Arthur Hayes Predicts AI Boom Will Lead to Overinvestment, Crash, and Crypto Bailout

AI Overinvestment Forecast

Arthur Hayes, co-founder and chief investment officer of Maelstrom, stated at the Gamma Prime Investing Conference in Singapore that humanity is "wasting multi-trillion dollars" on building AI data centers. He argues that this massive infrastructure buildout will make computing power "extremely cheap and extremely plentiful."

Historical Precedent for Tech Booms

Hayes draws parallels to past technological rollouts, asserting that they consistently involve overbuilding, a subsequent crash, and eventual bailouts. He suggests that investors who position themselves for these bailouts stand to gain, citing the 2008 financial crisis as an example.

Crypto as a Beneficiary

Hayes believes that cryptocurrencies, particularly Bitcoin, will serve to absorb the excess liquidity generated by future bailouts. He advises patience, anticipating that this outcome could occur around late 2027 or 2028, when much of the new data center capacity is expected to be delivered.

Current AI Profitability and Investment

Hayes noted that while end-users like SpaceX, OpenAI, and Anthropic are not yet profitable, some suppliers to the AI boom, such as memory chipmakers and Nvidia, are. He questions the valuation multiples for these companies' forward earnings, but does not advocate shorting AI companies.