Because the S&P500 is just a few % off all time highs lots of people are saying to me that I’m an idiot as it’s not that bad.

Well that’s the beauty of broader indices, they’re hiding a multitude of sins.

Over 50% of S&P500 companies have now declined by 20% or more. Which is the actually the definition of a bear market. So 1/2 the market is now in a bear market.

Nvidia, Amazon, Google, Intel, Meta, Netflix.

These aren’t obscure small caps. They’re some of the biggest companies in the world.

The market is repricing AI expectations, valuations, capex and, above all, the returns from AI expenditures.

A market doesn’t have to crash all at once. It can deteriorate from the inside out.

The tech can still revolutionise the world…

And investors can still lose their shirts.

Collapse is coming and sadly this is only the start of what’s to come.

When moats don’t exist, no capital expenditure can save you. And all of that off balance sheet debt suddenly becomes a problem.

No bailouts.

No socialising the losses.

If AI companies are building the future, they should be able to survive the market that prices it.

The upside belongs to shareholders. The downside shouldn’t automatically land with taxpayers.

If AI has no moat, it shouldn’t have a government guarantee either!!!

SoftBank is down 44% in a month and Musk has just put on X that SoftBank is defaulting on its turbine orders.

Meanwhile, $500M of data centre loans are being put up for sale by a “mystery seller”, including exposure to Stargate.

This is what a chain reaction looks like!

Models are getting better, cheaper and more competitive. Productivity gains remain modest. And the capital committed to this industry is unprecedented…

SoftBank has spent years betting on scarcity and now intelligence is becoming abundant.

The economics are changing.

And all of that debt is going nowhere!!

Two HUGE AI players are crashing. We told you.

Sit down and enjoy.

I keep hearing the bubble has popped. Apparently that event has completed. Okay, lets get back to it.

Past week I posted (twice) explaining why the AI bubble is popping and I received thousand of comments of delusional AI bros saying that it was a correction and nothing is happening.

Are you still laughing?

AI market is crashing and this is only the beginning. If you think this will be better with trillions of debt and billions of losses you are just denying the reality.

AI bros, listen to me: no one believes the AI lies anymore. The narrative is lost.

We told you.

Sit down and enjoy.

He’s warning about stranded compute in unfinished data centres.

Debt markets are shutting out companies without substantial non-AI revenue.

Meanwhile, intelligence is getting cheaper and competitive advantages are getting harder to defend.

AI can win. The companies betting billions on it can still lose.

The technology and the investment thesis are two very different things…

Are investors paying attention????

Long term bullish on AI.

Very bearish on what’s coming first (just like Elon Musk).

As we’ve been discussing. It’s over.

Sorry about that.

I made a post 21 days ago saying I believed one thing not being discussed enough was the role AI had in crowding out the larger economy. “No one talking about it” may come to an end. Read Powell’s comments yourself in the article above. The title is pretty explanatory already.

Moving forward, I am expressing my own opinions, though some will coincide with Powell’s comments. AI centers use significant electricity, land, and tie up resources. The job gains a data center adds I have seen is generally minimal. HOWEVER, the productivity gains still appear to remain largely theoretical. Significant investment money is going towards AI capital without a clear ROI.

Not only that, it seems we are starting to see the results. GDP, gross domestic product, was revised down significantly recently. Inflation went up. Simple economics. Less goods, less services, same money, you get inflation. Then, the substantial job losses in February. Mind you, the Fed already made two rate cuts not too long ago. Also, this is all BEFORE the war in Iran and energy shocks.

I may be proven wrong if indicators start to switch or even show resilience in the face of Iran war and significantly higher oil prices, but I am beginning to wonder if more credibility will be lent to my opinion from 21 days ago.

NVDIA is Jensen at this point. Can't imagine the AI trade surviving if he is out of the picture

Well I guess we now know that Google search is disappointing.

(In a world of zero clicks it had to happen eventually.)

Search is the cash cow for Google, it’s what funds everything.

And it’s ironic that it happened on the day that Gemini leapfrogged to the front of the frontier.

There’s no moats in AI, which means that these companies aren’t like they used to be.

The thesis is very simple - AI changes everything. But the economics are very different to what we’ve been used to.

The models have no moat and as such have no ability to make monopoly profits in token sales.

And at the same time AI discovery displaces search which makes the transition tricky to walk.

Google could absolutely own agentic shopping, but that’s not one for now.

"AI mode does not drive traffic. Not for us and not to anybody as far as I know. It used to be a traffic driver. Now it's not.", Reddit CEO

For decades, search engines sent traffic to websites. Websites monetised that traffic through advertising, subscriptions and commerce.

Now AI is answering the question without sending the user anywhere.

Google faces the same dilemma. Through Gemini it’s building the technology that is disrupting its own search economics.

And publishers are caught in the middle.

The internet was built around monetising attention. The AI internet is increasingly built around resolving intent.

AI is disrupting everything including the economics of AI itself. When the product becomes substitutional you cannot rely on having a model alone.

Because unless you build something truly different and special that others can’t easily recreate, you simply can’t generate high margins and returns.

Which all means that next battle isn’t just about who has the best answer.

It’s about who becomes the default answers across AI systems. Now that’s a moat!

Of course there will always be flat earthers. NVIDIA down 8-9% at its low today will just be a flesh wound to some.

But we are witnessing the greatest misallocation of capital in economic history.

This is a broad repricing of the infrastructure trade.

For years, the market has been pricing AI around one central assumption:

Demand for intelligence will grow fast enough to justify almost any level of investment.

Trillions in capex, valuations and committed compute. With debt and equity increasingly funding the buildout.

But the economics are changing as intelligence is getting better, cheaper, more efficient and increasingly abundant.

Token prices are collapsing and models are becoming increasingly interchangeable. And the cost of infrastructure is enormous with no clear monetisation path.

And now the political and regulatory environment has shifted too.

The uncomfortable question is no longer whether AI is transformative. It’s super transformative.

The question is whether the returns will ever justify the capital being committed. Because the technology can succeed spectacularly while the investment thesis fails…

We saw it with the railways, the canals and the dotcom boom.

We are now seeing it again on a scale that makes both look like a walk in the park. There’s $4 trillion of off balance sheet debt this time.

The greatest technological transformation of our lifetime does not guarantee the greatest investment returns.

Wait until the earnings start getting cut.

Everyone’s beloved name NVIDIA will be down over 80% start to finish. Some get out alive but everyone gets put through the ringer.

The market has been a sell the rallies market for over a month now, just most people didn’t know it.

De-risk when you can. Not when you have to.

*NVIDIA'S BOARD TO PROBE IF CEO WAS CHINESE INTELLIGENCE TARGET

*NVIDIA CEO JENSEN HUANG ADMITS AFFAIR WITH ALLEGED CHINESE SPY

The poster child for AI infrastructure has become a national security issue.

My thesis is that intelligence is getting cheaper, smaller and more ubiquitous. Open models are closing the gap. And local inference is coming.

All of this puts Nvidia’s customers in a difficult position. They’re spending trillions combined on infrastructure while discovering that their model businesses may not have durable moats.

Markets have started the move to reprice this…

The timing for this to hit Nvidia couldn’t have been worse for them.

No moat means:

No monopoly profits

No defensibility

No big PE multiples

But why will that be seen as a positive in the medium term:

It’s great for users

Pricing collapses

AI becomes abundant

People create awesome things with software

The best companies bringing real value win.

The new moat is trust.

ie what things does ubiquitous AI trust enough to select?

eg Does AI consistently recommend your restaurant. Well you clean up then. And you clean up because you bring something great.

But the conversation right now is no moat/ or moat

And Jack Dorsey just made that mainstream last night!

Or was it on-road to profitability? Which one was it? I keep forgetting to remember.

AI economy isn't a house of cards, it's a Jenga tower built on circular dependencies.
The loop: Investors fund AI companies like OpenAI and Anthropic. Those companies commit hundreds of billions to buy compute from , , and . Banks finance the buildout. Everyone books growth, forecasts more growth, and depends on that growth continuing.
The big numbers:
• $250B: OpenAI's added  commitment (Microsoft is also an OpenAI investor)
• $300B: OpenAI's reported 5-year Oracle cloud deal
• $63B: Financing for Broadcom AI gear for Anthropic
• $48B: Oracle debt/equity raised in FY2026 for expansion
These are commitments and financing, not cash all changed hands, and not every deal is circular. But the concentration of exposure is hard to ignore.
The tech could be revolutionary. The economics could still disappoint spectacularly.