Milk Road AI The AI Bubble Fear Is Wrong... What the Market Is Missing w/ Duncan & Patrick
Dec 19, 2025
Duncan and Patrick uncover the reasons why fears around AI funding risks are overstated, revealing that much of the AI buildout is fueled by operating cash flow. They highlight compute and power as the real bottlenecks, not money. OpenAI is positioned as the pivotal player in future infrastructure demands. The discussion includes ambitious power buildout plans and how scaling improvements can enhance various real-world tasks. They also touch on the political implications of AI adoption and ongoing knowledge gaps in organizations.
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AI Buildout Is Largely Cash-Funded
- Most of the AI buildout funding comes from operating cash flows, not debt.
- Only ~10% is debt and large parts of that are investment-grade issuers like Meta.
CoreWeave/Oracle Are Tail Risks, Not Systemic
- CoreWeave and Oracle issues are small parts of the overall funding picture and often easy targets for hedges.
- Their risk largely depends on counterparty payments and GPU depreciation assumptions.
CoreWeave's Backlog Is Mostly Contracted
- Duncan describes CoreWeave's business model of multi-year GPU contracts with hyperscalers.
- He notes much of CoreWeave's backlog is investment-grade clients plus OpenAI exposure.