Rebel Capitalist News Are We On The Brink Of An AI Bubble Stock Market Crash?
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Sep 29, 2025 The discussion kicks off with a warning about an impending AI spending bubble from investor David Einhorn, highlighting the potential for massive capital destruction. George compares exorbitant AI investments to high costs yielding low returns. He dives into the continuous expense of GPU upgrades, emphasizing the ongoing financial burden. The conversation also reflects on NVIDIA's significant influence on the S&P 500 and the risk of a broader asset price decline triggering a balance sheet recession. Speculation about possible government intervention to save struggling firms wraps up the intriguing insights.
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AI Build-Outs Might Destroy Capital
- David Einhorn and George Gammon argue AI spending math doesn’t add up and could destroy capital even if tech is transformative.
- They warn trillion-dollar infrastructure buildouts may not produce returns sufficient to justify the costs.
NVIDIA Replaced Enron In S&P 500
- Gammon notes with irony that Nvidia replaced Enron in the S&P 500 after Enron blew up in 2001.
- He uses this to suggest a darkly humorous historical parallel to current market excesses.
AI CapEx Is Recurring Not Durable
- GPUs become obsolete quickly, so AI firms may need repeated massive CapEx rather than one-time factory builds.
- That recurring spend makes the investment profile unlike traditional durable-capex industries.