Notes: AI Bubble? Spending, Risks, and Returns — A High-Level Assessment
Summary
* Hyperscalers’ AI capex is soaring past historical limits, forcing creative financing and intensifying scrutiny over ROI and long-term sustainability.
* Despite fears of an AI bubble, utilization remains high, demand is outpacing capex, and efficiency breakthroughs from Chinese labs are lowering compute costs while expanding practical use cases.
* The real bubble risk lies not in inference but in frontier training, where escalating $50B–$100B+ model cycles create leveraged exposure