I'm Not Convinced the AI Bubble Exists

The author argues that the widespread belief in an AI bubble is not justified, noting that while AI companies have made unprecedented infrastructure investments totaling around $5 trillion, these are largely one-time costs rather than ongoing expenses. Once data centers are built, AI operations are highly profitable—Anthropic reportedly generates $2.08 in revenue for every $1 spent on compute—and companies can quickly reduce costs by eliminating free products and cutting research spending if needed. The author suggests that AI companies' massive valuations may actually be reasonable given their growth potential and profitability once infrastructure buildout is complete.