Ed Zitron

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The most obvious sign that we're in an AI infrastructure bubble is that every major company - Broadcom, AMD, NVIDIA - is now doing circular financing, backstopping cloud compute deals or guaranteeing $30bn in TPUs for Anthropic. www.wheresyoured.at/premium-the-silicon-valley-bubble-part-2/

The AI infrastructure bubble is entirely dependent on hyperscaler capex, and now Goldman Sachs' Rich Privorotsky has said that the first one to pull back on spending will be rewarded. There's no way out for NVIDIA if this happens. www.wheresyoured.at/premium-the-silicon-valley-bubble-part-2/

All of this is happening because all bubbles are inherently irrational. Silicon Valley has debased itself, abandoning the things that made it unique, in favor of reckless and near-theological exuberance. A pop can’t come soon enough. www.wheresyoured.at/premium-the-silicon-valley-bubble-part-2/

This was the final part of my two-part Silicon Valley Bubble series. Subscribing to my premium newsletter at $7 a month or $70 a year gets you a massive, 8k to 15k word piece every week, as well as the ad-free version of my free newsletter. It's the best value in tech analysis. wheresyoured.at

The CFOs of the AI bubble are propagandists, twisting and contriving measurements designed to mislead a credulous press and boosters alike using annualized revenues and other obfuscated metrics. www.wheresyoured.at/premium-the-silicon-valley-bubble-part-2/

The CFOs of the AI bubble will sign on to things that they, deep down, likely believe are impossible (like OpenAI and Anthropic's $1.1tr in commitments). When they push back, they get marginalized, like Altman did with CFO Sarah Friar. www.wheresyoured.at/premium-the-silicon-valley-bubble-part-2/

The AI bubble demands that CFOs use financial reporting as a promotional tool to beguile investors. For example, OpenAI is clearly putting billions of dollars of inference costs into its sales and marketing segment. www.wheresyoured.at/premium-the-silicon-valley-bubble-part-2/

The AI bubble - and the SaaSpocalypse narrative - is currently being used to cover up the collapse of growth in the software industry. "Disruption" lets them rationalize the collapse of an overvalued SaaS industry riddled with debt. www.wheresyoured.at/premium-the-silicon-valley-bubble-part-2/

The other watchdog subdued by the AI bubble is the CFO, which traditionally was the “adult in the room,” but has now turned into a kind of financial marketing arm that helps cobble together non-GAAP narratives to con investors. www.wheresyoured.at/premium-the-silicon-valley-bubble-part-2/