In this week’s episode of the Untangling Web3 podcast, we tackle one of the biggest narratives dominating tech and global markets right now: the so-called AI bubble.

With headlines predicting an imminent crash in artificial intelligence stocks and skepticism mounting around LLMs, the hosts unpack whether we’re witnessing genuine over-exuberance, or simply the growing pains of a transformative technology.

Drawing on real market signals, user adoption, and infrastructure realities, this episode cuts through the hype to examine what’s really going on beneath the surface

Key Points Discussed:

• Why People Are Calling It an AI Bubble: The episode explores the core arguments behind the bubble narrative, including sky-high valuations, heavy reliance on a handful of AI-driven tech stocks, and the dominance of companies like Nvidia in propping up broader markets. Alec and Jack discuss concerns around circular investment models, where capital flows between AI companies and hardware providers, raising questions about whether real value is being created or simply recycled on balance sheets.
• The Reality of AI Adoption and LLM Progress: Despite investor anxiety, the hosts highlight a stark contrast at the product level: LLMs are improving rapidly and becoming deeply embedded in everyday workflows. From replacing search to enhancing productivity, AI tools are delivering tangible value to consumers and businesses alike. The conversation emphasizes that while enterprise-level ROI may take longer to materialize, dependence on AI systems is already a reality—and unlikely to reverse.
• Hidden Risks: Chips, Energy, and Global Dependencies: Beyond market sentiment, the episode dives into structural risks that could act as real pressure points for the AI boom. These include reliance on a single chip manufacturer (TSMC), rising energy and water demands from data centers, and geopolitical tensions between the U.S. and China. Unlike valuation debates, these are physical constraints that could trigger disruption regardless of how strong AI demand remains.

Is there an AI bubble? Possibly—but not in the simplistic way the headlines suggest. While a short-term correction in tech markets may be inevitable, Alec and Jack argue that artificial intelligence itself is here to stay.

The real story is one of scale, infrastructure, and timing: massive long-term bets paired with very real near-term constraints. Whether markets cool or surge next, AI and LLMs are already too deeply woven into the digital economy to disappear.

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Untangling Web3 is brought to you by hosts Jack Davies and Alec Burns, with music by Daniel Paigge. Got a question or topic suggestion? Send us an email at [email protected].

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The views we express here are our own, and do not represent the views of our employers. Nothing discussed or stated in the show should be considered advice.