Carlota Perez × Jim Chanos: How Will the AI Bubble Burst—and Who Will Ultimately Pay? | AI-Generated Dialogue

Yiming Li (0:00)

I want to ask you a question that might sound completely backwards at first.

SPEAKER_2 (0:04)

Okay, lay it on me.

Yiming Li (0:05)

So think about artificial intelligence. By almost every measure, it is the most important technological development of our generation, right?

SPEAKER_2 (0:14)

Oh, absolutely, without a doubt.

Yiming Li (0:16)

And the physical infrastructure being built right now to support it, the data centers, the chips, it's fundamentally reshaping the global economy.

SPEAKER_2 (0:25)

Right, it's massive.

Yiming Li (0:26)

So here is the question. If artificial intelligence is truly this revolutionary, why might investing in the very companies building its physical infrastructure be like a terrible wealth destroying financial decision?

SPEAKER_2 (0:41)

Man, that is, it is the ultimate paradox of technological progress. Right. Because we intuitively assume that, hey, if something is going to change the world, the people pouring the concrete, laying the cables and manufacturing the servers, they're the ones who are going to get rich.

Yiming Li (0:55)

It just make logical sense.

SPEAKER_2 (0:57)

It does. But if you look at the historical record, and more importantly, if you look at the underlying mechanics of corporate balance sheets during these big infrastructure buildouts, they tell a violently different story.

Yiming Li (1:10)

Yeah. To be clear to you listening, we are not here to debate whether AI is real or just a passing fad. The technology is very real.

SPEAKER_2 (1:19)

Very real.

Yiming Li (1:19)

But we are tackling this incredibly high spakes puzzle today for this deep dive. If the information revolution is about to enter its golden deployment period, but the current assets and the companies building the AI infrastructure might not even survive long enough to see it.

SPEAKER_2 (1:36)

Which is a very real possibility.

Yiming Li (1:38)

Exactly. How do you, the everyday investor, avoid missing a future without becoming the one who ultimately pays for it?

SPEAKER_2 (1:44)

So to solve that puzzle, we really have to connect a few different disciplines that people usually keep completely separate.

Yiming Li (1:50)

Okay. Let's unpack this. What do we need to look at?

SPEAKER_2 (1:52)

Well, we have to look at macroeconomic, technological cycles, the nature of capital bubbles, how value is actually captured in a supply chain, and this is the big one, the granular, often deceptive accounting that happens along the way.

Yiming Li (2:05)

So merging the historical with the forensic basically.

SPEAKER_2 (2:08)

Exactly. Because the creation of societal value and the creation of shareholder value, they run on two completely different and often opposing timelines.

Yiming Li (2:17)

That is such an important distinction. Let's start with the frameworks we're using to view this, because we're looking at a huge stack of historical texts, SEC testimonies, hedge fund presentations.

SPEAKER_2 (2:29)

Yeah, it's a mountain of data.

Yiming Li (2:31)

We are essentially looking at the exact same market data through two vastly different lenses. We have the macroeconomic view of Carlota Perez and the forensic microeconomic view of Jim Chanos.

SPEAKER_2 (2:43)

Two absolute heavyweights.

Yiming Li (2:44)

Neither of these people built their worldviews in like an ivory tower?

SPEAKER_2 (2:48)

No, not at all.

Yiming Li (2:49)

Let's look at Perez first. She didn't start out as an academic theorist just writing about Silicon Valley from afar.

SPEAKER_2 (2:54)

No, her framework was forged in a very specific, high stakes environment.

Perez is a British Venezuelan researcher. And to understand how she views technology, you really have to look at what she was doing in the early 1980s.

Yiming Li (3:08)

Right in Venezuela.

SPEAKER_2 (3:09)

Exactly. She was the founding director of technological development at Venezuela's Ministry of Industry. Wow. And she was actively dealing with international technology transfer and the real world fallout of the 1973 OPEC crisis.

Yiming Li (3:23)

Which would have been massive for Venezuela. Given their heavy reliance on oil exports.

SPEAKER_2 (3:27)

Oh, it completely upended their economy. The whole global system was transitioning from a mass production era, which was based on cheap oil, to an information era based on cheap microelectronics.

Yiming Li (3:39)

Well, she's right in the middle of this massive shift.

SPEAKER_2 (3:42)

She was on the front lines literally trying to figure out how a developing nation actually integrates new technology and capital just to survive. I mean, she even helped establish Venezuela's first government-supported venture capital fund.

Yiming Li (3:53)

That's wild. So her perspective isn't about picking winning stocks or predicting whether one specific piece of software beats another.

SPEAKER_2 (4:02)

Not at all.

Yiming Li (4:03)

She's looking at the systemic mechanics, like how does an entire society absorb a new technology?

SPEAKER_2 (4:09)

That become her life's work. She later collaborated with the innovation economist, Christopher Freeman over at the Science and Technology Policy Research Unit at the University of Sussex.