AI Bubble Alert: The Rubber Hits The Road In 2027

Bret Jensen Investing Group Leader Follow Summary The huge surge in capex budgets at the hyperscalers has, to a large part, been driven by what was termed 'vendor financing' back during the Internet boom. As but one example, Oracle has locked in a massive $300B, five-year agreement with OpenAI, driving a surge in capex and debt. Debt has also boomed at the hyperscalers, particularly in off-balance-sheet obligations, which have surged past the $3 trillion mark. And this buildout is largely dependent on money-losing OpenAI being able to meet its huge commitments starting in 2027. Looking for a helping hand in the market? Members of The Biotech Forum get exclusive ideas and guidance to navigate any climate. Learn More » wildpixel/iStock via Getty Images There was an interesting article on ZeroHedge this week. The author compared a key aspect of the subprime crisis that helped trigger the Great Financial Crisis with the surge of what was called ‘ vendor financing ’ during the Internet This article was written by Bret Jensen 58.58K Followers Follow Bret Jensen has been investing since the 1980s. He has been writing for Real Money Pro and Seeking Alpha since 2010. Bret specializes in high beta sectors with potentially large investor returns.Bret leads the investing group The Biotech Forum, in which he and his team offer a model portfolio with their favorite 12-20 high upside biotech stocks, live chat to discuss trade ideas, and weekly research and option trades. The group also provides market commentary, and a portfolio update every weekend. Learn More. Analyst’s Disclosure: I/we have a beneficial long position in the shares of NRGV, EROC, MWH either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.