I think you can argue that AI is going to explode and take over the economy, and it’s still a bubble.

I think one possible route is that cloud capacity just becomes totally commoditized and none of the hyperscalers will be able to extract the kinds of profit margins that would allow them to make a good return on their investment (model makers will fall victim to this too). Ultimately, what may happen is that market competition for everything explodes since AI and robots can do all the work, prices for everything (goods, services, assets) collapses, and no one is really any richer than anyone else.

Even if the AI frontier becomes "totally commoditized" it will still be reliant on a scarce factor, namely leading-edge chips. Chipmakers will ultimately capture that value, because competing it away would require expanding the industry and that's a very slow process involving billion-dollar expenses planned far in advance (multiple years, and that lead time can only expand further as the required scale gets even larger).

Except you're neglecting the fact that LLMs can become more efficient.

The magical thing about software is that efficiency gains can come pretty quickly relative to other industries.

We're already seeing this with Qwen 3.5 and Gemma 4. They're better than GPT-3.5 and they run on smartphones and old laptops.

AI being a bubble it's not mutually exclusive of being a real and useful technology and the existence of non-snake oil companies.

Cisco was a bubble in the dot com crash, despite being a company that provide real value and profit, just not at the level of the crazy expectations from the time.

I'm literally talking about the fact that Anthropic is making $30B Annual Revenue, which is the result of less than $10B investment two years ago.

The public hasn't seen the insane ROA/ROI on GPUs. So all AI adjacent stocks are massively undervalued.

I’m not sure your numbers are accurate, they raised $13bn in funding in September last year. Also do note that a lot of the money is cross-subsidized by Google who is funding the TPUs as an investment, so I wouldn’t be so confident that they are returning money quite yet (though it does seem that Anthropic might make it).