Every capex bubble in US history popped — but almost none popped on schedule.
Railroads, electrification, dot-com. All overbuilt. All burst. The pattern: booms tend to break once cumulative spend on the new technology reaches roughly 25% of GDP. Railroads hit it before the 1873 panic. Internet infrastructure hit it before 2000.
Today that line sits near $7.5 trillion. AI is well short of it. At the current pace it doesn't get there until the early 2030s.
The spending is also starting to pay. Last quarter $NVDA guided to 70% revenue growth for fiscal 2028 and Alphabet Cloud grew 82%. Booms keep running while capex turns into profit.
The bubble is real. History says it ends badly.
It just rarely ends at the quarter pole, and that's where AI is.
Railroads, electrification, dot-com. All overbuilt. All burst. The pattern: booms tend to break once cumulative spend on the new technology reaches roughly 25% of GDP. Railroads hit it before the 1873 panic. Internet infrastructure hit it before 2000.
Today that line sits near $7.5 trillion. AI is well short of it. At the current pace it doesn't get there until the early 2030s.
The spending is also starting to pay. Last quarter $NVDA guided to 70% revenue growth for fiscal 2028 and Alphabet Cloud grew 82%. Booms keep running while capex turns into profit.
The bubble is real. History says it ends badly.
It just rarely ends at the quarter pole, and that's where AI is.