We have the classic phenomenon where suddenly everyone decided it is good for your social status to say we are in an ‘AI bubble.’

Are these people short the market? Do not be silly. The conventional wisdom response to that question these days is that, as was said in 2007, ‘if the music is playing you have to keep dancing.’

So even with lots of people newly thinking there is a bubble the market has not moved down, other than (modestly) on actual news items, usually related to another potential round of tariffs, or that one time we had a false alarm during the DeepSeek Moment.

So, what's the case we’re in a bubble? What's the case we’re not?

My Answer In Brief

People get confused about bubbles, often applying that label any time prices fall. So you have to be clear on what [...]

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Outline:

(01:17) My Answer In Brief

(02:18) Time Sensitive Point of Order: Alex Bores Launches Campaign For Congress, If You Care About AI Existential Risk Consider Donating

(04:09) So They're Saying There's a Bubble

(05:04) AI Is Atlas And People Worry It Might Shrug

(05:35) Can A Bubble Be Common Knowledge?

(08:33) Steamrollers, Picks and Shovels

(09:27) What Can Go Up Must Sometimes Go Down

(11:36) What Can Go Up Quite A Lot Can Go Even More Down

(13:17) Step Two Remains Important

(15:00) Oops We Might Do It Again

(15:49) Derek Thompson Breaks Down The Arguments

(17:47) AI Revenues Are Probably Going To Go Up A Lot

(20:19) True Costs That Matter Are Absolute Not Relative

(21:05) We Are Spending a Lot But Also Not a Lot

(22:46) Valuations Are High But Not Super High

(23:59) Official GPU Depreciation Schedules Seem Pretty Reasonable To Me

(29:14) The Bubble Case Seems Weak

(30:53) What It Would Mean If Prices Did Go Down

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Narrated by TYPE III AUDIO.

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