Arthur Hayes, co-founder of BitMEX, said at the Gamma Prime investment conference in Singapore on Oct. 7 that humanity is "wasting trillions of dollars" on AI data center construction and that the current AI boom could end in overinvestment, a crash and a bailout.
Hayes said the excess liquidity released by such a bailout could help push Bitcoin and other crypto assets higher.
Hayes sees a risk of overbuilt AI infrastructure
According to Hayes, tech companies are racing to build data centers and lock in compute capacity, a process that could eventually create excess supply and make computing power "extremely cheap and abundant."
He said, "If you study financial history and every major technology rollout, you find they are always overbuilt, there is always a crash, and there is always a bailout."
Hayes cited the 2008 financial crisis and other events over the past two decades, saying investors who position early for bailout policies may benefit, though they need patience.
The pressure point may arrive in late 2027 or 2028
Hayes said compute buyers such as SpaceX, OpenAI and Anthropic are not yet profitable. Once the data centers now under construction are completed, infrastructure providers will ask those customers to pay for the compute capacity they previously agreed to buy.
He said that test could come in late 2027 or 2028, when a large amount of new data center capacity is delivered.
Hayes also described another bullish scenario: AI could become useful enough over the next 12 months to drive demand growth and allow AI companies to turn profitable.
He does not favor shorting AI companies
At the same time, Hayes acknowledged that memory chip makers and AI suppliers such as Nvidia are already profitable. He said investors need to decide whether the valuation multiples attached to their forward earnings are reasonable.
He added that he does not like betting on falling prices or shorting AI companies, calling it "not a particularly good investment opportunity."
Flop is planned for Q1 2027
Hayes said the idea of cheap and abundant compute also underpins his new project, Flop. The AI agent payments project is expected to launch in the first quarter of 2027 and plans to build a spot market for compute, using the Flop token to reward participants that provide GPUs and run AI inference.
Explaining the thesis, Hayes said: "If agents can directly exchange a currency for the compute they consume, they will use that currency. That is our bet."