Investor raises AI bubble probability from 15% to 30% after SF trip, warns on capex funding

sebpaquet · x · 2026-10-24

After a recent trip to SF, the author moved his subjective probability of an AI bubble from 15% to 30%. Key points:

Smart people at Jane Street, HRT, OpenAI and Anthropic remain personally long and bullish, but technical brilliance and high pay don't guarantee good market judgment — pre-2008 banks employed the world's smartest people and still got their assumptions badly wrong.
The bull case is easy for him to make himself: recursive self-improvement toward ASI, agents creating a dwarfishly larger economy.
Quoted context: when AI CEOs say they're capital-constrained, investors should be at least somewhat bearish. The buildout's pace depends on who finances the next increment of spending — and if it exceeds hyperscalers' operating cash flow, the marginal outside investor likely doesn't share management's conviction, even though valuations already assume the spending happens.

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