The AI Infra Paradox: Compute is Simultaneously Scarce and Overbuilt
Ahmad_Al_Dahle · x · 2026-07-30
Addressing the ongoing debate over AI capital expenditure (capex) and potential bubbles during earnings season, the author presents a paradoxical view: current AI infrastructure is simultaneously experiencing a severe compute shortage and being overbuilt.
Bears argue that the four largest hyperscalers planning roughly $725 billion in capex for 2026 (up 77% YoY) signals a massive bubble. Bulls point to sold-out capacity as destiny. The author notes that both sides are looking at the same reality through different time clocks. Because capex is highly visible while returns are scattered across future products and margins, the debate over AI investment is unlikely to die down anytime soon.
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