🔮 Everyone’s looking for a bubble. No one sees the stampede.
The boring phase is coming to an end…
Five months ago, we offered the only evidence-based framework to answer the question that was taking way too much space: is AI a bubble? To get to the bottom of it through evidence rather than vibes, we tracked the five areas we believe are crucial to understand the AI investment cycle. Our indicators are: economic strain,1 industry strain,2 revenue momentum,3 valuation heat,4 and funding quality.5
Our analysis at the time – contrary to many alarmists – concluded that generative AI is a boom, not a bubble. But at the core of our approach is evidence. If evidence changes, we change our minds.
The Financial Times has published over a hundred articles invoking the “AI bubble.” Michael Burry, the famed hedge fund investor, disclosed shorts on Nvidia and Palantir, hardening his view earlier this year: “almost all AI companies will go bankrupt, and much of the AI spending will be written off.”
Fund managers surveyed by Bank of…