Arthur Hayes: The Burst of the AI Bubble Will Trigger Super Printing, Driving Bitcoin Back to a Bull Market

On August 5, Arthur Hayes published his latest article "Situationship," suggesting that the AI bubble may eventually burst, but its subsequent impact could drive global liquidity expansion and serve as a catalyst for the next bull market in Bitcoin.

Hayes believes that the key to determining whether AI is a bubble lies in how investors define AI infrastructure development. He points out that the market generally views the trillions of dollars in AI capital expenditures as "technology investments" and assigns high growth valuations, but their essence is closer to "real estate investments."

He states that the current AI infrastructure development is essentially about building data centers, power facilities, and other underlying assets that support computing power, rather than directly investing in technology companies like Apple. "Financial institutions, private credit funds, and governments may mistakenly believe that investing in AI data centers is equivalent to investing in tech giants, when in fact it is more akin to investing in highly leveraged infrastructure projects."

Hayes argues that the core reason for the burst of the AI bubble is not that corporate profits cannot be realized, but rather excessive credit expansion. He notes that with the support of the U.S. and Chinese governments, financial intermediaries may overbuild data centers, power facilities, and related supply chains, ultimately creating credit cycle risks similar to those of the 2008 financial crisis, rather than a profit valuation crisis like that of the 2000 internet bubble.

However, Hayes believes that the long-term value of AI remains immense. He points out that the computing resources operating within data centers will drive the development of "silicon-based life," having a profound impact on human civilization similar to that of the railway era.

Regarding market impact, Hayes predicts that after the AI bubble bursts, governments and central banks may adopt more aggressive monetary easing measures, using "massive printing" to repair the financial system, pushing risk assets back into an upward cycle, ultimately benefiting Bitcoin.

Hayes states that the core variable of the current AI cycle is whether the capital markets have mispriced AI infrastructure, and this judgment will determine the future direction of the market.