AI Bubble Burst: Token Prices Collapse, And Yields Soar

The LLM Token Expenditures Index has collapsed by almost 60% in Q2, and this might force a stall or cut in AI capex as profit margins for hyperscalers shrink.

Global yields are soaring, which means a higher cost of capital for hyperscalers, and possibly higher credit risk.

The AI bubble burst is likely already in progress, and it will likely accelerate in Q3 and Q4.

The AI bubble burst is in progress - here is the chart of VanEck Semiconductor ETF (SMH), it looks like a classic melt-up, peak, and the bust.

Semiconductor stocks are the primary beneficiaries