The Wheels Are Falling Off The AI Bandwagon

**John Johnston** (0:00)
Hi, everyone, JJ here. Welcome back. Well, are the wheels coming off the AI bandwagon? And it is a bandwagon, of course, with so many people jumping into AI, really following the momentum. We'll have a look at that. But this is the video that I want to point to today. This was an over an hour long interview with four people, and they really discussed it. If you've been watching my pod, you'll know some of these people already. So the title AI, the wheels are coming off, and it's from Market Talk with George Noble, who has been short a number of these names, especially Tesla and SpaceX. Not sure how many others at the moment, but this is a conversation between Julien Garran, Ed Zitron and Nobody Special. Nobody Special is this guy who has his own podcast. He's been following this all the time, a few times a week. It looks like day by day there. I wasn't aware of this guy until this interview actually, or I was on X, we're seeing the odd thing, but George Noble's point that this guy is saying some of the things. So they're breaking down the thesis here, and of course, Ed Zitron better offline. I've featured him a lot on here. When I talk about the bandwagon, now I said on my members video in the weekend, I pointed to a few things here. I was talking about AI shorts, and I was saying it was so tempting at this point, when it's so obviously a bubble to me anyway. But Richard also in the replies said to me, he pointed to Patrick Boyle, a video he made about how dangerous it is to short things even in bubbles, and this is not investment advice, and I probably won't do it, but it is tempting.
Now, the news came out that Michael Burry was shorting Micron Technology.
So these three stocks here or this one, Micron Technology, you can see the parabolic move there, and Michael Burry, or famed short seller as well from the big short, and he says, Parabolas don't resolve sideways. So it's just a question of how high this goes, and this is another one. So the index, this is the Sox, the Sox on the NASDAQ, which is a semiconductor ETF, for instance.
It follows that index, and look at the move. It's had a parabolic move. Michael Burry short this as well. And of course, NVIDIA, the big one, the main hinge in the AI, so-called AI revolution. Well, these guys are actually arguing that it's OpenAI, that is the load-bearing company. But Michael Burry shorting, and George Noble shorting as well. So let's just hear a little bit of this intro, and you'll get an idea of what it's from. I don't want to make this video too long, and I'll put a link to this in the description if you want to go and see all of it. I've watched this twice, so there's a lot in here and it really breaks it down between these four guys, what they think is happening to make the AI boom break down, or the wheels coming off, or what's actually wrong and it's to do with financial engineering.

**Ed Zitron** (3:06)
None of this becomes about the actual numbers. It becomes around how you can mess with the numbers, how you can trick people but also it's not really tricking them when they're so willing to be tricked. If it's just we will print whatever you say, it's just a marketing channel. The media became a marketing channel. When this explodes, I guarantee you there are going to be stories saying, how did we not see this coming? How did we not see this coming? The answer is, people wanted the companies to win. So the companies have no incentive to make good stuff. They just have incentives to make more stuff and to constantly pump out new stuff and constantly do things that will help spike the stock value, which is why we had the fake AMD deal, the fake Broadcom deal, the fake Nvidia deal with OpenAI last year. So it's blatantly obvious if you bothered to look.

**SPEAKER_3** (3:55)
They might even say nobody saw this coming. Welcome, everyone.

**John Johnston** (4:00)
Well, see, it's definitely looking a little bit tired there. It's in great demand these days on Furious Podcasts. It's been on CNBC. He's been on Bloomberg. People are starting to listen to what he's saying, warning about this AI bubble. And all of these guys are. And yes, people did see it coming. And this is what I want to document here. I do think it's a bubble too. And this is just not investment advice whatsoever about what to do, especially shorting. Shorting is so dangerous, even though it might be tempting. You just don't know how high it's going to go up. It could go up high. Or is it rolling over? These guys tend to think there are definitely warning signs there.