Jeffrey Funk Explains Why The AI Bubble is Crashing and The Shady Circular Financing

It is becoming more evident that we are living through an OpenAI bubble following the release of ChatGPT in late 2022! Jeff compares this unprecedented AI surge with past bubbles, explaining why standard bubble metrics used by the usual experts and analysts have completely missed the mark.

Jeff argues that AI is a bubble, but not in the same way as the dot-com or the 1929 bubble, because the structure is centred on a few firms rather than a broad market. Traditional bubble metrics like price-to-earnings ratios are misleading, as most companies in the market are not actually benefiting from AI!

Jeff also looks at the warning signs in hyperscaler cash flow, semiconductor suppliers, and the Korean market, which experienced a historic stock market crash in late July 2026, with the benchmark KOSPI index plunging over 33% during the month.

We delved into the broader damage caused by this bubble that distorted startup incentives, media and VC hype cycles, and what could happen when the bubble finally breaks.

We shared examples from AI labs, media sponsorships, and the growing disconnect between business logic and the way AI is sold to investors. And we discuss how AI hype has shifted from useful niche applications to grand claims about AGI, singularity, and curing everything from cancer to layoffs.

Join the conversation and let’s discuss how the AI bubble may be approaching a breaking point, including OpenAI’s centrality, hyperscaler cash flow strain, and weakening confidence in major AI-linked stocks. My concern is that it could also bring the end of entrepreneurship as we know it! Hold on to your seats, folks.