This is my view on the whole *AI Bubble* thing.
Think about how a classic gold rush works.
* At first the money is made selling shovels.
* But for a gold rush to be sustainable miners have to start digging up actual gold
* The value of gold have to be worth the investment they put into buying shovels.
* Otherwise, the gold rush is just a bubble.
So where are we now? Looking at [this chart](https://x.com/EugeneNg/status/2070829981043970394) ^((from Exponential Views, posted by Eugene Ng on X)) , we see that three years since the ChatGPT moment, over 80% of all the money in this industry is still sitting right at the bottom layer.
Right now, a lot of people look at the latest cloud earnings from Google, Microsoft, and Amazon and think **gold was found**. But I see it a bit differently.
IMO, cloud isn't the gold. The hyperscalers are just the modern version of equipment suppliers who are leasing out heavy machinery, power and resources to the miners.
Lets also not forget the circluar financing where the reported cloud growth is just them funding the AI Labs, which those labs immediately hand right back to rental compute.
Personally, **I don't think AI is a bubble yet.** The technology is real, and the initial capex cycle is to be expected. But for this boom to be sustainable, value has to move up the stack fast.
Curious to know what you guys think.
P.S. I'm not exactly a expert on the AI field. But I done my due diligence studying the technology.