Jesse Felder: The AI ‘Bubble of All Bubbles’ Is About to Hit Reality

Nov 17, 2025

Jesse Felder, founder of The Felder Report, discusses the current AI market dynamics, describing it as a 'Frankenstein bubble' merging past financial crazes. He highlights how private losses at companies like OpenAI inflate Big Tech profits and critiques the sustainability of the AI business model. Felder warns against record leverage in the market, suggesting a rapid downturn is imminent. He explores the fragility of the underlying economy and advocates for investing in real assets like energy stocks amidst looming risks.

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INSIGHT

AI Is A Frankenstein ‘Bubble Of All Bubbles’

The current AI surge combines dot-com style tech hype, housing-style finance excess, and retail mania into a "bubble of all bubbles."
Jesse Felder argues this synthesis lacks fundamental revenue to justify massive AI spending.

INSIGHT

Private Losses Are Propping Big Tech Earnings

OpenAI and Anthropic losses are inflating hyperscalers' earnings as they fund massive buildouts.
Felder warns those private losses mask an unsustainable economics where queries lose money on a per-transaction basis.

INSIGHT

AI Unit Economics Lose Money Per Query

OpenAI's unit economics currently lose money on every query, so scale alone must compensate.
Felder says a crash in compute costs may be the only path to profitability for such models.

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AI stocks have powered markets higher, but Jesse Felder argues we’re now entering the final stage of what he calls a “Frankenstein bubble,” combining elements of the dot-com boom, the housing bubble, and today’s unprecedented speculation into a “bubble of all bubbles”. In this wide-ranging conversation with Maggie Lake, Jesse explains why generative AI economics are fundamentally broken, how OpenAI’s massive losses are artificially boosting Big Tech earnings, and why the AI boom is unlikely to deflate slowly due to record leverage across margin debt, options, and leveraged ETFs.

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Chapters:

1:07 - Is Today’s AI Mania the ‘Bubble of All Bubbles’ in Tech?

3:03 - What’s Changed Now in the AI Trade After So Many Blowout Earnings?

6:02 - Could OpenAI Survive the Very Crash It May Be Engineering in Compute?

12:14 - In an AI Bust, Do Big Tech Titans Still End Up the Winners?

15:50 - Why Would Berkshire Hathaway Tiptoe Into Google at This Stage?

17:24 - If AI Isn’t ‘Too Big to Fail,’ How Painful Could an AI Bust Really Be?

21:05 - Are AI Skeptics Just ‘Tech Bears’—Or Are Valuations Truly Detached?

24:33 - Would a Bursting AI Bubble Bring Deflation—or a Different Kind of Shock?

30:24 - How Resilient Is the Real Economy If the AI Wealth Effect Vanishes?

34:27 - Can Policymakers Navigate Inflation, Populism, and an AI Bust at the Same Time?

42:51 - ⭐️Wealthion Golden Nugget: With So Much Market/Macro Risk, What’s Investable?

45:34 - Should Investors Own Commodities Directly or Ride the Move Through Equities?

47:19 - Are Critical Minerals the Next Big Opportunity—or a Geopolitical Minefield?

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