Broadcom, AMD, ASML) benefit through a monopoly on advanced silicon (GPUs) and specialized manufacturing equipment (EUV) necessary for training and deploying large AI models.

Cloud Providers (Internal), including Google, Microsoft, and Amazon, benefit by leveraging their own chips (TPUs, Inferentia) for internal savings, but their massive spending on GPUs is also their primary Cost of Goods Sold (COGS), which enables them to eventually capture the high-margin Moat revenue.

The Software Tier (The Moat)

These companies capture a productivity premium (ARR) from the customers realizing the OpEx savings, monetizing approximately $270 Billion in annual global software revenue.

Productivity Software giants (Microsoft Copilot, Salesforce Einstein, Adobe, Google) establish an "AI Tax" by charging a new premium (e.g., $20–$30 per user/month) for AI functionality embedded into existing enterprise suites (Office, CRM, ERP). This revenue premium is a direct capture of the value created by The Hollow.

Stock Benefit Analysis: The Investment Rationale

The thesis provides a powerful rationale for investing in the core players due to two durable drivers:

Durable Growth & Revenue Re-Rating: The new revenue streams from the AI Moat and Boom are structural, not cyclical. Because the $1.2 Trillion pool of savings is a permanent economic shift, investors apply a higher valuation multiple (P/E) to these companies, viewing their earnings as more sustainable and high-growth.

Margin Expansion:

Chipmakers (NVIDIA) maintain premium pricing and generate massive gross margins (around 70%) due to high demand for their specialized hardware.

Software Mega-corps (Microsoft) generate exceptional profit margins. While initial CapEx is required to buy chips, the AI features have near-zero marginal distribution cost. Charging a $360/year premium on an existing user drives record operating profit.

Hollow-Driven Cash Flow: As corporate customers realize the $1.2 Trillion in OpEx savings, they gain more internal cash flow. This cash is either returned to shareholders or immediately re-invested back into AI projects, creating a powerful, self-reinforcing virtuous cycle of capital deployment back to the Mega-Corps.

In reality, these transactions are the standard financial engineering required to fund a new industrial revolution. The economic driver is the massive, non-negotiable $1.2 Trillion opportunity (The Hollow) for corporate efficiency, which guarantees demand for the chips (The Boom) and the software (The Moat), making the AI market a structural growth story, not a debt-fueled bubble.

Of course the losers are the middle class. The workers that are displaced.

SOURCES:

MIT Iceberg Index Study (November 2025): https://iceberg.mit.edu/report.pdf

Oak Ridge National Laboratory Reports: Reports:https://www.ornl.gov/content/technica…

Bureau of Labor Statistics: https://www.bls.gov/web/empsit/ces_cps_trends.htm

Yes

crimes against humanity such as this should result in firing squad execution

One thing that kinda is good to know hyperscalers will make the money back remember if they cant rent out the gpus they can always rent own cpu/ram for cloud usage

We are in the Age of Bullshit.

Bubble is correct.

Hi Patrick – Nvidia looks a lot like the insurance firm AIG did before the 2–9 financial crisis where AIG unbeknownst to everyone was the spider at the center of a huge derivatives spider web of interconnected deals. The only real "outside" money will be government backstop funds when all this goes south.

honestly this shit can't implode soon enough. Hope it will crash soon and crash so hard it will wipe the entire Silicon Valley / "big tech" slate completely clean, burn it all down to the tectonic plate. These billionaire freaks have grown too fat and too bold with their stupid social engineering "longtermist" dream projects and need to be taught a gruesome lesson.

It’s musical chairs. I wonder who would not have a chair when the music stops

It is kind of the definition of a bubble.

Chat Replay is disabled for this Premiere.

The US is literally burning itself to near death just so that a few of obscenely rich dudes try to pitch an algorithm that tricks morons into believing that it's thinking

"Nvidia, which makes computer chips that are essential to building artificial intelligence, said on Wednesday that its QUARTLY PROFIT had jumped to nearly $32 billion, up 65 percent from a year earlier and 245 percent from the year before that."

The frightening thing is that these computer chips will be redundant in a few years just the same as iphones are, because technology marches on and it is obvious that todays chips are yesterdays chips….Just see the history of chip design and evolution…

A perfect example. The iPhone 15 makes the iPhone 14 seem dated, which makes the iPhone 13 feel ancient. This is driven by:

MOOTE'S LAW (in spirit): The observation that chip performance roughly doubles every two years while costs fall. This creates a built-in expectation of rapid improvement.

ARCHITECTURAL SHIFTS: It's not just about making the same chip smaller. New designs (like the move from CPU to GPU to, now, NPU) create massive leaps in efficiency for specific tasks.

THE SOFTWARE/ HARDWARE CYCLE: New software (like complex AI models) demands more powerful hardware. That new hardware then enables even more ambitious software, which again demands better hardware. It's a self-perpetuating cycle of obsolescence.

Guess what will happen within a few years?

What could go wrong with circular finance? This is the best financial idea since sub prime derivatives. Here we go again thanks to Capitalist Maniacs!

China is moving in on its chip manufacturing of high end chips to end the NVIDIA chip market by 90%

NVIDIA will demand a GOVERNMENT BAILOUT in the next year or so when the Interest ON THIER LOANS IS GREATER THAN WHAT REVENUE THEY MAKE.. THIS IS LOOTING AND A SHAM.

they are all taking on DEBT and LOANS to service the cirular finance like a snake or octupus it looks like a SHAM.. because at the end of the day, they must have REVENUE that they DO NOT HAVE..

And as we all know..If it fails,U.S. Taxpayers will foot the bill.

Getting AI for free? I pay $200-300 per month for home usage. What are you even talking about.

Maybe you should research what AI is successfully used for in life and work before handwaving it all away with "funny videos".

Can’t wait for the trump administration to bail them all out and put the final nail in my chance for retirements coffin.

This video was a goldmine for me. Made a neat profit by shorting NVDA shortly before the Thursday crash and cashing out the same day. Thanks Prof!!!!!

22:00 AI will build its own power plants.

Ponzi?