"Tech stocks sold off dramatically as the conference wore on, after 'Big Short' investor Michael Burry pointed out that some AI hyperscaler tech companies-including Meta and Oracle-were elongating the depreciation schedules of their AI capital expenditure (capex) to make their short-term profitability look more favourable. The Nasdaq Composite lost 2.3% yesterday. In addition, Oracle shares declined by 30% over the last month as investors rejected the company's plan to increase its debt in large part to spend more on AI chips."
"Yes, it's a bubble. The amount of venture capital investment and capex from large companies far exceeds the amount of revenue being generated by the AI companies that receive the funding-a classic bubble scenario. Yes, it's a bubble, but it's a good bubble. Great companies will emerge after there is an inevitable attrition of poor-quality competitors, this cohort argues."
Seventy-one thousand startup founders, venture capital investors, tech CEOs, and media gathered at Web Summit in Lisbon amid storm clouds as AI dominated conversations. Tech stocks fell during the conference after investor Michael Burry accused some AI hyperscalers, including Meta and Oracle, of elongating depreciation schedules for AI capex to improve short-term profitability, and the Nasdaq Composite dropped 2.3%. Oracle shares fell about 30% over the prior month as investors opposed plans to raise debt largely to buy AI chips. Conference attendees expressed three primary views: AI spending is a bubble; a beneficial bubble; or demand outstrips supply for AI infrastructure.
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