💸 The AI Bubble: Where Is the Race Leading — and Who Will Pay for the Computing?
In early October, Bloomberg published an infographic that made investors' hands tremble: circles representing OpenAI, Nvidia, AMD, Oracle, and Microsoft interlock like a financial matrix. Investment flows loop in a closed circuit: OpenAI buys chips from Nvidia, Nvidia invests in OpenAI, Oracle pays Nvidia billions for those same chips — and then provides cloud capacity back to OpenAI.
The circle is closed.
Bloomberg called it the "AI bubble" — and not without reason.
What's happening: • OpenAI is valued at $500B — despite still being unprofitable • Nvidia became the world's most valuable company ($4.5T), with 90% of revenue dependent on AI hype • Oracle signed a $300B cloud contract with OpenAI while buying billions worth of Nvidia chips • AMD supplies GPUs and gives OpenAI warrants for 160M shares • Microsoft remains OpenAI's main sponsor while pushing Copilot and Azure AI
From the outside: explosive growth. From the inside: a web of circular deals inflating numbers without creating new value.
The bubble economics: If you take just three companies — OpenAI, Nvidia, and Microsoft — total investment and market cap in the AI sector exceeds $5 trillion. For comparison, the entire global cloud computing market is valued at around $800 billion. To break even within 3 years, AI company revenues need to grow 80–100% per year.
That pace is only possible through exponential user growth — or significant price increases. See where I'm going with this?
In human terms: The average paid AI subscription today costs $20–30/month, and roughly 20% of users pay at all. For the AI sector to recoup infrastructure and chip investments, average revenue per user needs to grow 2.5–3x. That means one of three things: 1. Subscription prices rise to $50–70/month 2. Users buy more add-ons (memory, integrations, API calls) 3. Companies shift costs to corporate clients — who pass them on to end users
Either way, we pay. Just indirectly.
Probable scenarios (1–3 years): • Soft correction (60%): moderate valuation drop, market consolidation, price hikes, some services exit • Bubble burst (25%): stock crash, project freezes, market contraction • Sustained growth (15%): real monetization and AI integration into business as an everyday tool
The AI revolution is real. But it's not magic — it's a very expensive business currently running on investor faith. If that faith isn't rewarded, the bubble bursts. If it is, we enter an era where AI becomes an ordinary daily utility.
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