The AI Demand Bubble
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A detailed financial analysis arguing that the AI industry's apparent growth is a mirage built on circular financing. Analyst estimates from Barclays, UBS, and Wells Fargo suggest that 70-75% of Amazon, Google, and Microsoft's AI revenues come from just two customers — OpenAI and Anthropic — both of which are deeply unprofitable and dependent on the hyperscalers themselves for funding. The piece contends that without these two labs, the big three hyperscalers have virtually no meaningful AI business to show for over a trillion dollars in capital expenditures. It warns of massive data center overbuild, misleading investor disclosures, and a fragile circular economy where hyperscalers fund AI labs that then spend that money back on hyperscaler compute.
