What is AI bubble 2025?
Friends, there was a .COM bubble, and now there is an AI bubble.The only difference is that the .COM bubble crashed in 2000.In this crash, the NASDAQ fell 80%.
If we talk about NASDAQ, then a dangerous bull run is happening. The difference is that it hasn’t crashed yet. And nobody knows when this crash will happen.
There is no doubt that there is an AI bubble. In this article, I will prove that there is an AI bubble.
In a bubble, the only thing is that we don’t know whether it’s the beginning or the ending.
Because if it is the beginning, then you will make more money than you could ever imagine.
The returns that the market didn’t give in 10 to 20 years will come now.
If it is the end of the bubble, then whatever you think you will earn or gain — this investment can come down to a 50% to 80% loss.
Its beginning will happen in the US itself, and the impact will be seen in every market.
The Indian market will also not be spared.
Everything is interlinked — how?
This is what I am going to show you.
I have already shown you NASDAQ; it has given a 20% return in 1 year.
Oracle Stock and the AI Investment Loop
But now look at this stock; its name is ORACLE Corp.
In the month of July, it was trading around 240 to 250 US dollars.
Suddenly, one day comes — the date is 10 September.
The stock that was 240 US dollars is seen trading the next day around 340 US dollars.
In a single day, the stock increases by approximately 40%.
Since 1892 till today, such growth has not been seen in any stock.
The valuation of this company increases by 244 billion dollars in a single day.
To understand this, you need to understand this loop, which everyone on the internet is talking about.
You have to look at this image very carefully.
Now from this loop, let’s understand how this stock increased by more than 36% in a single day.
Overvaluation: The First Factor Behind the AI Bubble
First of all, Oracle announced that OpenAI, whose ChatGPT you must be using, has given them a commitment that it is going to invest 300 billion dollars in their cloud computing.
Let me tell you all that OpenAI does not make even a single rupee of profit.
It is expanding very rapidly, but it is a loss-making company, and its revenue is also not that great.
The revenue is also only 13 billion dollars, so from where will they invest 300 billion dollars?
On 13 billion, their valuation is running at 500 billion dollars.
Now the valuation is 500 billion dollars, the revenue is only 13 billion dollars, and the profit is 0 — it is a loss-making company.
So from where will they give 300 billion?
The loop is telling us that at this time we are sitting inside a bubble.
So as soon as OpenAI made the commitment that it would give 300 billion dollars, the stock suddenly jumped.
Now whether someone took a trade in futures options in the stock, or took a long position, or bought a call option — nobody knows what insider activity happened, but because of this, someone definitely made money.
But for sure, it was not the retail public — you and I did not make money.
How would we know that a stock would rise 36% in a single day?
Someone must have known this; some insider must have known.
Now Oracle says that for its cloud computing, it will need GPUs, and it will buy the GPUs from NVIDIA.
They say that they will spend billions of dollars on NVIDIA to buy chips and GPUs.
Here, first of all, Oracle was asked who will give the money.
OpenAI gave money to Oracle, and Oracle is saying that it will give money to NVIDIA.
Image number 8
NVIDIA is saying that it is making an investment of 100 billion dollars in OpenAI, so you understand the loop.
Oracle only received a commitment that 300 billion will come, and in that time the stock went up by 36%.
Who will give the money? OpenAI.
And who will give money to OpenAI? NVIDIA.
So the work is happening among themselves only.
By working among themselves, the revenue increases.
The first factor of a bubble is overvaluation.
You have now understood this overvaluation — that a valuation of up to 500 billion is being placed on 13 billion.
And every company is ready to invest money in the name of AI, just like what happened in the DOT-COM bubble.
In the DOT-COM bubble, there was a company called pets.com — its IPO came, and after the IPO, a crash happened.
Just like now Lenskart’s IPO is coming, and Paytm’s IPO had come.
You people invest money in IPOs, and similarly, in the US, people also invest money in IPOs.
If massive money is invested in an IPO and the market crashes, then all your money will sink.
This happened earlier as well, and it is happening now too.
Until now, we have discussed only the first factor — overvaluation.
Here you can see that the revenue is only 13 billion, and a valuation of 500 billion dollars is being placed on it — if this is not a bubble, then what is it?
This valuation is based on the assumption that the world will keep using only AI.
Now I will show you some solid data, based on overvaluation — on the basis of overvaluation.
This valuation is being placed on the basis that it is being said that 850 million to 1 billion people are using AI.
That’s absolutely fine — so how many times more people are going to use AI?
The total number of people in the world is 8 billion, in which even small children are included, and old women are also included, and the uncle living in your neighborhood is also included — everyone is included.
So ultimately, the people who have to use AI, according to me, those people are already using it.
This number (850 million) can double from here.
But you will stop at a certain limit.
You are spending money on valuation only because you feel that this number will keep increasing.
For that, the world’s population would have to increase.
So here, these are overhyped numbers.
Now we move to the second point. This point is important, and people are missing it.
The Magnificent Seven: Key Drivers of the Bubble
If a crash begins, it will start from the US.
And if it starts from the US, then there are only 7 companies that are going to trigger this bubble.
These 7 companies are called the Magnificent Seven.
Now who these 7 companies are, you all already know — NVIDIA, Apple, Microsoft, Amazon, Alphabet, Meta, and Tesla.
You know all of them.
What is the amazing thing?
When we talk about index investing, like investing in the Nifty 50, it means your investment is going into 50 companies.
Similarly, people in the US invest in the S&P 500 — meaning your investment is going into 500 companies.
But among those 500 companies, only 7 companies are such that if you invest 100 rupees, 37 rupees are invested in just these 7 companies.
If inside any index, 37% belongs to just 7 companies, and if anything happens to these 7 companies or they crash, then your money will sink.
You are saying, “What do we have to do with the S&P 500?”
If a crash comes in the US, then a crash will come in the whole world.
People sitting in India are also investing money in international equity, and this is a very big thing.
If you are also investing money, then your money is at risk.
From here you have understood that the Magnificent Seven are a problem for us.
This is our second point — from here the crash can be triggered, and the bubble can pop.
AI mania
Now I move to the third point. I am trying to explain to you that an AI mania is going on here — a madness for AI is happening.
If we look at it company by company, first we go to Tesla.
How much money is Tesla going to spend on AI?
Tesla has said that it will spend approximately 10 billion dollars in 2025.
And how much is Tesla’s profit?
Its income is 15 billion, and out of 15 billion, it will spend 10 billion only on AI.
Similarly, Alphabet — meaning Google — is going to spend 24 billion only on AI.
Its income is 100 billion, and it is spending 0.25 of its income.
Meta is spending approximately 70 billion on AI, and its profit is 62 billion.
More than the profit is being spent on AI.
Microsoft is spending 80 billion on AI, and its profit is around 100 billion.
Amazon is spending 125 billion only on AI and power cloud computing.
Such a huge expenditure has never happened in the entire history.
Now Mark Zuckerberg says here…
He says that even if we are spending this money and even if this money is lost, it is still worth it because if we do not spend, we will fall behind in a race.
So an AI mania race is going on — madness is happening.
Who will lead in AI?
On one side, the US is competing, and on the other side, China is competing.
Who will dominate AI?
Apple has made a commitment that in 4 years, it will invest 500 billion dollars in US initiatives.
That meeting happened, right, with Donald Trump.
All the CEOs were sitting — Sundar Pichai was also there, Tim Cook and Mark Zuckerberg were also there.
So there, Donald Trump clearly asked, how much money will you invest in US initiatives?
Have you seen Modi ji asking like this, how many jobs will you create?
Sitting together, Adani and Ambani — how many jobs will you create, how much money will you spend inside India?
Donald Trump is working entirely for Americans,
so out of 500 billion, the major money is going to be invested in AI by Apple.
This is so much money — let’s assume these 7 companies together will spend 1 trillion in the next few years.
1 trillion dollars will go into AI, but how the money will come back, nobody knows.
Nobody is thinking about profits.
Everybody is thinking about valuation, valuation, valuation…
And it is because of this valuation chase that NVIDIA’s stock is going so high.
NVIDIA does not make chips — the chips are made by a company in Taiwan.
NVIDIA only designs them.
It’s just a valuation game going on.
NVIDIA’s PE ratio is running at 57,
so you are paying 57 times more money than its earnings to buy the stock.
These 7 companies will invest 1 trillion dollars in AI.
Now, when so much money is invested, when the bubble bursts, where will this 1 trillion go? It will be gone — all the money will disappear.
There is a bubble — how is it being proven?
Overvaluation, fake revenue is being shown, and such a large share has been placed inside the index that its valuation is popping up.
These numbers are also inflated, manipulated.
Ask AI, and you will understand everything.
Elon Musk has used all these things in his favor, just to inflate the numbers.
Finally, if this is a bubble, then only one question matters:
Is the bubble starting today or ending today?
We don’t know.
So if it’s just beginning, then there’s only one way to make money from it.
I will explain this method in my next one-short article.
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