Mark Cuban on the AI Bubble: Who Actually Gets Wiped Out?

**SPEAKER_1** (0:00)
You and I lived through a couple of bubbles. We've seen this movie before. And this wave seems very different than the.com wave. So let's talk about that. Are you concerned about a bubble? We're seeing bubbly like behavior people.

**Mark Cuban** (0:13)
It's not it's not the traditional.com bubble, right? Because back then there were companies going public, getting crazy valuations and people are buying them. And the stock would go up, you know, 50 percent, 100 percent with companies that had no revenue, no traffic, no nothing. And you'd go get a cab back then and people would be talking about them.

**SPEAKER_1** (0:30)
Yeah.

**Mark Cuban** (0:30)
And you don't you don't see that at all today. So it's not a bubble that's going to impact most people in the room, right? Or most people across the US. But it could just destroy a lot of VCs and a lot of funds and a lot of PE., right? Because they're going all in.

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**Mark Cuban** (1:25)
It used to be that product managers for brokerages had to outperform their numbers, right? For, you know, the SPX or whatever. But now you got to outperform to keep the money coming in. You got to outperform the fun next door. And they're all in Anthropic and getting their outcomes in SpaceX and celebrating. But if shit hits the fan.

**SPEAKER_1** (1:45)
Yeah, it really is. Like, I've only done venture for just over 10 years. And it is wild to watch so many people who deployed at the wrong time just out of business. They just invested at the peak. And entry price matters.
And you and I have been in a bunch of deals together. And we used to get to investing companies at five million, 10 million as angel investors. And then all of a sudden, the request was 40, 50, 60, and the product's not launched.

**Mark Cuban** (2:12)
And you're like, how does this work? Yeah.
And what's happening now is the market leaders, Google, et cetera, Metta, they're borrowing hundreds of millions of dollars.

**SPEAKER_1** (2:22)
Yeah, that's interesting.

**Mark Cuban** (2:23)
And there's already a private credit problem right now.
So you just layer on private credit, like Owl Capital getting all the refunds. And then you have these huge companies that have cashflow, but they're spending all their cashflow on CapEx and then they're borrowing on top of that. 50-year bonds. Right. That's planning for perfection.

**SPEAKER_1** (2:45)
Right.

**Mark Cuban** (2:46)
And that's going to be hard. And we're building these data centers. And if there's a price performance curve on AI that minimizes the power requirements, there's going to be a lot of data centers that are going to be turned into pickleball courts.

**SPEAKER_1** (2:59)
Interesting, because they just can't get the power turned on.

**Mark Cuban** (3:02)
And then just the power, it's just everybody thinks that, okay, there's going to be so much more utilization. And there will be, right? It'll just scale like everybody expects. But there's going to be breakthroughs and technological breakthroughs as well. Just like we saw fiber back in the day, it was all about putting in fiber. Then it went from one gigabyte fiber to 10 to 100 gigabyte. And then there wasn't a fiber problem anymore. There wasn't a bandwidth problem anymore.

**SPEAKER_1** (3:23)
Quite the opposite. We had dark fiber that people bought for pennies on the dollar.

**Mark Cuban** (3:28)
And just sitting there, right? And then how is it not going to be the case that we don't get the same price performance improvements on the AI side and on the data center side?

**SPEAKER_1** (3:37)
Yeah.

**Mark Cuban** (3:37)
And then with all the hate going against data centers, I think that could be protecting them. And I mean, spending, committing tens of billions of dollars for 10, 20 years going out.

**SPEAKER_1** (3:50)
Yeah.

**Mark Cuban** (3:51)
I mean, nobody can predict that well.

**SPEAKER_1** (3:55)
I mean, you used the word pricing to perfection, I think, earlier in the conversation. That's really what's happening. I mean, you have to have a thesis that we're going to put 100 OpenAI, $100 billion to work.