Over the weekend, SpaceX CEO Elon Musk issued a stark warning: investing in AI cloud computing companies is ill-advised and could result in “guppy-level death and consolidation.”
Analysts have been raising concerns that leading hyperscaler CoreWeave could soon collapse under its own weight, pointing out that it’s taken on over $50 billion in debt, while burning through cash at an alarming rate.
It’s a familiar line of thinking as fears of the AI bubble bursting continue to haunt investors, a potentially doomsday-level economic event that could send ripples across the entire global economy.
And despite the enormous amounts of money that keep being poured in, an actual return on investments remains a distant dream. One major reality check, as Apollo Global Management chief economist Torsten Slok argued in a note over the weekend: outside of the tech industry, AI has yet to deliver on any meaningful economic advantages for businesses — amounting to what he called “zero financial payoff.”
