Former BitMEX CEO Arthur Hayes has expressed concerns that the current artificial intelligence (AI) boom is leading to a massive overinvestment in data center infrastructure, with 'multi-trillion dollars' being spent on building AI data centers globally [1]. Hayes, who is also the co-founder and chief investment officer of Maelstrom, stated at the Gamma Prime Investing Conference in Singapore that this buildout will eventually result in computing power becoming 'extremely cheap and extremely plentiful' [1].
Hayes predicts that the AI sector is following a familiar pattern seen in previous technological rollouts: excessive investment, followed by a crash and a subsequent bailout. He believes that the critical test for the AI industry will occur in late 2027 or 2028, when much of the new data center capacity comes online and customers, such as SpaceX, OpenAI, and Anthropic, are required to fulfill their compute commitments. Hayes noted that these companies are currently not profitable, raising questions about their ability to pay for the infrastructure they have committed to [1].
In Hayes' view, the aftermath of a potential crash could see excess liquidity entering the market, which would benefit Bitcoin and other cryptocurrencies. He cited historical precedents, such as the 2008 financial crisis, where bailouts led to asset price surges, and suggested that investors who position themselves for such bailouts could profit. Hayes emphasized, 'Thankfully, we have bitcoin and other crypto to soak up that excess liquidity, and so we know the asset that's going to perform the best when the bailout comes,' but cautioned that patience is required [1].
Despite his bearish outlook on the AI infrastructure buildout, Hayes acknowledged that some companies supplying the AI boom, such as memory chipmakers and Nvidia, are already profitable. However, he questioned whether investors are paying appropriate multiples for these companies' future earnings. Hayes also stated that he does not favor shorting AI companies, describing it as 'not really a great investment opportunity,' but reiterated that major technological rollouts are typically overbuilt [1].
Hayes offered a potential bullish scenario, suggesting that if AI becomes 'so useful' over the next 12 months that demand increases significantly, AI companies could achieve profitability, which would alter the current outlook [1].
CONCLUSION
Arthur Hayes forecasts that the ongoing AI infrastructure boom is likely to result in overcapacity, a market downturn, and a subsequent bailout, which could drive significant gains for cryptocurrencies. While some AI suppliers are currently profitable, Hayes urges caution regarding valuations and suggests that patient investors could benefit from future market shifts.