Arthur Hayes believes that the current AI trend is misclassified.
In a recent essay, the co-founder of the cryptocurrency exchange BitMEX and the crypto fund Maelstrom argues that the ongoing development in AI infrastructure resembles the credit dynamics of 2008 rather than the earnings-focused narrative of the dot-com crash in 2000.
He explains that hyperscalers, which are companies with vast data centers, are taking out loans against their rapidly depreciating chip inventories. Lenders mistakenly consider these investments as technology financing, when in reality, they resemble real estate investments.
According to Hayes, the tipping point will occur when capital expenditures cease their upward trajectory, which he anticipates will happen between late 2027 and 2028. Similar to the mortgage boom leading up to 2007, credit will continue to flow even after this point, until the most vulnerable AI-related debts begin to falter, affecting those heavily leveraged.
Hayes predicts that both Washington and Beijing will intervene to mitigate the fallout for national security reasons, potentially injecting more liquidity into the market than they did during the 2008 crisis. He believes this influx of cash could help stabilize Bitcoin and push its value towards $1 million.
In the short term, he views the recent selloff in AI stocks, including leveraged positions in South Korea, as a mere correction within a broader bull market.
As of Wednesday, Bitcoin was trading at approximately $64,200, remaining stable for the week and continuing to oscillate within the range it has maintained since May.