I keep reading about an AI bubble. Every week there is a new piece warning that the spending is out of control and the crash is coming. The numbers sound crazy. Microsoft alone is on track to spend more on data centres this year than the entire global cloud market spent five years ago.
But here is the thing. The money is not stopping. It is accelerating. The latest earnings calls from the big three cloud providers showed combined capex up 45% year on year. Nobody is blinking. They all say the same thing. Demand still exceeds supply and they cannot build fast enough.
The bubble argument misses the shift that happened. This is not 2021 where everyone piled into speculative tokens. The money is going into physical assets that power a service people are actually paying for. OpenAI is on a $10bn revenue run rate. Copilot is generating real license revenue. The hyperscalers are not building for hype. They are building because their customers are asking for GPU capacity they cannot fill.
Could the cycle turn? Yes. If the next generation of models fails to improve or if enterprise adoption stalls. But that is a slowdown risk, not a bubble burst. The buildout is funded by actual operating cash flow from massive companies. They can take the hit.
The air will come out of the overheated private startups long before the concrete towers stop going up.
Paul