The Circuit EP 129: Capex to the Moon 2.0! Bubble Debate, and QCOM and Arm Earnings
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Aug 4, 2025 Ben Bajarin and Jay Goldberg dive into the latest earnings reports from tech giants, raising questions about market bubbles and AI monetization. They discuss the fierce competition in the search market with potential disruptions from Apple and explore Nvidia's pivotal role in AI. The conversation shifts to ARM's earnings and custom chip development amidst rising royalty rates. Additionally, they navigate the intricate dynamics between major companies, highlighting SoftBank's acquisitions and their implications for the future of AI technology.
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CapEx Builds Digital Backbone
- Infrastructure CapEx today is around 1.2% of US GDP, similar to the telecom era but far below the 6% railroad era peak.
- This spending builds the essential digital industrial backbone for future monetization.
AI Investment Bubble Nuance
- We are in a bubble fueled by belief and emotion, but it is less extreme than dot-com or housing bubbles.
- This bubble may span 15 years as a large S-curve rather than a quick burst and crash.
Uncertain AI Monetization
- Monetization of AI infrastructure is unclear and remains a key question for investors.
- Companies spend heavily on GPUs with demand exceeding supply, but clear revenue attribution to AI is still missing.