I love when Michael Burry comes out of his bunker and rolls a hand grenade into the latest bubble party. Of course AI and the billionaire promoters of this bullshit have created a massive bubble on par with the Telecom, Dotcom, and Housing bubbles before it. Nvidia and Palantir are Enron and Nortel of today’s bubble. Fraud and hype drive all bubbles, and this is no exception. This is Michael’s new BIG SHORT. And he will be right. All bubbles eventually meet their pin. But remember the pain Burry endured before his last Big Short proved to be right.
OpenAI, xAI, Mistral, etc., don’t need 6–10 gigawatts of GPU to serve consumers. They’re not building user platforms. They’re building infinite training sinks where they can burn investor dollars in real-time on Nvidia clusters, while claiming “AGI progress.”
•You’re not paying for finished goods you’re paying for ongoing compute consumption, and that consumption is the product.
•Every dollar raised goes to burn GPUs
•Every GPU burned gets turned into a higher valuation.
•Valuation justifies more raises.
•More raises justify more compute.
This is circular value creation burn → raise → burn → raise. It mimics product momentum, but it’s 100% synthetic.
And Nvidia = The New Central Bank of Silicon Valley
Nvidia is no longer just a hardware company it’s acting like a shadow central bank, injecting liquidity into the system by offering compute in exchange for optionality, influence, or future stake.
•Nvidia “invests” $100B into OpenAI? That’s not equity altruism it’s forward-guaranteed CapEx demand.
•Nvidia funds or supplies CoreWeave, Figure, Mistral why? Because Nvidia isn’t just selling chips, it’s selling an entire monetary substrate to which the AI ecosystem is tethered.
GPU allocation is now a monetary instrument. It’s how influence flows. It’s the new capital issuance.
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And CapEx Is the Collateral l Not the Output
OpenAI’s $500B valuation? That number is not backed by product revenue. It’s backed by:
•Future GPU burn.
•Option deals with AMD and Nvidia.
•Exclusive compute agreements with Microsoft and Oracle.
•Perceived AI dominance if CapEx continues indefinitely.
It’s not what OpenAI builds it’s what OpenAI commits to spend that drives value.
This flips capitalism on its head:
•Normally: You build value → reinvest capital → scale.
•Now: You raise money → burn CapEx → get value.
This model only works as long as someone believes the future revenue is “inevitable.” The second revenue misses expectations? The entire thing is exposed as CapEx leverage cosplay.
The Ultimate Grift: Renting “Time to AGI” as a Business Model
The illusion of “approaching AGI” is being used as a derivative product. Every startup is now selling some variant of:
“We’ll be the first to reach AGI, and every GPU we consume brings us closer. So fund us to burn more compute faster than the next guy.”
This is the equivalent of Wall Street selling volatility not real returns, just exposure. And the thing they’re selling is the future probability curve of artificial general intelligence, not a product that makes money today.
The longer they can rent belief in AGI’s approach, the more liquidity they can extract without delivering anything of substance.
And the beautiful part for them?
Nobody knows what AGI looks like.
There’s no finish line.
Which means: The burn never has to end.
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That public markets will one day absorb these valuations through IPOs or acquisitions.
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